A new US-based angel fund is to target innovative Australian tech start-ups later this year with an unusual proposition – exchanging equity for technical skills, rather than cash.
Kayweb Angels, which launched in New York, already has a stake in three US start-ups – whoisgreen.com, burringo.com and doitinperson.com.
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The fund works by taking equity in a start-up – typically between 15% and 40% – in return for technical engineering skills. The value of work provided to start-ups ranges between $150,000 and $300,000.
Kayweb Angels is the brainchild of Sydney-born entrepreneur Haig Kayserian, who is founder and CEO of Kayweb, a mobile and web applications development company. The business has offices in Australia, the US and the Philippines.
Kayserian has branched out to start Kayweb Angels with four other directors, including Foad Fadaghi, research director at Telsyte and formerly of Friendster, Shant Soghomonian, executive at VMware, Sidney Minassian, CEO of start-up consultancy GrowthQ and corporate lawyer John Buckman.
Speaking to StartupSmart, Kayserian says that Kayweb Angels will start holding pitch events for start-ups in Sydney and Melbourne by the end of the year.
“We hope to end up covering most cities, including the eastern seaboard, Adelaide and Perth,” he says. “We’ll hold a pitching process and then meet the applicants. We haven’t specifically marketed this to other states or Australia yet, but it’s not closed to Australian start-ups.”
“We just had a preference to launch in the US. We’re interested in Australian companies that want to have a global scope. If they are in phase one in Australia before expanding to the US or globally, that’s what we’re looking for.”
Kayserian says that he took a different twist to the standard business angel model after realising the need for technical skills among start-ups.
“I’ve loved working with start-ups as a developer but I recognised that in New York, and increasingly elsewhere too, that they are lacking in tech talent,” he says. “Start-ups are having to go to speed dating-style events to get tech talent. That was the light bulb moment for me.”
The founders of Kayweb Angels haven’t ploughed their own money into the venture, with the fund set to be supported financially and skills-wise by the existing Kayweb business.
Kayserian says that he will be hiring additional staff to accommodate the growth, adding that he’s aiming to have a stake in five start-ups by the end of the US summer before raising capital to grow this number to “up to 20 or 30” start-ups from next year.
As to the type of start-ups Kayserian is looking to partner with, he says: “We have a strong preference for consumer web and mobile. We have lots of expertise in the area of mass-appeal sites and apps. It’s an exciting area and it’s a big bonus if the start-up has a strong mobile focus. We don’t have an issue with areas such as gaming too.”