Newly launched accelerator Slingshot plans to invest in around 100 start-ups over the next five years, investing as much as $100,000 in each start-up via a $10 million venture fund.
Based in Newcastle, Slingshot is a high tech accelerator that provides seed funding, a co-working space and a 12-week mentoring program. It was launched yesterday by Greg Combet, Minister for Industry and Innovation.
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Slingshot is raising $10 million to invest in each start-up accepted into the accelerator program, as well as to participate in follow-on investments with angel investors and venture capital firms.
It is partnering with early-stage venture capital firm Artesian Capital Management, who launched the $10 million Sydney Angels Sidecar Fund in 2011.
The Slingshot Venture Fund plans to invest in approximately 100 start-ups over the next five years.
The investment strategy of the fund is to gain exposure to high-quality, capital-efficient, technology-focused startups that have been selected, screened and mentored by Slingshot.
The fund plans to make investments of up to $50,000 in all start-ups selected for the accelerator program and follow-on co-investments of approximately $200,000 in selected start-ups.
“We have followed the success of the early accelerator entrants in the US, particularly Y Combinator and TechStars, and have been inspired by the plethora of accelerators globally,” co-founder Chris Lambert told StartupSmart.
Lambert says it took about eight months to launch Slingshot after partnering with Trent Bagnall, the other co-founder.
“We have been to the US to look at exit strategies, secured a strong partner group, and have been able to bring in a recognised and experienced fund partner,” Lambert says.
Lambert and Bagnall were initially introduced to Artesian Capital Management by PricewaterhouseCoopers, which has come on board as their advisors.
“We knew of their credentials from the Sydney Angels Sidecar Fund,” Lambert says.
“[We] have found that we have the same vision regarding building a sustainable accelerator model and have found alignment across most of the key areas of our business.
“The cash component is only one element.
“With our partners’ help, we will be giving each business the necessary financial, legal, IT and marketing support from world recognised suppliers that is normally out of reach for a business that is still establishing itself.”
In addition to PwC, partners include Sparke Helmore Lawyers, Newcastle Herald and the Hunter Business Chamber, all of which are keen to support innovation in the region.
The University of Newcastle, Hunter TAFE and Newcastle Innovation are also supporting Slingshot as a pathway for graduates and alumni.
Slingshot will run a six-week application process, and is encouraging entrepreneurs to apply with their business ideas.
Up to 10 businesses will be given the opportunity to participate in the program. Slingshot plans to run two programs each year.
Slingshot co-founder Trent Bagnall says the successful applications will be housed in Slingshot’s offices for 12 weeks.
“[They will be] given access to leading business mentors and be run through a rigorous program,” he says.
“At its completion, companies [will be] ready to pitch themselves to venture capitalists for further funding either here or overseas.”
Creating a pathway to the United States, Asia and emerging markets is a key part of the Slingshot offering, says Lambert.
“There is a growing appetite for Australian ideas and people from international investors and corporations,” he says.
“There is a significant presence of Aussie tech entrepreneurs in overseas markets and Slingshot will assist start-ups to leverage this global network.”