RealVC had a first close of $20 million, and is in the marketplace tapping other investors for the remaining balance of the fund. The primary investors in the company are Hubridge Capital, the family office of Navitas education founder and president Rod Jones, and technology, mining and resource investor Craig Burton.
Mr. Berryman said Australian Financial Audit The fund had already begun meeting founders from across Australia who were looking to secure their first overseas funding. He said the initial startup market in Australia was relatively low, with most local funds looking to buy into companies after someone else made the initial landing.
Other funds in Australia that say they are targeting this market segment include Gilex Projects and Black Sheep Capital.
He said the broader slowdown in tech investment, which began with listed US stocks, has precipitated A wave of iteration across Australian startupsdid not at all dissuade him from launching RealVC.
“We actually think it’s a great time to launch a venture capital fund because, especially in the initial phase, there’s a really good placement before the big players like AirTree, Blackbird and Square Peg really care,” he said.
“There are still great founders, great ideas, and great market opportunities that haven’t changed just because the overall environment has changed.
“While other Australian funds say they are happy to invest in seed companies, a lot of the founders I have spoken to say it is very frustrating to deal with them, as none of them will lead a tour, and will only offer $250,000 to $500,000 to give themselves the option to buy More later if the company survives.”
Berriman said RealVC will look to lead the rounds in which it invests, with typical check sizes between $1 million and $3 million.
Although it has become a cliché for a venture capital fund to describe itself as a founder friend, Berryman said the introduction of “backed capital” was a real point of difference for his new fund.
He said that he and his partners have all been keen to take on very active roles in the companies they support, and have learned from personal experience how unfavorable terms and investor behavior can hurt a startup’s performance.
“I know there are many funds that have had founders as general partners or managing partners, but they aren’t really recent founders, and a big part of doing that for me is connecting with the founders that I’ve been in,” Berryman said.
“The founders will see the significant growth trajectory that you’ve been through and then the general end that happened through what happened with Google, so there’s a level of empathy there.
“We have very experienced and successful investors here, and we will tell the founders that we support them that we will be there for them through the good and the bad, and that if their company goes to zero, which is what happens in the initial investment phase, we will not abandon them or start trying to get our money back aggressively.”
RealVC will target investments in companies in a number of areas that match the expertise of the people involved in the fund. Therefore, this will include programs as start-up service companies and companies specializing in health technology, media, and proptech.
With valuations across the startup sector down from last year, most Especially in CanvaThere is better value in the market now for investors, Mr. Berriman said.
Last year, he said, investors ran off and bought at valuation multiples that outpaced common sense.
“That’s why we didn’t launch the fund at the end of last year, we were late to wait for the market to change,” Berryman said.
“I was looking back to my Unlocked days, and we were growing hundreds of percent year over year With $20 million ARR (Annual Recurring Revenue), and we were getting ten times the revenue. But there are companies that have recently been getting 200 times revenue multiples of a lower rate of return…I think they’ve become very overheated.”