Australian crowdfunding platform VentureCrowd has partnered Sydney Angels - an angel investor group - to give more local startups a chance to access venture capital.
Sydney Angels, a group of more than 70 high net worth investors, will refer startups to the VentureCrowd platform that can benefit by crowdsourcing funds from sophisticated investors.
It is the only angel group in Australia with a dedicated sidecar fund, worth $10 million.
Since 2008, Sydney Angels has made more than 35 investments, of between $200,000 and $500,000, in companies such as Ingogo, Venuemob, Posse and DriveMyCar Rentals.
The partnership will help to grow the number of startups that could join the VentureCrowd platform, which has already been used to fast-track growth in companies such as Ingogo, Fame & Partners and CrowdMobile.
Artesian Venture Partners chief operating officer, Tim Heasely, said the Sydney Angels were passionate about identifying ‘the next big thing’ in a variety of sectors, and we are excited to leverage their due diligence skills and expertise as well as their highly methodical investment process for investors on the VentureCrowd platform,
According to a company statement, Sydney Angels has spent years building extensive deal flow of high potential startups from which they filter the most investable startups.
Sydney Angels members employ a collaborative due diligence process to determine which startups receive investment.
Sydney Angel management committee member, David Jackson, said he believed more head were better than one in early stage investing.
"So by pooling our expertise and networks, and sharing the work, we can come to a consensus view on the merits of a deal and investment terms,” he said.
“That way we can keep the failure rate of the startups we invest in to a more acceptable level than it would be without good due diligence.”
VentureCrowd, backed by Artesian Venture Partners, works with around 25 partners including early-stage business incubators, accelerators, venture capital firms, universities and digital agencies.
This network of partners provides pre-screening and selection of startups that feature on VentureCrowd, ensuring wholesale investors on the platform are accessing the best deals currently available.
VentureCrowd previously worked with Sydney Angels to co-invest in fashion technology startup Fame & Partners. The partnership will formalise an approach to further collaborate in 2015.
Jackson said Equity-based crowdfunding was a great way to access a different group of investors and to top up an investment round led by more experienced professional investors, like Sydney Angels members.
“We support this investment method as complementary to existing ones, not an alternative," he said.
"It would be great to see equity crowdfunding platforms like VentureCrowd opened up to retail investors.”
Wholesale investors, keen for unrivalled access to the most exciting start-up businesses in Australia, can register online to become involved in other deals offered on VentureCrowd.
Investors can invest as little as $1000 on the VentureCrowd platform.
VentureCrowd encourages wholesale investors to build a diversified portfolio of start-ups to mitigate the risks involved in startup investments.