New survey data from Perth-based research startup Floq shows a startup’s chance at raising investment may be influenced by the number of mentors, advisors or investors it has, and where its founders decide to work.
The Startup Nation survey of close to 400 startup companies shows that for each new mentor, advisor or investor, a startup raises an additional $69,059. Also of note; whether a startup was collecting revenue appeared not to influence chances of raising money.
“We’re based in Perth, but even on the East Coast it’s still very early days compared to most places,” says Jonah Cacioppe, CEO of Floq. “We were looking at startups and VC firms, and there didn’t seem to be any comprehensive data based on the Australian ecosystem.”
The company aims to run a regular survey with its growing database of startups to determine the key factors that drive successful startups.
Floq is partnering with From Little Things, Optus Innov8, Advance, Pollenizer and Silicon Beach to promote the Startup Nation project.
The intent is to analyse the data for trends in the Australian startup ecosystem, with the goal of helping local startups succeed. Startups, incubators, and accelerators can also add an interactive Startup Nation map widget to their own website.
It seems where you work can influence your ability to raise money. The average amount raised by startups working from an incubator was higher than those in a co-working space. Startups located in an incubator had raised an average $220,208, compared with $44,811 for those in a co-working space.
Most of the startups surveyed (57%) didn’t share an office space. Among those that did, co-working spaces seemed to be most popular. More than 20% of startups surveyed said they worked from a space like Fishburners or York Butter Factory, while 13% worked in a shared office space. Around 9% call incubators such as Blue Chilli or Ignition Labs home.
- Perth startup Floq has surveyed 400 Australian startups through its Startup Nation project (Image: supplied)
“The median number of mentors, advisors and investors for a startup — those that hadn’t raised money — is seven,” says Mike Kruger, co-founder of Floq.
Cacioppe highlights examples like Pandora CEO Tim Westergren, who reportedly pitched to 347 investors before finding one who was willing to put money in: “There’s no f**king way these startups are going to raise money.”
Kruger says more comprehensive data provides a better picture of the strengths and weaknesses of the Australian startup ecosystem.
“For me, one of the most important things is to get hard information on what people are doing. Our community suffers from a lack of visibility,” he says.
“It means governments have very little understanding of what we do, and how we do it. The number one way to solve declining productivity is to invest in R&D.”
Age also counts: more than 72% of founders surveyed were older than 30. Around 17% of founders were female, a result which differs from the findings of the Silicon Beach startup report launched by From Little Things in 2012. That report’s research into more than 1,000 Australian startups found that fewer than 4.3% of founders were female.
Startups surveyed were most likely to be working on a web application (30%), a website (20%), or a mobile application (19%). Hardware also ranked well, with 10% of founders saying they were building ‘stuff you can touch.’
The research shows that more than half of Australian startups surveyed collect some revenue, although 56% of those were earning less than $100,000 a year. More than a quarter of the startups surveyed made less than $5,000 in the past year.
“We were just looking at the data and it doesn’t look like there’s a strong correlation between raising money and traction,” says Kruger.
You can add your startup to the Startup Nation map here.