A group of experienced entrepreneurs and angel investors are rolling out a seed fund and incubator aimed at early stage startups in the Melbourne area.
The venture, called AngelCube, is the first of its kind for Melbourne in recent memory. Applications open 29 July, with the first partnerships expected to roll out in mid-September.
The folks behind AngelCube include co-founders Andrew Birt, creator of the marketing agency StartUP, Adrian Stone, an angel investor and self-described web.2.0 startup junkie, and Nathan Sampimon, founder of web development company Inspire9.
In a cafe conversation with Anthill editor James Tuckerman, Stone explained that AngelCube expects to invest about $20,000 in each enterprise in exchange for around 10% equity in the company. The valuation methodology is not dissimilar to the models of seed fund pioneers Y-Combinator and HackFWD.
(To see how they work, check out the video below.)
AngelCube plans to bring to Melbourne the mentoring and kickstarting power that incubators/investors Pollenizer and StartMate have brought to promising ventures in Sydney.
The ventures will benefit from targeted mentoring and free startup space in Inspire9′s new Melbourne office.
It’s a six-month accelerator program that includes an opportunity to pitch to next-stage investors in Australia or the United States.
The fund also is gathering a group of effective mentors. The growing list already includes Scott Handsaker of Event Arc, David Wei and Ying Wang of Crowdmass and Adam Cunningham of DoMore.
“Sydney has StartMate, Pollenizer, Push Start and an active early stage angel community,” Stone says in a news release. “Melbourne has a clear lack of investors willing to support early stage web companies.
“We wanted to learn as much as we could about incubators like Y-Combinator, Techstars and StartMate, and apply our learnings in the Melbourne market. The result is AngelCube.”
Introduction to HackFWD
Jordan said on July 22, 2011
Excellent!! For too long Melbourne Angels has stood alone in Melbourne to address the early-stage entrepreneurs and we look forward to the success of AngelCube in this space and appreciate the support this implies for our pioneering in this space.
Ckaine said on November 14, 2011
Ah Jordan, are you forgetting about Business Angels Pty Ltd who has helped so many early stage entrepreneurs over the last 20 years?
Jordan Green said on November 14, 2011
Hi Christine, good to hear from you. I was not forgetting about your business providing a matching service. Although I understood it is some years now since you moved out of Melbourne. I trust your health is better living by the beach in NSW.
An important difference between your fee-for-service business and AngelCube is that they are putting in the money at no expense to the entrepreneur just as Melbourne Angels invests money rather than asking for fees from the entrepreneur. It takes all of us to help but, these differences are important and also tend to address the different types of start-ups which we each assist.
Arshad Khan said on July 26, 2011
There are some disconnects here. The video the article refers to talks about setting up the venture in Europe and paying the founder the current salary for a full year whereas the article further states "AngelCube expects to invest about $20,000 in each enterprise in exchange for around 10% equity in the company."
So what am I missing?
How far one could go with $20k? It will be all spent in setting up the company, structuring
the company constitution, writing the IM and the term sheet. Is the founder expected to beg on streets to earn living expenses?
One also cannot valuate each and every company for the same amount.
There are some serious flaws in the proposed seed fund.
Ckaine said on November 14, 2011
You have a point Arshad. Although if AngelCube puts in some, other angel investor may come on board. I have been increasingly putting together small groups of well matched angels to share in these early stage ventures. Design Crowd is a great example - they have recently raised $3m - see recent press.