Just last month Ian Gardiner — stalwart of the Australian startup scene — sent shockwaves across the ecosystem as he announced he was stepping down from his role as head of the Australia and New Zealand startup division at Amazon Web Services, to work full time at Jelix Ventures, the investment business headed up by his wife Andrea Gardiner.
Andrea has been running Jelix for two years already, becoming the second female founding chief executive of a venture capital in Australia. Having already led 12 syndicated investments into nine startups, and made its first exit, Jelix is now upping the ante and raising its first VC fund.
The startup that achieved an exit is StorReduce, a cloud storage management startup which has now been acquired by Pure Storage, generating tenfold returns for investors.
“That’s certainly a feather in our cap,” Andrea says. “It certainly shows that at least we’ve picked one good one, and hopefully the rest will follow.”
For Jelix, this first exit came at the same time as outside interest in raising a fund, and so “it just seemed like a good time” to take the next step, Andrea says.
And for Ian, it felt like the right time to move on from Amazon. As the $1 trillion global company has grown, his job was becoming more corporate, he says, and while he enjoyed the work, “it was taking me further away from the stuff I like doing, which is hanging out with the founders, trying to help them and hanging out with the VCs and trying to help them and their portfolios”.
Four years ago, the Australian startup ecosystem was much less mature than it is now, and Ian has watched it grow from inside a corporate.
“Now it’s time to make the move,” he says.
“I’m getting back to my entrepreneurial roots. I love building things from nothing and supporting founders who are doing that,” he adds.
He also notes Amazon has been a good place to learn about running a large company.
AWS’s revenues grew from $4 billion in 2014 to $18 billion in 2017. That kind of growth is impressive for any company, but when they’re dealing with billions, that company must be doing something right.
“I saw how large tech companies should be run at scale,” he says.
“I took a lot of learnings from that. I know I’ll be able to apply them.”
AWS is now also supporting Ian’s other passion project,
A VC dream team
Ian might be a household name in the startup space, but Andrea is also something of an expert.
Once an investment banker with “the dreaded Lehman Brothers”, she has also worked at HBOS, and as a global debt capital markets lawyer.
For about four years she has been investing in startups as an angel investor and through Jelix, and until recently she sat on the board of fintech hub Stone & Chalk as a non-executive director.
“I’ve been equally immersed in the sector, but not for as long,” she says, “and certainly I don’t have the profile that Ian has.”
Andrea says she has “finally convinced him” to join her at Jelix.
“He’s got such a great high profile in the sector, he’s seen the founders that succeed over a very long period of time … and he knows a lot of the startups in the sector,” she says.
“He has a really strong reputation,” she adds.
They’ve never worked together in an official capacity, but the pair are not worried. Their working relationship has been tested thus far through 20 years of marriage and raising two children together.
“We’re pretty aligned on most things actually, and then when we’re not we listen to each other, so it seems to work pretty well,” Andrea says.
“We have very complementary skills sets,” Ian adds.
“I’m the swashbuckling entrepreneur and Andrea is the more meticulous, thorough CEO. It’s a balance.”
While Ian’s instinct is to get as much as possible done as quickly as possible, Andrea’s is to be a little more cautious, and perhaps to wait a while before jumping into a deal.
“The answer is often in the middle,” Ian says.
The meeting of these two particular minds makes for good investments, Andrea says.
“Ian often spots a good startup and sends it my way. But then I’m the one that’s pretty meticulous about rigorous due diligence, and structuring the terms so that you balance basic investor protections with making sure the founder is incentivised,” she says.
“I’m much more concerned about thinking of the ramifications of things long-term for the startup, which will impact on us as investors,” she adds.
And, of course, it’s not just the two of them. Jelix now has a team of five “really super-high-calibre” employees, Andrea says.
The people who have joined are excited by the vision, she adds. Although, when speaking to Andrea, it’s hard not to be, as her enthusiasm is infectious.
“It’s a new business model and it is exciting. I feel like I’ve hit my sweet spot in work — I’ve never loved doing what I do as much as I love doing what I’m doing now,” she says.
Pioneering business model
“Jelix Ventures is a startup itself,” Andrea says, “I don’t think there’s anything really like it in Australia.”
“Our value proposition to our investors is they get to invest in highly curated startups, the ones that we judge to be the best out there, and those in the strongest positions to make great returns for them.
“We have skin in the game ourselves and we only make a profit when our investors make a profit … and when our startups do well,” Andrea says.
“Everyone’s interests are aligned,” she adds.
At the moment, the platform gives investors the opportunity to invest alongside Jelix, on the same terms, to build up their own diversified portfolio.
“Going out to raise a fund is giving investors and opportunity to ‘set and forget’, and have us build the portfolio for them,” Andrea explains.
It’s an unusual model for Australia, and in many ways, Andrea says she feels like a pioneer — both as a woman in the VC space and for introducing a new type of model.
Andrea has been “blown over” by just how supportive people in the industry have been — both male and female.
“Some of the real rock stars in VC have been jaw-droppingly generous in how they’ve been willing to invest time and energy into answering my calls and questions,” she says.
“That’s one of the things I love about the whole sector,” she adds.
“The people are the top seem to accept that culture of people helping each other.”
A mixed bag
Jelix is focused on early-stage startups, for the most part up to Series A, plus follow-ons for companies they’re already involved with and which are doing well.
And, while they’re not focused on a particular sector or technology, they do tend to gravitate towards deep tech startups.
Already, they have invested in a marketplace for photographers, a New Zealand company working on noise dampening for drones, and a podcasting platform offering end-to-end audio solutions.
It’s a mixed bag, but there’s no one thing that will get you an investment, Andrea says. The team are looking for startups that solve a problem the founder has experienced, that could be rapidly scaleable to a global market, and that has some evidence of a product-market fit, she says.
There’s a “pretty comprehensive list” of things she looks for in an investment, she says, and it’s not all about the product either. The founders have to impress as well.
“Are they people that are passionate about what they’re doing and why?” Andrea asks.
Ian adds they’re looking for a “demonstrated tenacity, and ability to have succeeded through hardship”.
That doesn’t have to be in business, he says, it could have been through a founder’s upbringing, a former career, sports, or any other struggle. But a track record of perseverance is important.
Equally, for Andrea, “intellectual firepower” is important, but it’s not enough on its own.
“It has to be coupled with a voracious appetite to learn.”
She’s much more likely to invest in a founder she believes “really wants to learn from all their opportunities and people they meet”, she says.
As for surefire red flags? Andrea stresses the importance of being open. She will be out the door if there’s “any sniff of a lack of transparency … I don’t care how good an opportunity is”, she says.
She’s also always keeping an eye on the relationships between the co-founders she invests in — something that is particularly important for seed investment.
“At the early stage, if the founders fail, we’ve almost certainly lost our money,” she says.
“One of the biggest causes of early startup failure is founder bust-up.”