Ecommerce Experience VII

Ecommerce with Business Advisory

With Tristan Senycia Digital Business Advisor at Business Station Inc.

Ecommerce Experience VII

Ecommerce with

Business Advisory

With Tristan Senycia Digital Business Advisor at Business Station Inc.

Text Version

Tristan started his talk by explaining how ventures work. First, the centre of a venture is usually a unique product, process or service. Ecommerce businesses would centre around the first one. To commercialise, you would need to build many other venture infrastructures. According to Tristan, venture capitalists/accelerators can help by providing capital and advisory support.

Tristan said there are various accelerators, but they all take a similar approach. Before embarking on any acceleration processes, he recommended properly researching the people (advisors) behind the programs. If they are experienced or have great connections, they can help create a pipeline of investors for your business.

Advisors can join your team temporarily or permanently. They can participate as a board advisor to help shape your venture. Or, they can join the executive team to help make your ecommerce business more investable.

Tristan then proceeded to explain the accelerator ecosystem in Australia. He also compares it with the U.K. According to him, Australia is gradually growing in this area. However, it will still take time to reach the level in the U.K. He suggested broadening your choices if you cannot find venture capital locally.

Next was about the sources of early-stage venture capital. At the start, it is typical to raise from the people that know, like and trust you. They’ve known you for long enough to want to help you. Your friends or family are common examples.
The next stage would be accelerators, who can help bridge you to the next stage of investment readiness. Accelerators are interesting as they can get their funds from a variety of sources. The list includes corporates, angel investors, the government and the lottery.
Instead of accelerators, you can also get investment directly from angel investors/syndicates. However, the percentage of ventures that get invested from this source is only the ones in the top 1%.
Venture capitals are also highly rare. Only the top 0.05% of ventures get invested from venture capital. Both angel syndicates and venture capitals require proof of high growth potential from your business.
Another choice is family offices. They prefer lower and stable growth in a business. This means they are more likely to invest in industries they understand. According to Tristan, family offices in Western Australia tend to invest in the mining and oil sector.
The last alternative is grants and public tenders. If what your business is doing aligns with their interest, they can provide millions of dollars to help achieve it.

Once you got some capital, how should you deploy it efficiently? Tristan suggested searching for startup advice. He recommended some options that are cost-efficient for startups.
First on the list was Ad-Hoc Advisory. One of their investors would come for a one or two-hour advisory session. You will usually get charged by the hour. They can provide both general and specialised advice. You can also get some advice for free through the Australian Small Business Advisory Services Program.
Next was coaching. Coaches provide ongoing general advice. The benefit of this is that they will continue to stay beside your growing business to help further accelerate the growth.
Non-executive directors were next. They might take a lesser fee due to subsidisation. However, they may require options to spread the risk and reward of the venture. One of the main benefits of having a non-executive director is that they can add credibility to your team.
Lastly, there is fee-for-service and consultancy. Tristan recommended minimising advice from this one as it can be expensive.

Next, Tristan showed a graph called the Valley of Death. It showed the flow of ventures going from loss to profit. He said that going through an accelerator program can help reduce loss and shorten your time in debt.

Lastly, Tristan showed the main reasons why a venture fails. The top reasons included “ran out of cash” and “not the right team”. Tristan emphasised how crucial it is to find the right advisor to work with.

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