An Australian-run New York angel fund has invested the equivalent of $900,000 in three start-ups using an innovative model that exchanges equity for services and mentorship, rather than cash.
Kayweb Angels has picked out Cafrino, Minute Lister and You Need My Guy from a field of more than 200 applicants, around 50 of them from Australia, for the investment.
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As reported by StartupSmart in May, Kayweb Angels was created to offer start-ups technical development help and mentorship as a co-founder, in return for equity.
The three latest start-ups, all based in the US, have been added to Kayweb Angel’s existing tech investments – whoisgreen.com, Burringo and Do It In Person.
Cafrino is a casino gaming provider, Minute Lister is a mobile app that makes eCommerce easier and You Need My Guy is a business networking tool.
The winners were chosen from a reduced field of about 30 who pitched to a panel of Kayweb investors in New York. The businesses have given up between 30 and 40% equity each in return for Kayweb’s help.
Haig Kayserian, an Australian who is Kayweb’s CEO, tells StartupSmart that he was impressed by the overall quality of the Australian applications.
I did get calls from a few Australian businesses about the criteria and they were asking all of the right questions,” he says. “They were all decent businesses and they were on a par with those from elsewhere in the world.”
“The problem with some of them was that they lacked market research. Some in the consumer space hadn’t considered their strategy for the US. They’d developed a site for Australia and had no idea how to expand it beyond that relatively small market.”
“None of them declared a keenness to move to the US and none really made clear how they would staff their business in the US. That’s where they fell down.”
“The start-ups that we chose had passion about their ideas and could back it up with market analysis and data. Their ideas were solving a problem and they’d clearly identified and tested a market. They ticked those key elements.”
Kayserian adds that he’s seen a noticeable uptick in Australia’s tech start-up scene over the past year.
“I think that has started a trend where Australian businesses realise that there’s something better out there for them. I’ve noticed that there’s an overall maturity in the market now.”
The next round of Kayweb Angel investments will take place in November. Start-ups keen on applying to the scheme can click here. http://www.kaywebangels.com/