Startmate- Where Wild Hearts Begin
Startmate is a startup accelerator which invests in as well as provides aspiring founders with a 12-week immersion course. The program compresses years of development as founders benefit from the educational content as well as being part of a community of fellow founders, mentors and investors.
Their unique approach is one of ‘founders helping founders.’ The aspiring founders are mentored by successful founders who all invest in the cohort. Having successful founders as investors results in high levels of customer and founder empathy, a degree of alignment unique to the program.
Startmate is affiliated to Blackbird Ventures. Startmate’s founder-led approach mirrors Blackbird’s own founding journey where it initially raised $29 million from mostly technology founders. This underpins Blackbird’s (and Startmate’s) belief that it’s about backing the most ambitious people as their ambition attracts the best people, thereby improving the chances of success. Today, Blackbird has over $1 billion under management and provides Startmate with an invaluable network of founders and investors.
Since 2011, Startmate has funded over 130 startups with an impressive return of 2.92x. With record-high levels of startup investment in Australia, it has never been a better time to be a founder and Startmate will continue to be the home for the most ambitious founders in the region.
The Startmate Team (left to right): Yan Zhai, Lauren Capelin, Sascha Kerbert, Sophia Witherington, Michael Batko and Anubhav Ghosh
Launching a startup can be both an exciting and overwhelming experience. There are so many skills a founder would have to learn quickly, including product development, sales and marketing and pitching to investors to name a few. Wouldn't it be great to have a crash course in all these concepts supported by knowledgeable mentors as well as a community of fellow founders going through the same challenges? This is where startup accelerators like Startmate come in.
According to the Harvard Business Review, a startup accelerator is a fixed-term program supporting cohorts of early-stage companies with education, mentoring and financing. They usually end with a Demo Day where these founders have the opportunity to pitch to prospective investors.
The first accelerator program was started by Y Combinator in 2005 by Paul and Jessica Graham. Paul was a co-founder of a web-based application business called Viaweb which was acquired by Yahoo in 1998. Viaweb had an early investor (Julian Weber) who was granted a 10% stake in exchange for $10,000 and his expertise in setting up the company. This was the inspiration for the startup accelerator model of taking an equity stake in exchange for limited funding and expertise. The model has since proved very popular with Y Combinator itself funding over 2000 startups with a combined value of over $100 billion.
The opportunity to have years of education compressed into a few months as well as the fellowship from being a part of a community of founders is immensely valuable. However, fundraising is also a key benefit of these programs. Exposing these startups to a broad group of investors increases their chances of getting the funding they need to build their teams, launch their products and create the customer impact that is the motivation for these ambitious founders.
To this end, the funding scene for startups in Australia has never been better. Preqin and the Australian Investment Council reported that Australian venture capital firms raised $632 million in 2019, the second-highest level in the past 10 years. In the 6 months to June 2020, KPMG found startup investments in Australia hit a new record, growing 50% to US$945 million.
Blackbird Ventures is one of the largest venture capital firms in Australia. It has over $1 billion of committed capital after raising $500 million in August 2020. It was founded in 2012 by Rick Baker and Niki Scevak with the belief that world-class companies can be built in Australia. Theirs is an investment philosophy heavily based around founders. Blackbird’s mission statement is to invest in Wild Hearts, with the wildest dreams, right at the beginning. They define this as investing in founders who are doing their life’s work and solving big, global problems. The benefit of investing in such founders is that they tend to attract the best people to the venture, which improves the chances of success. Examples of successful investments include unicorns like Canva, Zoox, Safety Culture and Culture Amp.
Like the founders of its portfolio companies, Blackbird aims to build a venture capital firm with global scale out of Australia. This will require more ambitious founders to start and grow global businesses out of Australia and New Zealand. In a blog post, Niki described one of Blackbird’s objectives in the coming decades as:
‘Become a magnetic force to Australia’s most ambitious founders.’
Niki Scevak- Co-Founder Blackbird Ventures
Their strategy to do this mirrors that used by Australian software companies like Atlassian. Major customer markets like the US and Europe are located on the other side of the world and have different timezones. These factors made starting and building a global business out of Australia a challenge. This was especially so during the early days of Atlassian when selling software involved local sales teams entertaining and pitching to senior executives of prospective client companies. Atlassian thus became a product organisation where the sales process is led by the excellent customer experience of the users of the product themselves rather than just a few key executives at the top of the company. A bold and risky approach at the time, but it turned out to be a more scalable process as the customers themselves became advocates for the product and drove its adoption.
Blackbird’s version of this is to create several scalable products and programs to build the startup ecosystem. That would enable the emergence of more global businesses out of Australia and New Zealand.
Startmate is the home to a number of these programs. Startmate was founded in 2011 by Niki Scevak and a group of other founders including Mike Cannon-Brookes and Scott Farquhar. Each of these founders invested $10,000 into a micro-fund to fund the next generation of founders.
Thus began their unique approach of founders helping founders. These successful founders all have skin in the game and act as invaluable mentors in addition to being investors. The result of this is 2-fold
An impressive level of founder empathy given these founders have all been through similar journeys themselves.
An impressive level of customer empathy which I believe stems from the enduring customer focus that only a founder could possess.
Michael Batko is the CEO of Startmate. In a recent podcast, Michael epitomised this level of founder empathy from his approach to mentorship by saying
‘The best mentors ask really good questions rather than tell you what to do.’
Michael Batko- CEO Startmate
So while each startup gets $75,000 of funding, the greatest benefits would be the people. This is a chance to network and learn from some of the most ambitious founders in the region, a direct result of Blackbird’s Wild Hearts philosophy. The program culminates in a Demo Day where founders again benefit from Blackbird’s and Startmate’s extensive network built up over 10 years.
Startmate has funded over 130 startups which are now worth $1 billion. Its return on these investments is 2.92x which is an impressive track record given the early-stage nature of its investments.
Startmate has begun to launch new programs such as the First Believer and Fellowship programs. The First Believer program is an Angel Education Program. Its unique approach is to educate prospective investors about themselves by allowing them to explore their biases through exposure to the many startups in Startmate’s impressive annual deal-flow. Again, this highlights their belief that it’s all about people. Their program is more about discovering who you are rather than what you need to know.
The Fellowship program is an accelerator program for an individual from any background to begin a career in the startup industry. The program is run twice a year, and the current cohort has 100 participants. Niki Scevak talked about scaling this program to 5000 people per year. I think this speaks to the admirable ambition to make Australia a viable alternative to Silicon Valley with all the progress and innovation that vision would bring.
The startup scene has come a long way since that conversation in a café in Surry Hills, where Startmate began 10 years ago. This is in no small part due to Blackbird’s and Startmate’s faith that world-class founders and businesses can be built in Australia and New Zealand. There has never been a better time to be a founder, and Startmate will continue to play a key role by being a home for Wild Hearts.