A startup looking to help Aussie social ventures measure and report on the outcomes of their work has won $US100,000 in prize money ($128,000) at the Salesforce World Tour pitch comp in Sydney.
SocialSuite was founded three years ago by Damian Hajda and Dr. Clara Ong as a way for both not-for-profit businesses to better report on the effectiveness of their work, and for government, philanthropic, and corporate funders to receive better insights on how their investments are being used.
The platform offers an easy way for not-for-profits to enter and track their data, and the startup was one of three that pitched before a room of thousands of attendees and — most importantly — three venture capitalist judges at the Salesforce World Tour pitch comp in Sydney on Tuesday.
Reinventure partner Kara Frederick, Blackbird Ventures founder Niki Scevak, and investor and Shark Tank judge Steve Baxter judged the competition, which gave the founders five minutes to pitch their startup, and five minutes to take questions from the panel.
Speaking to StartupSmart after the competition, Ong and Hajda were very grateful for the win as the company is currently in the middle of a $1.5 million pre-series A round.
“We’re trying to raise a round at the moment, so it meant we were able to fire off numbers to the judges from the hip,” laughs Hajda.
“We have a few due diligence processes underway but we’re hoping this win and a bit of media coverage will get a few investors off their hands because no one wants to come in first when investing.”
The founders have previously closed $500,000 and $400,000 pre-seed and seed rounds, respectively, with the first round secured early on to help the startup build out its product.
“Officially Socialsuite is three years old but we’ve been doing in depth research with a prototype and understanding the need for the product for much longer before that,” says Ong.
“We spent a year and a half selling a product that didn’t exist and pretending it did to get the support of our initial clients,” says Hajda.
With a capital raise underway and two under the belt, Hajda advises entrepreneurs to take a bit longer with capital raises and raise more than you think you need, as raising smaller amounts can be a drain on resources if it drags on for too long.
A “boxing match” expected from Steve Baxter
While the start of Socialsuite’s pitch was “a bit choppy”, once the judges started asking questions the founders felt their nerves calm. The duo were grateful for the feedback from Reinventure’s Frederick, and were pleasantly surprised by the line of questioning from Baxter (who admitted he was not familiar with the not-for-profit space).
“I thought Steve might have gone a bit harder, we were expecting a bit of a boxing match,” Hajda says.
During the pitch, Hajda says he actually undersold the Australian not-for-profit market size, as he is admittedly not a fan of startup founders who pitch “$50 billion addressable market” potential. “We didn’t want to be one of those,” he says.
That being said, the founders acknowledge the Australian not-for-profit scene can sometimes be overlooked by investors and the wider business community, often failing to drum up the same excitement as other areas of the startup ecosystem.
However, Ong believes it’s all a matter of more people understanding how not-for-profits work.
“They operate very differently to other businesses in the sector and wider business space, and their sales cycles can be a bit longer. It’s about understanding the limitation to their sales cycle, and helping mitigate them,” she says.
“From an investor’s perspective, social spending makes up 20% of OECD countries’ GDP, so a lot of them don’t realise how much money is being shovelled around the industry,” Hadja says.
“But investors will either go, ‘I love it’, or ‘I don’t get it’, there’s no in-between; it’s a polarising investment.”
Beyond the win and their $1.5 million raise, the two founders are looking to encourage further investment and start to “aggressively scale” their marketplace, which Ong views as a winner-takes-all business space.
The startup is also running a blockchain trial with blockchain for social impact company ixo Foundation, which will see the Socialsuite platform paired up with a blockchain-based smart contracts platform. As Hajda explains, “we’re the yin to their yang”.
In advice to other entrepreneurs, a baffled Hajda questioned why any entrepreneur would face up to judges without having done their research.
“You see enough of Dragons Den and Shark Tank, why would you go into one of these things without doing basic preparation? We had a cheat sheet of numbers which I memorised,” he says.
“Be prepared and be open to taking on feedback even if it sounds really brutal. Don’t be so arrogant to think you have it in the bag, take everything on board.”
The runners up in the pitch comp included Salesforce event marketing startup Dashcord and gamified banking startup Moroku.
StartupSmart attended the Salesforce World Tour as a guest of Salesforce.