Technology and start-up development group Kingston Equities is this week launching a fundraising strategy to raise $2.2 million in venture capital to support the acquisition of a range of business to business companies in the coming year.
Founder and executive chairman Phillip Kingston told StartupSmart the company was seeking to partner with four to six start-ups for $50,000 to $350,000 as tech and investment cofounders.
“We definitely want to keep the teams involved. This is not an exit for them, this would be growth,” Kingston says. “We bring three things, capital, knowledge networks and distribution, so basically the companies can skip a whole bunch of steps in the business lifecycle, and get it from a couple of kids kicking around an idea with some revenue, to something that is a workable, scalable business.”
The Kingston Equities portfolio currently includes 12 companies, including Queensland-based website developer Fireworks and hyper-local casual employment platform On Tap Recruitment.
Kingston says his team will be looking to buy service-based companies that have the potential to spin out products that can be scalable.
“The model is to use these services companies to get marketing insights and build distribution so you can rapidly prototype and commercialise product,” Kingston says, adding their focus will be on marketing and internal business efficiency companies.
Start-ups will stand out if they have proof of customer behaviour, either in revenue or users.
“I’ll be looking for proof of customer behaviour. Once you can prove a customer is willing to do something you want them to do, that’s when you’ve got a business opportunity,” Kingston says, adding 5000 users on a free platform was as good a revenue as proof of potential. “We don’t care about profit because that’s something you can make later, but revenue is the best indicator of market share and customer behaviour.”
Kingston Equities will be partnering with one or two high net worth private investors to raise $2.2 million to supplement the cash they have on hand.