Startmate doubles investment to $50,000 for 2013 program
Thursday, October 4, 2012/
Incubator program Startmate will return with a vengeance in 2013, doubling its investment to $50,000 per start-up and extending the program to five months, two of which will be spent in Silicon Valley.
Led by Niki Scevak, Startmate offers mentoring and seed funding to the founders of internet and software businesses based in Australia.
The next Startmate program kicks off in Sydney in January. Applications are now open and will close on November 18.
This year’s program attracted more than 160 applicants, of which eight were selected, so the competition is fierce.
Following the success of this year’s program, Startmate is doubling the investment to $50,000 per start-up but will keep the equity component the same at 7.5%.
In addition, the program is now five months long. Participants will spend three of those months in Sydney and two in Silicon Valley.
At the end of the program there will be two demo days – one in Sydney and one in Silicon Valley – on which the participants will present their businesses to early stage investors.
According to Startmate, it made sense to increase the time spent in Silicon Valley from one month to two months.
“Roughly half the capital of those Startmate start-ups that raised money this year came from US investors like Peter Thiel, Dave McClure, and the founders of Guitar Hero and Postini,” it wrote in a blog.
“Two months gives you a better unit of time to close investment, and also a better sense for what Silicon Valley is and is not.”
According to Scevak, the decision to double the investment was made in line with the decision to extend the program.
“We’re offering a bit more money to cover their costs, but [it’s] also the conviction and the confidence there are really great companies in Australia being started up.”
In March this year, Scevak confirmed the 2012 batch of Startmate start-ups was incorporated in the US state of Delaware rather than in Australia.
Scevak told StartupSmart it is quicker and easier to incorporate companies in the US, which is home to a different payments structure and a range of start-up-friendly Silicon Valley banks.
He said all eight of this year’s Startmate start-ups opted to be registered in America, suggesting the 2013 batch could do the same.
This month, Startmate will be running a series of Q&A events in Sydney and Melbourne, giving start-ups an opportunity to determine whether the program is the right fit for them.
“We will also be organising office hours with founders of previous Startmate companies so that you can have a one-on-one with them and get the real unvarnished view of what Startmate is like,” it said.
It’s worth noting Startmate is a big believer in lean start-up principles.
“The biggest risk in a start-up is not whether someone will steal your idea or if you can build a product but rather that no one will care,” it said.
“Startmate is designed to help you win your first customers and work through the initial stages of customer delivery.”
For the 2013 program, Scevak says Startmate will be looking for start-ups that demonstrate “inherently global opportunities”.
“Once you launch, you should be able to attract customers from all over the world without having to open an office [in another country],” he says.