Investment FOMO — can you afford to miss out?

Investment FOMO — can you afford to miss out?

When it comes to emerging globally competitive technology, Western Australia punches well above its weight.

Our state has many exciting ventures in med tech, agribusiness (includes Urban AgTech - see local example below), cyber security technologies and other industries, each presenting high-value growth opportunities to investors with an appetite for early-stage risk. 

Not all of them are ASX listed but all can be invested in before they are capable of sustaining the value necessary in a listed environment.

The challenge for investors is how to find the right ones to invest in — ventures that are well-structured, properly capitalised and with the right capabilities and connections to make them successful ... and not at crazy valuations driven by uninformed, emotional hype like during the dot.com and bitcoin booms.

Perth Angels, along with angel investment groups in other capital cities and the recently established South West Angels, take the guess work out of private investment.

These passionate investors are helping build high growth ventures by providing access to investment capital, mentorship and support for entrepreneurs and innovative business owners.

Our track record is growing through transactional engagement and activity, with almost $4m invested in 18 deals from local Perth Angels and more through our syndication across Australia. These ventures have been able to grow themselves to attract follow-on capital of a further $4m-plus.

Techboard's studies into early stage funding across Australia, noted that in FY19 alone saw over $5,260,000 invested in early stage ventures through Angel networks.

Commercial structure wins

Angel investing can source sufficient capital to build scale, create value and position for necessary follow-on capital at an increased value on the way to building value targeted for exit or cashing-in.

Angel investing also sits well alongside various source of grant funding, such as accelerating commercialisation, to ensure sufficient capitalisation.

Another key to early stage investing is valuation. Our affiliation with other angel groups all around Australia and overseas, provides excellent insights where traditional valuation approaches are simply not realistic. 

An example: Urbotanica and the emerging Urban AgTech sector.

A key criteria for any venture selected by the Perth Angels members is whether the venture is positioned to disrupt a large global markets.

One case in point is the emerging Urban AgTech sector which set to disrupt the $210b global urban farming market.

The AgFunder – Agrifood Tech Funding Report 2018, showed 2018 was another record breaking year for AgriFood Tech investments with $16.9 billion of funding.

And growth is to accelerate where the global trend is increasingly seeing people aspire to grow their own food [GYO] at home.

Ray Hart, MD Urbotanica, says “there are many challenges preventing them: no time, less space and lack of knowledge to be successful.”

“Urbotanica is focused on solving these problems through the application of emerging urban AgTech solutions to empower you to GYO at home.” 

Mr Hart says their “UrbiPod is a launch product which shows that we can empower the customer directly with Technology that is now being developed at commercial scale.”

Mr Hart says that huge opportunities still exist “with the global population set to rise to roughly 10 billion people in the next 30 years and more than 60% living in urban cities .. without drastic technological improvements and change of consumer behaviour in the way we feed ourselves, there will be a 30% shortfall in food production by 2050”.

But with any disruptive technology, where do find them and how do you get started and grow it.

Mr Hart says “the Perth Angels really gave us a great start with funding and access to networks and resources.”

“Urbotanica is now positioned to accelerate its growth with a proven product selling nationally, 100% year on year growth in the UrbiPod units and a 150% year on year growth in consumables.”

Urbotanica is also a great example of how to manage its capital runway; following Angel level funding has now opened up a crowdfunding round at an increased share value through an offering on the crowdfunding platform Equitise.

Keep your eyes open for our next article which will talk about how to take out the risk of insufficiently capitalizing an early stage venture.

If you’re interested in private investment, come along to Perth Angels’ next Pitch Night #33.

Greg Riebe is a Co-Founder of the of Perth Angels. Contact him at greg@perthangels.com  for more information on joining Perth Angels or visit perthangels.com.

Perth Angels’ Thought Leadership series is supported by the City of Perth.