Transcript Synced · select any line to jump ▾ 0:00 Will Richards: You're listening to a Day One FM show. 0:04 Gemma Clancy: The Startup Retro is recorded on the lands of the Kabi Kabi and Wurundjeri people. 0:10 Will Richards: G'day and welcome to The Startup Retro, a weekly show brought to you by the team behind the Overnight Success newsletter, where we help you level up on the Australian startup ecosystem by giving you an insider's view on Aussie startups and venture capital. 0:22 Gemma Clancy: The Startup Retro is brought to you by Day One, the podcast network for founders, operators, and investors. I'm Gemma Clancy. 0:28 Will Richards: And I'm Will Richards. In today's episode, we dive into 3 new funds and initiatives that have launched in the past week, Paul Bassett's new not-for-profit Amplify, and why AustralianSuper has written off a $1.1 billion investment. 0:41 Gemma Clancy: And we'll cover our top startup picks of the week, including a tool to make doing data analysis a dream and an agtech company using AI to improve the way growers assess the quality of their grain. 0:52 Will Richards: Plus a short interview with Gav Parry on the launch of the Centre for Arts, Sport and Technology, also known as CAST, and what it means for Australian entertainment startups. 1:00 Gemma Clancy: And we'll finish off with our Cas of the Week, including a list of common VC scams to be on the lookout for. 1:06 Will Richards: And a special announcement: next week we'll be joined by new host Cheryl Mack from Aussie Angels, who will be gracing us with their presence while Gemma drinks Aperols in Italy for a few weeks. 1:16 Gemma Clancy: Okay, well, why don't we start by talking about all this money that's coming into the ecosystem this week? There's 3 new funds. 1:27 Will Richards: Yeah, 3 new funds, and they're all, and they're all very differently structured, which is, um, yeah, super exciting. They're all targeting very different areas. So let's get started with the first one. 1:35 Gemma Clancy: Yeah, so the biggest one, first cab off the rank, is the Walter and Eliza Hall Institute's $66 million fund, which is called 6610. And it's called 6610, I assume, because the $66 million is going to be invested over 10 years. If you haven't heard of Walter and Eliza Hall Institute, it's actually rebranded a few years ago to WeHi. I know that because I actually worked on the rebrand, which is pretty cool. Hey. So yeah, so they are one of Australia's biggest medical research institutes. They've been around for a very, very long time. And they started up 6610 about a year ago. And now they've announced the kind of value of the fund, which is going to be the largest internal pre-seed and seed fund by an Australian medical research institute, which is very, very exciting. So they're going to be investing in obviously science-based innovation. 2:26 Will Richards: And they're targeting pre-seed, seed businesses and basically getting into commercialisation. So having a real focus on obviously outcomes for, you know, patients, people with serious conditions, but then also commercial success as well. So good collaboration of for-profit and for-purpose. 2:42 Gemma Clancy: Yeah, definitely, definitely. So yeah, it's— they don't really have like LPs in the traditional sense of like a VC fund. It's, um, I would imagine largely just the philanthropic funds that they've had come into WeHi, um, as well as maybe also some government support that they've received over the years and any of the financial returns that they're going to generate will go back into supporting WeHi Research and help contribute to their long-term financial sustainability. It's still got an IC, the investment committee, which is largely external, and it's got serial bioscience entrepreneurs in there, life science investment managers, and research and development leaders from the biopharmaceutical sector. So really a very, very smart investment committee. and relevant, obviously. 3:27 Will Richards: Yeah, they've, um, they've definitely got an edge over your traditional VC looking at this space. So really exciting. 3:32 Gemma Clancy: Yeah, so that's the number one. Next one is, um, Seed Lab Australia has secured, um, an extra $7 million from Woolies, Woolworths supermarkets. And Seed Lab is an accelerator that focuses on food, drink, and sustainable personal care products. Um, and so they've— they received about $4 million investment in 2021. To support that program. And yeah, they're trying to target around 500 businesses across Australia and New Zealand over the next 3 years. So if you're a food, drink, or personal care product company looking to kind of join an accelerator program, it looks like they will be propelled forward by that extra funding. 4:12 Will Richards: Yeah, it really is just Woolworths being like, how can we get more products and get a clip of these new products? Bring them to market, support them along the way, make sure their packaging is right, make sure their marketing is right, make sure the compliance and all that sort of stuff is all sorted before basically we would accept them. So, they want to be that helping hand along the journey. But then as soon as they're ready, Woolies is like, perfect, you know, we'll get you in our shelves and we'll also help you get into our competitive shelves as well. 4:38 Gemma Clancy: Yeah. Well, I've heard it's pretty bloody hard to get on a supermarket shelf. So, I'd say this is a bit of a fast track. Maybe it comes at the expense of giving away some of your equity to Woolworths essentially by extension of the accelerator program, but it's, Yeah, I mean, I think if you were thinking of starting a product like this, and especially if you'd never done it before, it sounds like a pretty good program to go through compared to maybe others are a bit broader. 5:00 Will Richards: Woolies is pretty, like, surprisingly— like, maybe we just hear about it more, but like, Woolies compared to, I suppose, the other supermarket in Australia, like, Woolies has their own venture fund. They're doing these sort of direct investments. Like, I'd be really keen to explore, like, is, you know, is Coles doing similar stuff that we just don't hear about it and they don't market it, or Does Coles focus on innovation internally and maybe doesn't have as much of an external focus as Woolies? It's quite interesting, like we do hear about Woolies doing this sort of stuff way more than Coles. 5:30 Gemma Clancy: Mm-hmm. Yes. My impression is that Woolies is a little bit more technologically advanced in general. So, yeah, I think that that's probably represented from this outside kind of activity that they're doing. And I mean, I am a Woolies person when it comes to Woolies over Coles. I don't know about you. Well, are you Woolies or Coles? Or are you kind kind of, do you go to some fancy independent grocer? 5:53 Will Richards: Why do you think I go to some fancy independent grocer? I'm a Costco boy. 5:57 Gemma Clancy: It's just a vibe. Oh, true, actually, Costco. Are you an Aldi person? 6:01 Will Richards: Yeah, I don't mind Aldi. I'm also a fan of the— I do use the Woolies Unlimited delivery service as well. I find that absolutely fantastic to get stuff just sent across, you know, schedule it the night before and it arrives, you know, before you wake up. It's pretty fantastic. 6:15 Gemma Clancy: Yeah, we're big home delivery people, so I think that's why I think Woolies' tech is a lot better than Coles, because we've tried both out extensively, and Woolies is by far, far better on that front. 6:26 Will Richards: Okay, this isn't, this isn't the Woolies podcast. Okay, on to the next, the next, the next one, which I think is really exciting, is, is a new main sequence. Um, I wouldn't say it's like really a fund, I think it's just more of an initiative, but they've definitely budgeted, um, some money for this new initiative, which will be led by, uh, Grace Bird, who was previously a senior director at Breakthrough Victoria for a few years, um, and has worked at a few big Australian companies as well. And this initiative is called Atmosphere. 6:53 Gemma Clancy: Yeah, they're calling it a platform, I think, to, you know, because you've got to figure out what to call these things. Yeah. Accelerators are fun. Is it an incubator? And, um, they're, they're structuring it slightly different— differently to a typical incubator program or accelerator, which usually has cohorts kind of go through. You take an intake of, or like, anywhere from, depending on how big the program is, from like maybe 10 to up to even like 50-odd startups and founders, and then they go through cohort-based program taking through this is what accounting is all about and for startups and their marketing and things like that. Whereas these guys, they're— how they're running Atmosphere sounds like it's, it's a lot more customized and curated per startup. So they say, what do you need, and then give them that advice. 7:35 Will Richards: Exactly. It's not— yeah, there's no cohorts in this continuous running initiative. So, um, if there's a piece of— it's really focused on bringing research out of universities and helping them become venture-backable businesses. So you obviously need the research, you need the people to make that happen. And then Atmosphere really there is to support that, but it's really on the basis of when it needs to happen and when there's an interesting initiative to jump in and offering that support at basically à la carte. So yeah, cool to see this kick off. 8:05 Gemma Clancy: Yeah, yeah. Pretty much anything I think that gets funding from Main Sequence is usually pretty incredible to learn about. It's usually something you've never heard of before, never thought about before. If you're not aware and you're listening to this, you're like, who the hell's Main Sequence? Main Sequence is the VC that sits under the CSIRO. So the government funds the CSIRO and then Main Sequence also like kind of invests in these more commercial operations and they try to bridge that gap between research and commercialization. So some of the money that the government's invested, carved out, it's about $150 million to go towards the CSIRO recently. Some of that money will go towards this new program. So getting out of the new funds realm and into something quite different, There was some news out this week that's not necessarily directly startup relevant, but it kind of, it makes it into our headlines because it's been founded by one of the biggest names in VC in Australia, Paul Bassett. 8:58 Will Richards: One of the stalwarts. 9:00 Gemma Clancy: Stalwarts, definitely. Paul Bassett is a partner, founder of Square Peg. 9:07 Will Richards: Yeah, his description on the website is founder of Square Peg, which I think is very true. Like he is the founder. Partner. I think he's the top dog essentially of Square Peg, but he was also co-founder of Seek as well. Yes. And yeah. 9:20 Gemma Clancy: Yeah. So, Paul Bassett has launched this initiative called Amplify. It's not a business, it's not a VC fund, it's essentially a not-for-profit and like a community-based organisation that is all about kind of bringing people together to have conversations about the future of Australia and what they want to see happen and kind of, I guess, the information that they want to get to decision makers around the future of, I guess, how this country should run. I guess when I first heard about it, what was your first impression when you heard of this? I'm interested in your first, like, thoughts before you started looking into it. 9:53 Will Richards: What did you think? Yeah, I think it's like if I was an extremely wealthy, you know, person, I wanted to have influence on modern democracy. I think this is a really nice way of attempting to do that. And I think that maybe the incentives are all, you know, I think the idea of it is really interesting and quite pure compared to, let's say, Elon Musk, you know, buying Twitter or X, and, you know, now my whole feed is completely one-sided. 10:21 Gav Parry: Yes. 10:21 Will Richards: I think the idea of it is really nice. Maybe when I jumped onto the platform and sort of logged in and had a look at the conversation, I was probably a little bit like, oh, I'm not really sure what's supposed to be happening right now. But I think it's really early days and they do do a lot of— they have a lot of talk around live events and hosting conversations that people can attend and participate in. So, it's sort of hard to get a sense of how much of this is going to sit online and how much is going to sit offline. 10:49 Gemma Clancy: Yeah, yeah. It'll be interesting to see what happens. It was— my brain kind of went straight to kind of what's happening in the US at the moment when it comes to the interaction between VC and people in tech and what's happening with the US election over there. And I started to think, oh, is this Australia starting to do a little bit more of an American approach to democracy where we have people in business and people in tech and people in VC getting involved. And then, 'cause I think that's just on the brain at the moment, obviously with everything that's happening, it's like half my newsfeed. 11:18 Will Richards: Mm-hmm. 11:18 Gemma Clancy: But then when I started to look into it a bit more, it's certainly not anything really like that, at least from what I can tell so far. So they're very, very keen to kind of say that it's a very bipartisan initiative. When you look at the people on the board, they actually have Dom Perrottet on there, so the ex-New South Wales Premier, as well as an ex-Queensland Premier, Queensland State Minister on there, Kate Jones. And when you start to look at the composition of the board, certainly you get a sense that there's a balance of political views in there. 11:49 Gav Parry: Yeah. 11:50 Gemma Clancy: So yeah, my first impression was, oh, this is interesting. Like, are we kind of like, where is this going to go? What are the kind of, you know, maybe it's a bit of a cynical view, like what are the motivations behind this? But then when I started to dig in more, I was like, no, this is quite, you know, certainly seems to come from quite pure intentions, which really cool to see and just interesting to see what they do with it. 12:10 Will Richards: Yeah, I think if you look at online social media and like the increase in polarisation and that sort of stuff, like maybe having something like this will hopefully decrease that. But I just think like listening to people with opposing views, giving them the space, you know, having a very valuable— like that can be a very valuable conversation or a very valuable thing to listen to. And I do think that's kind of like if you're only on the algorithm as a young person right now, anyone, like, you only really see a certain type of— you just get pushed into a certain direction. So having these like platforms, like whether it was like Talkback Radio back in the day where everyone kind of listened to the same conversations and they were able to have that balanced, you know, viewpoint, and there was an adjudicator and lots of stuff, like, that's definitely no longer the main way a lot of people consume information. So hopefully this can sort of help push us back into a direction of like, let's have valuable discussions around these key issues. 13:03 Gemma Clancy: Yeah, given the slant of the people in the founding kind of team, or the people on the board right now, towards tech, I'm really interested to see how they try and use tech to build out this platform. One of the main challenges I think they're going to face is like actually attracting like a diverse range of people to the platform. 13:22 Will Richards: Yes. 13:22 Gemma Clancy: And then like kind of, it seems like surveys and polls are quite a big component of the platform right now. So it'll be interesting to see how do they like first launch that kind of very grassroots style research, and then what do they do with those insights? Like, are they going to involve AI in this? Are they— what are they going to do? For sure. Um, yeah, I would be kind of surprised if it didn't take a slightly more like tech savvy route, um, as it moves forward. 13:47 Will Richards: I think definitely. And I think hopefully what we see is some really, you know, like, because you do need the numbers for this to really be effective. And yeah, like, I logged onto the platform and, you know, some of the top posts weren't exactly be, you know, flying with comments. So, I think it's just going to be a slow build, you know, the type of person that engages with these sorts of things, you know, are they representative of an everyday Australian? Who knows? It's, yeah, it's an interesting one. Definitely one to watch. I think it's, you know, maybe we can get Paul on the show one day and ask him some questions about how it's all going and where he wants to take it. 14:18 Gemma Clancy: Yeah, that would be cool. 14:19 Will Richards: I'm sure he listens. 14:21 Gemma Clancy: Yeah, I'm sure he listens. Hi, Paul. Yeah, I'm sure he listens to it. 14:25 Will Richards: And the final interesting headline is quite topical because of a raise we covered a few weeks ago, which was Cuttable. And one of the key founders of that business was a gentleman called Sam Cronenberg, and he was the co-founder of a— one of Australia's darlings that sold to, um, another business called Pluralsight back in 2021 for around $2 billion. So quite a successful exit for the people involved at that stage, but Pluralsight went private a few year— or a year earlier with a big contribution from AustralianSuper, which is sort of Australia's biggest super fund. And essentially what's happened, and this is just really a case of, or maybe an example of how challenging the environment is right now, but they've written that whole investment off. And that was a business that was at one point worth over $5 billion USD, and that's now completely written off to zero. 15:16 Gemma Clancy: So what does that mean? Like, if somebody's listened to this and they're like, what does that mean they've written it off? Like, is the business dead? Like, why would they— why would they have— they decided that— yeah, like, they've essentially decided that investment's like worthless, right? Is that— is that what they're saying? Is that fair enough? 15:31 Will Richards: So yeah, the best way to explain a markdown really isn't— it really becomes apparent in the private business valuation world, because I think when you have a listed business, you can obviously see its market cap reported, you know, every day or every minute. Yeah. Every second, essentially. But when you're in the private world of investment, you have to obviously audit your, or get your results audited or report your investments back to whoever it is, your LPs, your board, those sorts of things. And those investments are marked at, you know, throughout time, whether it's, you know, and investment firms have different cadences of which they do this. And I'm sure AustralianSuper has their own way of doing these sorts of things and their own cadence. 16:12 Gemma Clancy: It's like they're aware of assessing like how much are these investments worth given it's not reported on a regular basis. 16:18 Will Richards: Yeah. Exactly, exactly. Due to whatever reason. And I think what's happened here is due to the rising cost of inflation, I'm assuming customer demand has also dropped off as well. And potentially they've got some debt as well. Basically AustralianSuper has looked at this investment that they've got and sort of said, this isn't going to go anywhere and it's not going to grow. And potentially it's, you know, maybe not in administration, but we just don't think it's actually worth anything at this stage. So they basically tell their their LPs and their investors that this investment, which they poured a fair bit of money into a few years ago, is now worth zero. 16:52 Gemma Clancy: Yeah, wow. Thanks for the explanation. That makes a lot of sense. So, and looking at what Pluralsight does, you do kind of wonder whether it's just a really crowded space and it's actually like quite, maybe quite difficult for them to grow into a really big business. It's kind of, I mean, looking at their website, they talk about essentially helping people develop critical tech skills and A Cloud Guru was focused on cloud computing skills, developing deep cloud expertise. You do kind of wonder whether like there's just too much competition for a company like that these days. 17:26 Will Richards: Potentially, yeah. 17:27 Gemma Clancy: With the rise of so many other similar kind of platforms. 17:31 Will Richards: Yeah, maybe all their margins being competed away by competitors. I think the broader story probably is, you know, this is a business that was, well, I think a Cloud Guru is obviously one part of the Australian story here, but then Australian Super is also the other Australian story here as well. But a Cloud Guru is a business that, you know, the founders there sold it basically the best time for them. So they, they really orchestrated that deal and got a fantastic result. And it's really exciting to see them starting new businesses in Australia, new startups in Australia, and raising capital and, and doing some interesting stuff. So it's good to see that that flywheel is continuing. The broader concern I think with AustralianSuper is, you know, they're an LP in a lot of VC funds here in Australia and writing off $1.1 billion is a lot of money. Like, there's no two ways about it. That's a lot of money. 18:19 Gav Parry: Yeah. 18:20 Will Richards: So the investment committee at AustralianSuper or the board, or, you know, even let's be honest, like people who, you know, users of AustralianSuper, their customers may start asking questions around, you know, is investing in private technology companies really the best use of my capital and our capital? And if you're a VC here in Australia or or another VC that AustralianSuper invests in, you know, you might be a little bit nervous around, are they going to have the appetite to keep dipping their toes into Australian startups, basically? 18:50 Gemma Clancy: Yeah, that's a really good point. I think it can't help but affect sentiment to an extent, you would imagine. But hopefully we're wrong. 18:58 Will Richards: No, no, yeah. But that's, I think it's just an example of like how the market's changed so much in the last few years. Like people were really riding that high. In 2021, 2022, and now it's really, really challenging. And it doesn't matter if you're a small business or basically a public company that was taken private at one point worth $5 billion, like, it is hard out there. 19:18 Gemma Clancy: Um, yeah, definitely. 19:23 Will Richards: All right, Gemma, let's get stuck into our favorite startup raises this weekend. To be honest, it was actually a very busy week for startup raises as well. It wasn't just the funds that were kicking off this week, it was also startups announcing that they've got some fresh cash. So who was your pick of the week? 19:36 Gemma Clancy: Yeah, my pick this week was a company called YHive, and they raised, um, a $600K round. And it sounds like a small round, but it's like actually such a cool, cool, um, startup that I, I think it's, it's definitely worth everyone checking out. Like, pretty much I think anyone listening to this, um, podcast could use this tool. And I think that that's probably reflective of the market opportunity, the opportunity that they're facing. And, um, from what the founders have said, that, that, that is, um, a a big reason why people did invest. So the round was led by Scalata Ventures and backed by Culture Amp's John Williams, Linktree's Alex Zachariah, and UpBank's Don Pym. So as, as well as a range of probably other angels as well, but they're kind of the headline ones because they're quite well known and respected in the startup ecosystem, um, investing alongside Scalata. And essentially what YHive does is that it's that they've taken inspiration for the likes of like Canva and Miro, and they want to democratize data and analysis and make it feel actually more fun rather than like really it's like, I think most people hear data analysis and unless you're a real data nerd, the actual process of setting up a spreadsheet, looking and like turning into something that you can use, I would say most people are more interested in the insights than they are in the process of getting the insights. 20:54 Will Richards: Mm-hmm. 20:54 Gemma Clancy: And that is exactly what YHive is kind of trying to solve. It's like make that whole process a lot easier, a lot more accessible to anyone regardless of what your background in data is. So you can get to those insights really fast and you can then share those insights sites with anyone really easily in the same way that you could just jump into Canva and whether you're a designer or not, you can make a design and you can ship it and share it really quickly. So yeah, I spent some, quite some time just playing around in the, um, YHive platform, watching their demos, um, looking at some of their example spreadsheets. And, um, I'm super excited. Like, I want to jump in there and figure out what data I want to put in there, which is kind of weird, right? Like, yeah, it's unheard of. 21:35 Will Richards: I've, I've definitely heard a few investors sort of say You can look at every way people use Excel spreadsheets for their particular, like, problem set. And it could be some— like, people use Excel for thousands, millions of different reasons, and basically each one of those can be its own business for people who basically don't want to use Excel to solve that problem. 21:56 Gav Parry: Yeah, yeah. 21:56 Will Richards: And I think this is like the— basically the, the global example of like, well, Excel is used for a lot of data analysis and a lot of people just hate doing that, so yeah, let's make it super easy. 22:06 Gemma Clancy: I do think regularly, and I think I was even just saying to my husband last week, like the fact that we're still using Excel for so many kind of crucial tasks, like so many people in kind of desk-based jobs are using Excel at least on a weekly basis probably. And the fact that it's still so inaccessible to use, like I have to look up formulas every time, like I want to do something slightly more complicated than a sum, and it's just, it's just mind-blowing. So I, I do genuinely think that in, yeah, you know, only a few years' time, especially with AI now, that which this tool is already using to do things like, say, sentiment analysis and tag different, say, survey results based on sentiment of qualitative responses. Like, this is the future. You know when you see a tool and you're like, okay, this is the future. Oh, yeah. This is gonna be the thing that everyone's using. That was my reaction to this. So— 22:58 Will Richards: Yeah. 22:58 Gemma Clancy: I think they were probably quite strategic about how much they decided to raise. The size of the raise, I don't think is the reflection of the size of the opportunity or the quality of the product is incredible. 23:08 Will Richards: I think that just the setting up a spreadsheet, you know, trying to clean your data, like it does all that really, really boring shitty stuff. 23:15 Gav Parry: Yeah. 23:16 Will Richards: And just, and you get the results super quick and it's kind of like, oh, and then you can play around with exactly how you want to spit it out. 23:22 Gav Parry: Yeah. 23:23 Will Richards: But for stuff like, you know, just a quick, you know, just dumping survey results or dumping like, oh, here's some customer feedback or some just product data. From whatever channel, you get a result within seconds. Like, it's, it's fantastic. 23:37 Gemma Clancy: Yeah, it's really cool. So, um, yeah, so like the other interesting thing was that the founders then used their own platform to share data about their raise. So they kind of— they didn't necessarily say who they spoke to as part of their raise, but they released all the, all the data behind it. So, um, how many people did they speak to, what percentage of them passed, which ones invested, which ones did they pass down, um, and then also talked about like how long it took to, to close, and like kind of how many meetings they had on average. And then also the reasons behind some people investing and not investing. And this is pretty unheard of. Like, you kind of hear this data like anecdotally from founders, maybe after the raise. Yeah, we got most of the people towards the end, and, um, we— I had to speak to 500 found— like investors, all these kind of things. But it's really cool that these guys decided that they wanted to put the data out on, you know, public display so that other people can learn from it. And I think it probably speaks to the fact that both of the founders, Thi Guthrie and Matt Cohen, they come from social enterprise background. I think that they're going to be, you know, given their background, they're probably going to be looking at how can you use the platform in a really positive impact way. Yeah, I have to do a shout out to Thi actually because they've been really instrumental in the background on the Funding the Balance initiative that we've been running, which is all about highlighting the data that highlights the gap in terms of allocation of funds by gender. And, you know, obviously this is kind of also a platform that's going to help share data like that more easily. And I think that's a really great example of how data can actually be a really, really positive force for change. So yeah, I'm just like super excited for this team. I wish I could have invested now. Like, now, now kind of like seeing it and also seeing the investing team, I kind of like want to be in the room, but, um, maybe in a future round and if I have more money. Exactly. 25:28 Will Richards: Do you think, are we able to share that, the funding data analysis that they shared publicly in the show notes and on the newsletter this week? 25:36 Gemma Clancy: Yeah, yeah, definitely. So, all you have to do is sign up for YHive. I'm going to sound like an ad now. But you have to sign up for YHive. It's free to have an account and then you can just jump in and it's really easy to find the example spreadsheets that they've got. 25:52 Will Richards: Oh, so it's in their platform. 25:54 Gemma Clancy: Yeah, it's in their platform. 25:54 Will Richards: And then you can jump in and have a play. Oh, fantastic. 25:57 Gemma Clancy: Yeah, it's really cool. 25:58 Will Richards: I would love to chat to them about, maybe there's notes on it, but like why the investors that potentially were keen to invest and they were like, no, like just understanding that the idea of like why they went with certain investors and not others when the cash is potentially the same is quite interesting. 26:16 Gemma Clancy: Like why, why, why have turned them down? 26:18 Will Richards: Yeah, yeah. 26:19 Gemma Clancy: Yeah, well, one of the reasons I think that it looked like that when you look at the raw data, you can see you could filter by who they passed down and One of the key reasons I think is around values alignment. And given their background in social enterprise, I'm not surprised. I'm not saying that they had a meeting with someone they thought they were a bad person or whatever, but obviously they just decided that they just weren't a good fit. So that's an interesting one, but you can jump into the data and you can see those reasons. So you could filter by investor they spoke to who they decided to pass down and then look at the reasons. And you can also look at like, how were they introduced? How did they find them? All those kinds of things. 26:55 Will Richards: Oh, this is fascinating. I've just jumped on. So they've got even like, how did we meet the investor? And it's everything from warm introduction introductions to cold email outreaches. And then like right in the column next to it, it's like, okay, how many meetings came off the back of, you know, that introduction? And one is even like we won a pitch event at a, you know, a pitch fest or whatever, and we had 3 meetings off the back of that. And it'll be so interesting to sort of see like how, you know, what's the most effective way of reaching out to investors here in Australia that actually like end up in successful investments that close. 27:25 Gemma Clancy: Yeah, yeah. I mean, by far the biggest category of how they ended up speaking to an investor was warm intros. 27:31 Will Richards: Classic. 27:32 Gemma Clancy: That, I mean, I'm not surprised. To me, that's like slightly concerning because you do kind of go, okay, well, you have to kind of be in and in the know to speak to an investor. I'm not surprised, but yeah, it's quite, it's quite interesting. 27:43 Will Richards: I think something like this, like, they could easily get acquired by a Canva within like 12 months because the Canva spreadsheet stuff is just shit and it completely, like, it just excludes people who work in finance really from using the tool at all because just putting data and it sucks and it's really manual. But building nice creative is, is like part of like, you sort of, you need to do it. So if they can, if they can embed like, you know, like what they've done with Leonardo, if they can embed a really, like a really useful tool like this to then create, and then they do the creative of the beautiful graphic stuff on the other side, and then you can edit it all in Canva, like that'd be really interesting. 28:20 Gemma Clancy: Yeah, well, especially because Canva is now doing their enterprise model and they're kind of getting into more docs and those kind of things. They're actually almost like trying, Canva's almost trying replace like Google Docs and like the Microsoft suite, like slowly but slowly, slowly kind of edging into that space. So with this, this is like a design-focused, almost like visual-first approach to spreadsheeting. It makes a lot of sense for— yeah. Okay, well, so I mean, my, my startup pick was pretty cool. How, uh, how did you go? Are you gonna beat me with, with yours? 28:52 Will Richards: Well, we love a live demo. Unfortunately, I don't think I'll be able to demonstrate what this startup does live on, on the podcast, um, but my startup, because I'm not at a farm. Uh, my startup of the week was a startup called Cropify, and they harvested— I love that from— I think it was Smart Company wrote the headline— they harvested a $2 million seed round. It's just so many puns you can make with so many puns. 29:16 Gemma Clancy: Yeah, yeah. 29:17 Will Richards: And what they really do is they're helping growers basically analyze the grains and the pulses, which are edible seeds, um, of, of plants. So legumes that you, that you hear about, so dry beans, broad beans, chickpeas, cowpeas, those sorts of things. Basically, as the tractor or the harvester is harvesting these things, the cameras that Cropify have will analyse that in real time super, super quickly and basically keep track of the quality of the stuff that's coming out of the ground. 29:49 Gemma Clancy: Mm, yeah. Now I have to say, I have a slight conflict of interest when it comes to this startup because I've actually worked with a different company that does a very similar thing. So, but what it does mean is that I can speak speak a little bit about like my knowledge of grain grading, which is very, very niche and specific. 30:04 Will Richards: Yeah, yeah. 30:05 Gemma Clancy: I don't know why I've seemed to always have experience with this random, random, very niche, niche areas. But yeah, I was, I was blown away when I started learning about grain grading and like it's how important it is for, for growers and the impact it has on kind of, I guess, how much they can charge for their grain and then like how they market the product. It's, it's huge. So like say for example, you've got like a grain from— that's like a wheat grain. If it's of a really high quality, they would be able to market it for completely different use cases to like a really, really low grade of grain. 30:39 Will Richards: Yeah. And like, it's all the way from this grain could be used for high-end sourdough bread, as an example, or like really good certain types of pasta. And then on the lower end of the scale, it's like this will be animal feed. 30:52 Gemma Clancy: Yes. 30:53 Will Richards: For cattle, which is sort of the lowest quality. And it all comes down to, you know, what's the— what's the protein levels of, you know, what's in this? And they can basically use cameras now, and this is exactly what the business is doing, is using cameras to analyse this in real time. But it can really change the way farmers think about when's the exact time they actually want to harvest their produce. And is it now, or should we let it mature a little bit more and potentially the levels of the protein could come up and basically we just get more money per tonne for the hard work we've done? 31:23 Gemma Clancy: Yeah. Yeah, makes a lot of sense. And it's really cool to see that an agtech startup is getting support in Australia because agtech is like so big here. And just all like agriculture is obviously one of our biggest industries. Makes a lot of sense for Aussies to be not just, you know, producing the food, being the food producers, but also being the ones to develop the tech that supports this industry. And it's also a South Australian startup, which is always nice for me as an Adeladian to see. So I hope that they can, yeah, yeah, like see more and more success in the future. 31:55 Will Richards: Yeah, I'll just quickly say, so the investors were Mandalay Venture Partners and then Singapore-based Hatcher+. And those two investment firms have come together for the first time investing in the startup. But I think it's the start of, you know, we're gonna see these two outfits investing quite a bit in Australian agtech, which is, yeah, really, really exciting. The Startup Retro is supported by Teamified. So I'm super excited to be joined by Simon Lee, the co-founder of Teamified. Simon, I'd love to get your thoughts on the rise of fractional roles for startups in Australia. It's a trend that I'm seeing really start to kick off lately. How do you sort of see that in the market at the moment and what does Teamified do to help? 32:38 Gav Parry: Yeah, I don't know about you, but everywhere I'm seeing fractional everywhere now. If you actually look at the biggest cost on people's balance sheet is their labor costs, right? And 90% of businesses, it's their labor costs is the biggest cost. And so building remote teams is a great way to reduce the cost, but fractional services is also, you know, if you're a small business, do I need to hire a full-time CFO? Do I need a full-time CMO? We'll hit $18 mil revenue this year and I've still got a fractional CFO and a fractional CMO and they do an amazing job. When you're trying to start a business, trying to find who should I partner with and having someone that at least a vetted CMO or a vetted CTO is just gonna make it that much simpler. 33:16 Will Richards: To learn more about how Teamified can help scale up your business, head to teamified.com.au. So super excited to be joined by Gav Perry from CAST, the Centre of Arts, Sports and Technology. And Gav is also one of the writers of PulseCheck and he does does every month a really interesting section that Gemma and I love reading because we learn so much about a sector that honestly we just don't know much about. And I think it's sort of a misconception maybe that investors and startup founders and people more broadly probably don't really have a super strong opinion about what happens in the entertainment sector here in Australia. And we are a bit of a powerhouse that sort of no one talks about. So really excited to bring you on the podcast for a quick interview about what you're doing at Cast and also what you're doing in the entertainment sector. So Thanks, Gav. Thanks for joining us. 34:06 Gav Parry: Of course. Well, lovely to chat in a more official sense than we usually do. 34:10 Will Richards: Yeah. Often doing Zoom video calls and chatting about all things, but good to make it official. So, Gav, why don't you just touch on sort of what Cast is and why you got started? 34:21 Gav Parry: Yeah. I'll give my life story very quickly, but basically, I've spent the last 10+ years in music industry as an artist manager, founder, Yeah, done a bunch of different things within as an artist and really got my head around the music industry. I jumped into startups after starting a platform called Your Favorite Team, which is helping artists navigate their career in the music industry during COVID And through that, met with a few people who got me into work at Innovation Bay with Faden Nean, which is awesome and a great, great bunch of people. And from there, then went into work at Entertain, which is a global entertainment company, and I was heading up their their innovation arm here in Australia called Innovate. Through that, I got to chat with some really interesting startups, but the biggest thing that stood out is that startups don't know how to sell to corporates, and corporates actually don't know how to engage with startups. So, especially within entertainment, I— we were really focused on venues, but when my role finished up there, I started to see there's a much wider issue with entertainment, and that the people that the startups need to chat to and connect with and sell to they just don't have a line to and spend a lot of time trying to get those connections. So, Cast was very much born out of the need to connect the builders and buyers within the entertainment industry. And from there, really, the thing that's hit the nail, I guess, with timing-wise has just been the change in the creative economy at the moment, whether you're an artist, visual, music, the live music inquiry and a bunch of things going on. There's a real change happening. Yeah. And we feel it's an important time to be putting investing in entertainment, the entertainment industry in general, front and center so people start considering it as a more viable investment, I guess, category, we call it. 36:04 Gemma Clancy: Mm-hmm. 36:04 Gav Parry: So yeah, I think that's probably the main reason CAST is around, and really now it's about a membership organization— well, it's a membership organization rather, and over the next couple of years, especially leading up to the Olympics and Paralympics, we're really growing our footprint and getting more and more startups on the platform so people can discover them. 36:21 Will Richards: Yeah, I'd love to touch on the why now. Obviously the entertainment industry went through a difficult time in COVID with a lot of venues shutting down in that, in that quite turbulent period. And you mentioned there like this technology change and this sort of shift to creator. Is, is that the— is there any other reasons, or could you touch on maybe why those are the catalysts to the why now of starting this? 36:42 Gav Parry: Totally. So we know especially now when you look at how much— again, we'll just touch on the music industry as a good example. Venues are struggling off the back of COVID Consumer behaviors are really changing within entertainment and you kind of mentioned off the top, no one thinks about entertainment but it touches on everyone's lives every day. And it's almost like we expect it to be there. A lot of time you expect it for cheap or free. And there needs to be a value change in the way that we view entertainment as a category from sports across everywhere that you go to experience entertainment in venues. And I think without that understanding of where things are going and that changing consumer behavior in terms of what customers actually want, or fans really want is what we talk to, the industry is going to be left behind. And it's going to be— again, it's very top-heavy at the moment, but it's going to become more and more so. Mm-hmm. Which is really what we're trying to avoid, I guess, is making sure it can be really distributed. You know, if you're a fan of a certain niche and we're seeing those examples on YouTube now, you can make a great living from that. But how do we make sure that is more accessible to a bunch more people? That's kind of why we think now is a really important time. 37:57 Will Richards: It's an interesting point. I think you've got a cool dynamic of potentially how you're finding those new talents coming up, and that's the Triple J Unearthed sort of strategy. Could you maybe talk about what, like how Cast sort of replicates what triple j does to discover new artists and new creators and new founders? 38:13 Gav Parry: I do feel bad. I completely ripped it off. So my journey— 38:18 Will Richards: It's in the name. 38:19 Gav Parry: It is in the name. But as an artist myself, our first song got discovered on triple j Unearthed. We got played within 2 weeks of uploading it and kind of has laid out my entire career. I know how important discovery is in the music industry. It's exactly the same in innovation. So no difference to the way Triple J has competitions where you win a spot on Splendour when it's on, or another one of their events that they run or partner with the festivals to run. We want to do the same thing. So through our events, we'll give startups and scale-ups the opportunity to showcase at our events. We're gonna, in the new year, we're going to be launching quarterly grants as a way to attract more and more, I guess, startups into the space. So So, we do think that— I mean, you just look at all the great acts who have broken in Australia, 90+% of them have come through Triple J and Earth. And we think the same can happen within entertainment. So, yeah, literally just flogging a great idea. 39:16 Will Richards: Very good. And the team that's sort of around the Cast board— well, sorry, the board of Cast is really impressive. I would love for you to explain sort of who's jumping on board and maybe the groups that they represent and why they're all interested in being part of this association? 39:32 Gav Parry: I guess it's the first time I've been able to have a project where I've met a lot of great people along my journey in startup and music and I guess the entertainment industry more broadly. And I've been able to bring them around a goal that we're trying to achieve and really that shared vision. So Ella Petit, who's joined as marketing and membership manager, Ella has spent 15 years in the music industry at Mushroom before jumping into Innovation Bay. And working and really understanding both sides of the entertainment tech space. On the marketing angle is great. Joel Edmondson on the advisory board, who's the CEO of the VMA, so the Venue Managers Association of Australia, and that's Asia Pacific. He actually employed me when I was at QMusic, a big sounder, Joel, and I stayed in touch over the years just sharing our love of arts, music, and really knowing how the importance that plays in everyday life. So Joel on the music side. We had Nicole Kelly, who's had 25 years in government across innovation, sport, and arts. So Nicole can bring a wealth— well, brings a wealth of knowledge for us to better understand how to navigate the government space, because obviously when we're setting up an organization like this, those interactions with the government are super important. And finally, Brad Moran, who I actually met at a startup event 4 years ago and heard him talk about his journey and just how tough it was. Brad and I started to do some work together. And really, I love Brad's story as an athlete, a professional AFL football player who then has gone on to do incredible things off the field. And obviously, really, that time he spent as an athlete really shaped his future and set him up for everything he did. So yeah, having Brad on the athlete side and someone who's probably— I mean, arguably one of the most successful athletes in Australia off the field, uh, is incredible. And, you know, the wealth of knowledge he brings in building huge tech platforms that can be acquired is awesome for the community. So yeah, it's a really interesting group of people. And finally, Alan Smith, who knows pretty much everyone across recruiting, especially within the creative space. So yeah, an interesting bunch, but all really love entertainment and the role it plays in our everyday lives. 41:42 Will Richards: Yeah, it sounds like a really well-rounded board for this particular problem set. Like, you've got sports, music, venues, government relations and obviously the people factor all covered. 41:53 Gav Parry: It was a fluke. 41:55 Will Richards: Yeah, sometimes things just come together, which is great. 41:58 Gav Parry: Of course, but it looks like I'm a genius, so I'm also happy to claim that it's been really well planned out. 42:02 Will Richards: Of course, of course. I'd love to maybe end the conversation with who should get involved right now and sort of what Cast is looking for from the startup community. So whether it's investors or founders, promoters, you know, why should they engage with Cast and what can you help them with? 42:18 Gav Parry: Of course. So probably the biggest thing at the moment is the amount of conversation I've had with music organizations, entertainment organizations, people who really are at the heart of the industry and want to, I guess, evolve and see those new products. They don't have a place to go at the moment to find them. So if you're a startup working across venues, stadiums, festivals, conferences, something to do with the fans, you know, it can be within Web3, it can be gaming, I'd love to hear from you. We just think the more visibility, the more people actually see the stuff happening within the entertainment and fan tech space, we call it, is what's going to make this more and more successful and attract the investment and eyeballs that we need. So I'd love to chat to any founder who's in that space. So hit me up, get me on LinkedIn. I'd love to talk. On the investor side, I think this is— it just comes down to education. And our job really is to go hey, check out all the cool startups that are here that are doing really great stuff. I had an interesting message exchange yesterday with the founder who, when they were raising their round, they actually are within entertainment and they went to a lot of entertainment VCs and actually found the bar to get investment from them was far higher than it was for other VCs that ended up investing in their round. So there's almost a bit of a hesitation to invest in entertainment because it is really top-heavy and it's really hard to find those pathways from from I've got an idea, I've got customers, to how to get it to a billion-dollar business. The entertainment industry unfortunately fights a lot of innovation. So I think there's this part where we've really got to work on trying to find those clear pathways to get a good product into the customer's hands, to get them buying it so it can scale, and find those pathways a lot quicker to attract more investment. So if you're an investor that just loves entertainment and would kind of really be keen to be across what we're working on, and obviously that flow of, well, the Triple J north of the startup ecosystem and see those startups that are coming through, I'd love to chat as well. And more broadly, anyone who just loves entertainment and uses it and listens to it and watches it every single day— the more people we can have supporting what we're doing, the better and stronger, uh, industry that we create. And we can enjoy what we love for years and years to come, which at the moment I think is the most important thing, which I don't know many people are going to argue that. 44:34 Will Richards: Fantastic. I think when you ask the question, anyone who enjoys entertainment— 44:40 Gav Parry: I should be getting like a million emails. 44:42 Will Richards: Are you not entertained? 44:45 Gav Parry: So thanks, dude. And I think the thing that has been really great with writing for PulseCheck as well is exactly what you spoke to off the top is that it's not something people think about. And I think the more that we can start to get it front and center and get people starting to talk through an idea that they may have, someone they've met who is interested in solving a problem, and we can help kind of be that home base for them as Cast. That's really what we're trying to do. So yeah, thank you so much for having a chat. Hopefully I didn't waffle too much. 45:17 Will Richards: That was a very good yarn. Thanks for jumping on, Gav, and I'm sure there'll be a few people reaching out to learn more. 45:21 Gav Parry: Legend. Thanks, dude. 45:26 Will Richards: All right, Jim, let's jump into our cast of the week, which is of course Knowledge as a Service, where we share our favorite startup-relevant read, listen, or watch. What was your pick of the week? 45:36 Gemma Clancy: Yeah, my pick of the week this week was another podcast series. So anyone listening to this is probably, probably a podcast fan, so I thought that our listeners would enjoy it. Um, it's Crucible Moments from Sequoia Capital, and they are launching their— well, they have launched their second season of the podcast series. Um, the last one I think came out in last year, in 2023, and I think I actually included it as my in the newsletter back then. And yeah, the first episode that's out now is interviewing the founders of ServiceNow, and then some of the other episodes that they've teased are with the founders of YouTube, DoorDash, Dropbox, and Reddit. So, you know, just like a slightly star-studded interview lineup. It's pretty cool, and it's hosted by the managing partner of Sequoia Capital, um, Roelof Botha. So, um, pretty cool, interesting conversations lessons to be had, I'm sure. So, if you've got any long drives ahead of you or like me, I've got some long flights ahead of me, I think I might be listening to that one and feeling maybe a slight element of imposter syndrome or maybe relief that I have not had to go through the ups and downs of some building such big startups. 46:46 Will Richards: Are you going to go to Italy and listen to venture investing startup podcasts on the way? 46:52 Gemma Clancy: I'm in two minds. 46:53 Will Richards: It's a good way to switch off. 46:54 Gemma Clancy: I know it's one of those things where, you know, I am genuinely interested in it, but as soon as I get into it, um, uh, you know, it feels a little bit too close to work. So we'll see, we'll see how I'm feeling about it. Maybe it'll be like getting my head back into work mode on the flight home, which I might need, uh, given it's such a long flight back from Europe. But, um, yeah, it's a good, good podcast. Definitely recommend a listen. What was your pick this week, Will? 47:19 Will Richards: My pick this week was an OpenVC blog called VC Scams, and really what it is His 13 examples of the way, let's say, not the best actors in ecosystems can potentially take advantage of founders. And basically just red flags to look out for in conversations, especially at the, I think, the really early stages. But yeah, just maybe certain things that investors do or say that probably raise an eyebrow and you should look out for and probably just walk away if you sort of see these sorts of things. 47:51 Gemma Clancy: Yeah. Such a clickbait headline, VC scams. 47:55 Will Richards: Yeah, I know, I know. 47:56 Gemma Clancy: You can't help but read it. 47:57 Will Richards: It drew me in. 47:58 Gemma Clancy: Yeah, but it's good. I mean, it's good that somebody is letting founders know about this stuff. I mean, capital raising is such a ridiculously long and arduous process. The fact that somebody will go through that process and then realize that they haven't actually got a good deal is pretty heartbreaking. So yeah, it's pretty cool. OpenVC is US-based, I assume. 48:18 Will Richards: Yeah, it is. But I think these scams are sort of things that you kind of hear. 48:24 Gemma Clancy: Yes. Yeah. 48:25 Will Richards: Across the globe. Like, they're not necessarily— like, I think we've all heard of, you know, certain people trying to get equity super early or angel investors maybe not playing by the wholesomest of rules. So, yeah, it's just a good read for— especially, I think, one to send any founder who's really maybe going for their first capital raise, just a heads up of like, hey, just look out for these sorts of things. I think that the biggest one is probably more around just like not wasting time. Like if you sort of see these things, it's probably just like, ah, like it's not worth really dealing with this person and going through the whole process with them. Mm-hmm. Because at the end of it, if they've spoken around, you know, about it in a certain way, you're probably gonna know at the end of it, like they're gonna offer you a crappy deal or you're gonna come out the back of it bit worse off. 49:12 Gemma Clancy: So yeah, well, going back to the conversation about YHive and their— them releasing their data, you can certainly see what maybe was normal for them from that data and also see that there's a lot of different reasons why VCs will turn you down, but also that you can turn VCs down if you don't feel like it's a good fit. 49:30 Gav Parry: Yeah. 49:30 Gemma Clancy: Yeah, I can see this is a great article. OpenVC always has some accessible, you know, tone of voice and language, and I love the GIFs. And I've just scrolled down and spotted a Peaky Blinders GIF. Yeah, I'm late to the Peaky Blinders, um, uh, train. I'm just watching it now, like I'm in season 2. So, but you know, it kind of resonates, the whole, uh, Peaky Blinders corruption, uh, and scams. 49:52 Will Richards: Yes. 49:53 Gemma Clancy: Yeah, yeah, yeah. Very good gift selection. 49:55 Will Richards: Yeah, maybe. Is it, is it good to call out a couple of examples from— 49:59 Gemma Clancy: Yeah, let's go for it. What was it? What was the one that surprised you the most? 50:03 Will Richards: Well, I think maybe not surprised me, but I think the, the biggest call out is definitely like the Angela angel investor or angel advisor who's happy to, you know, tip some cash into your startup but then wants to be paid a certain amount to be an advisor throughout the journey. And, you know, over the course of a year or 18 months, basically they end up with equity in your business. And the original, you know, $30,000, $40,000 they put in, you've now paid them back more than that. So they're sitting there very happy being paid the whole way, and you're going, oh God, I didn't get much out of this. I think the most surprising one Following on maybe your comments around why HIVE is scam number 11, which is the crazy good deal. And it's actually quite interesting here because you might feel like, oh my God, this deal is fantastic. But what they're sort of saying is sometimes when the investor is offering you more cash than you actually need, the valuation's higher, you're going to retain more equity. It's like, it's a fantastic deal, but the long term longer-term outcome of that is potentially your next valuation will be even harder to raise. So you're exposed to the risk of a down round, and then VCs protect themselves in this process through liquidation preferences. So if you're, you know, if you're not savvy about this and you feel really ecstatic about your valuation at this earlier round, potentially the longer-term outcome is basically the, the original VC can take advantage and, and grab a heap of liquid preferences on that down round, which is, um, yeah, not a good outcome. 51:32 Gemma Clancy: Yeah, yeah. No, it's a great article. I think it's a good one for anyone to read, but particularly obviously people who are raising right now. And, um, yeah, we'll put it in the show notes. Thanks for joining us for this episode of The Startup Retro. We would love to hear what you thought of the show, so feel free to reach out to us directly on LinkedIn, or even better, you can follow us on your favorite podcast player and leave us a review so that more people can find us. And if you enjoy the podcast, you'll probably also really enjoy our weekly newsletter, Overnight Success, which goes into even more detail on the news headlines and startup raises and much, much more. You can subscribe to the newsletter at overnightsuccess.vc. Catch you next week. Catch you next week. 52:26 Gav Parry: Listen to the Unfunded Podcast, brought to you by the Day One Network and hosted by me, tech writer Joan Westenberg. We're sharing the no-holds-barred untold stories from entrepreneurs who have decided to build a business on their terms. I'll be interviewing successful founders and operators on the grit and ingenuity it takes to build a successful startup. It takes to build and scale independent startups without the support of traditional venture capital funding. Subscribe to the Unfunded Podcast now, wherever you get your podcasts.
