Startmate, the mentor-driven seed fund, has opened up applications for its second funding round, expanding the program to seven start-up businesses.
The scheme, which invests $25,000 for a 7.5% stake in chosen tech start-ups, will run from January to April 2012, following its inaugural round earlier this year.
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The second incarnation of Startmate will feature seven participants, up from the five start-ups picked for the debut program.
Startmate will also have additional mentors, including Silicon Valley-based Ash Fontana and Ozan Onay, co-founders of TopGuest, a rewards system for travellers that has been backed by Peter Thiel, founder of PayPal.
Other new mentors include Larry Marshall, partner at Southern Cross Ventures, Bardia Housman, co-founder of Business Catalyst, Nick Holmes a Court, co-founder of Buzz Numbers and Steen Andersson, co-founder of 5th Finger.
Stuart Argue and Anthony Marcar, co-founders of Grabble, one of the five start-ups chosen by Startmate this year, will also act as mentors. Grabble has since relocated to the US.
Startmate works by choosing tech-based early-stage businesses to be mentored by the program’s 30-strong team, which also includes Mike Cannon-Brooks, co-founder of Atlassian, and Ryan Junee, co-founder of Inporia.
The mentors put in their own money to fund the early development of the start-ups, with participants also offered help with legal bills and office space.
A key part of the program, which is based in Sydney, is a trip to Silicon Valley, where the budding entrepreneurs are introduced to various investors.
The first Startmate program chose an eclectic mix of participants, including an iPhone games developer and a service that allows companies to share emails in a more intelligent way.
All of the five have managed to attract funding beyond the Startmate scheme.
Niki Scevak, co-founder of Startmate, says that he “underestimated” the level of interest among US investors for the program participants.
“The willingness of US investors to put money in Australian start-ups surprised me,” he says. “They were very interested in what was happening in Australia and there is already a great Australian start-up community in Silicon Valley, so we will be looking to build up the US component.”
“The success of Startmate is whether mentors are involved with start-ups after the program and then participants come back as mentors, as Grabble has done.”
“We want it to be a cycle of innovation as the value of these programs is the alumni. If you go to YCombinator in the US, the alumni will say that the network of other start-ups is more valuable to them than the mentors.”
Scevak adds: “We want ambitious people with sharp technical skills. They have to be able to do a lot with very little too. Those are the teams we are looking to back.”
Since the launch of Startmate last year, there has been a flurry of activity in Australia’s start-up incubator and seed fund market.
In the space of 12 months, programs such as PushStart, AngelCube and York Butter Factory have launched, with the TechStars Network model set to be applied by an Adelaide business.
However, Scevak says that he doesn’t see the explosion of incubator numbers as being a threat to Startmate.
“We don’t see them as competition – we think it’s a great thing that we need more of here,” he says.
“We want to increase the quality and make Startmate a premium brand. The mission isn’t to be the biggest, it’s to be the best.”
More information about Startmate can be found here.