Havas, the fifth largest advertising agency in the world, has launched a Series A venture capital fund in Australia to help high-growth ventures continue to excel after a first round of funding.
Havas Ventures founder and executive director Eddie Wilson says the fund will be targeting a range of businesses across health, agritech, retail and fintech.
“We don’t use the word startups,” Wilson tells StartupSmart.
“We’re open to all industries and all technologies.”
The program will focus on four key areas: strategic consultancy, fully integrated marketing, direct investment and global network access.
It will offer businesses either direct investment, in-kind services, commercial partnerships or opportunities to work with Havas’ agencies.
Havas Ventures’ program was inspired by the mantra of business scholar Peter Drucker that “innovation and marketing” are the only two things that make money, Wilson says.
“There are cynicisms about corporate venture models and I shared that,” he says.
Because of this, Wilson says he has spent the past 12 months working on a model that has “substance” and is actively supported by the corporate giant’s leadership team including a “full buy-in” at CEO-level.
“We have to have direct VC-entrepreneurial experience leading the division,” he says.
“Ensure the model is predicated on ventures beyond the startup phase – we need to be working with people who have more than just good ideas.
“We’re creating a vehicle that can genuinely drive growth beyond passive capital with marketing capabilities and access to customers.”
Considering the 90% failure rate of new ventures, Wilson says that marketing is the missing element.
“I have a history in venture capital and entrepreneurialism,” he says.
“For me, it was all about finding a vehicle that could genuinely affect the growth of emerging businesses.”
To work with Havas Ventures, startups can submit an application online, which begins with two questions to determine if marketing will be a key driver of their success: “Does your venture have a working product and paying customers?” and “Is the primary aim to reach and acquire new customers?”
After answering this, applicants will be led to a “more prescriptive form”.
Wilson says startups may also contact him or Havas Ventures’ commercial partner directly.
“The sort of pre-launch appetite has been terrific,” he says.
“Most people in this area realise they’re essentially looking for capital and customers.”
For founders seeking investment, Wilson says that they’re at the “embryonic stages of a fund” so they won’t be making many just yet.
But he says that founders who speak to the following points in detail backed by empirical data will have a good baseline to negotiate on.
“Have a clear definition of the problem your business addresses,” Wilson says.
“Provide an in-depth understanding of your customer or target audience.
“Demonstrate the benefits of your products and specifically how agents and clients will benefit from using your technology.
“Provide clear business metrics like cost of customer acquisition and life-time value of customers.
“Demonstrate a distinct line of revenue and associated growth rates.”