Alternative to angels

NEW Perth-based seed capital fund Add Venture Capital claims to be on its own in the Australian market as a fund that truly devotes itself to investing in start-ups offering amounts as low as $50,000.

AVC investment manager Conrad Crisafulli said typical venture capitalists involved in “seed” funding had an investment minimum which started at his fund’s top end.

“There really is no-one else who does that in WA and, I am tempted to say, in Australia,” Mr Crisafulli who is managing director of AVC’s manager, Clough family associate TechStart Fund Managers Pty Ltd.

AVC has just launched an information memorandum seeking $4 million under the Corporations Law’s Sophisticated Investors rules.

Mr Crisafulli said the fund had already invested $600,000 of its own seed capital to show new investors its track record and he expects to raise a further $10 million once the current tranche is completely invested.

Investments include datacasting technology group Data-Cast.Net in which AVC has invested $150,000 for a 34 per cent stake, software company XempleX ($180,000 for 40 per cent), financial software group O’Donnell Software ($100,000 for 10 per cent) and illuminated house numbering system creator Lumitex ($56,000).

The group considers itself a viable alternative to ‘angel’ investors, usually friends and family of an inventor, because it can provide a very hands-on assistance at every level very much like the various incubator programs running inn the technology sector.

Unlike the bigger funds, AVC has had no problem finding investments.

“They come flooding in,” Mr Crisafulli said.

“Much more important is to have the ability to sift them quickly.”

“To mix a metaphor, you are trying to find rough diamonds and get rid of the chaff.”

“It is quite true that there are very few players prepared to do the lower stuff. AVC is structured to help high net worth investors get the huge multiples that are available in early stage technology.”

AVC’s directors are Harry Sorensen, Robin Forbes, Paul Kristensen and Andrew Duff.