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Cashed-up angels to rescue Aussie tech start-ups

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Lia Timson

\nOctober 19, 2010 \n

Comments 2

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$\"Martin$ \n

Incentive ... Martin Duursma of Citrix Systems.

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Investment of time and money in Australia\'s tech entrepreneurs is starting to mirror that of Silicon Valley, writes Lia Timson.

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Australian technology start-ups are on the verge of the big time, with a burgeoning self-help community and angel investors coming their way.

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A new angel investment fund will be launched by Citrix Systems this year to provide seed capital to 12 start-ups whose technologies are aligned with the company\'s strategic vision.

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The yet-to-be-announced global Start-Up Accelerator will favour companies working on virtualisation, software-as-a-service and many other cloud-computing innovations.

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\"There are buckets of areas that we\'re interested in,\" says the chief technology officer of Citrix Systems and vice-president of Citrix Labs, Martin Duursma. \"If they have an idea and a business plan we will help them get over the first 12 months.\" The fund will accept submissions from start-ups worldwide but will pay close attention to Australian entrepreneurs.

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Duursma, a private angel investor himself, is based in Sydney.

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\"My role at Citrix running the labs is internal innovation but I can\'t just rely on internal innovation. I need to engage with the outside to find, foster and help get their ideas to the next stage,\" he says.

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The Citrix fund will grant less money than existing venture capital funds and will include executive mentorship, business and technology guidance. It follows the launch of StartMate, a group of entrepreneurs that will fund five Australian start-ups to the tune of $25,000 each from January.

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\"You don\'t need $5 million to get an idea off the ground these day,\" Duursma says.

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\"You can do it with less. We will give money and advice. There\'s not much value in just giving away money,\" he says, adding that Australia needs to rise above a culture of entrepreneurial mediocrity.

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He says home-grown entrepreneurs still have to endure suspicion and innuendo in business circles. Previous failures are seen negatively by investors instead of being proof someone is prepared to take risks.

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\"The general prevailing question is what did that guy do to earn success, did he cheat the system? There\'s no consideration of failure,\" Duursma says. \"In the US, failures are a badge of honour. In Australia, if someone fails in a business they become stigmatised.\"

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But he admitted the culture is changing and commended the start-up community for organising grassroots networks and events that help them stay focused and energised.

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Networks such as Silicon Beach, Seed Accelerator andipitch.com.au are actively leveraging social and professional contacts to conduct boot camps, partnership matches and swap advice. Silicon Beach and Seed Accelerator also promote regular Friday drinks and start-ups parties, some attended by more than 100 people.

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The chief executive of Connect2Field, Steve Orenstein, who started his first software development company at age 19, has noticed a shift in attitude in Australia in the past year.

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\"It\'s starting to change,\" Orenstein says. \"Following on from the US where there were always VC and seed angel investors, those sorts of things are starting to happen here. It\'s good news.\"

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Elias Bizannes started the Silicon Beach network to try to fix Australia\'s \"broken image\" in the investment community.

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\"A lot of people complain there is not enough funding but it\'s a bit more complicated than that,\" Bizannes says. \"Angel investors in the US are mostly people who have succeeded and now have money [for funds]. Do we have the structure to support that investor class? I\'m not sure we are there yet.\"

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The networking brings like-minded people together and can help change some of the cultural aspects holding back would-be entrepreneurs - such as aversion to risk and fear of profit, he says.

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Bizannes believes Australian start-ups are on their way to the big time. \"It blows my mind how far we\'ve come in terms of attitude but to hit a different level it will take an entire generation,\" Bizannes says. \"We need to help people start up and let them fail so they can learn. \"

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Read more: http://www.theage.com.au/technology/enterprise/cashedup-angels-to-rescue-aussie-tech-startups-20101018-16qrb.html#ixzz1UUbPpZRP

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