New Melbourne incubator the York Butter Factory is to open its doors on October 17, with the venture capital firm behind the initiative on the verge of finalising a multi-million dollar fund that it will use to back start-ups.
As revealed by StartupSmart earlier this month, the incubator, situated at the foot of the Rialto Tower in Melbourne’s CBD, aims to foster early-stage tech start-ups.
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The York Butter Factory says it will launch on October 17 with about 30 budding entrepreneurs taking up residence.
The premises, which provide a desk, internet connection and meeting rooms for $600 a month, will eventually expand to hold around 60 people.
A seed fund for start-up tenants is set to roll out next year, providing ventures with funding in the $25,000-$50,000 range.
But start-ups could be set for an even bigger payday, with Adventure Capital, the VC firm behind the York Butter Factory and industry networking group Aurelius Digital set to seal a major new fund.
Stuart Richardson, founder and managing partner of Adventure Capital, says that the capital raise, which began late last year, will hopefully provide $20 million to $40 million for promising new ventures.
“The fund has already made six investments and we have nearly closed it,” he says.
“It’s a very tough capital market at the moment, so we’ve had to source high net worth individuals.
“I hope it will all be finished by the end of November. It will be an early stage fund rather than a seed fund. I’d expect between 10 and 20 start-ups to be involved with the fund.”
He says he will be looking for businesses with traction, funding in the $500,000 to $5 million range, which he says is a bit of a “death valley” for new businesses.
“At the smaller end you’ve got Startmate and Pollenizer and then you have the likes of Starfish who have to move large amounts of capital in order to move the needle,” he says.
Richardson says he will look close to home, within the York Butter Factory, for start-ups that require the funding, but that the investment would be available to any suitable business regardless of location.
Along with budding start-ups the York Butter Factory will play host to a range of specialists such as SEO experts and graphic designers, who will be able to collaborate with the businesses on projects.
The incubator is exploring links with similar facilities around the world, with Richardson saying that he has been in talks with the founders of Startup House, a co-habiting entrepreneurship building in Silicon Valley, about a partnership deal.
The York Butter Factor will also host the Startup Weekend event on November 4 to 6. The scheme involves groups of budding entrepreneurs compete against each other in order to create a business within 48 hours.