Andrew came to share his observations on venture capital. He works at an investment company. Before that, he was a founder of a company that sold spatulas. Andrew had difficulties raising funds as a founder. Now that he is on the investment side, he knows what to share with ecommerce businesses.

His first observation was that there is a lot of money to be deployed. When Andrew was a founder, he thought the opposite. Some investors have the money to invest. Andrew shared a term called ‘allocation’. In simple words, investors have to fight over the right to invest in a company. They need to deploy a certain amount of money.

Andrew said there are many tier two funds all around the country. They will come out in the results if you do a google search. There are two in Perth. BetterLabs Venture and Upswell Venture.

He also mentioned family offices. According to Andrew, they have a fair amount of money to invest. Some family offices invest in a venture style investment. If you cannot find venture capital, family offices are another choice.

Andrew’s second observation was that companies have to be investible. ‘Investible’ can mean how easy it is to find your company. Andrew had heard several pitches before. He found that most people buy into their own stories. However, sometimes some stories stand out. Andrew claimed that businesses that gained much traction are hard to hide.

He gave a brief example of a business that can pique an investor’s interest. This business not only has its platform but raised $30,000 per month in revenue. They even have 100,000 subscribers on YouTube. That is a starting point.

Andrew shared his thoughts on what Perth companies lack for investment. They fail to make a reference point to similar but bigger companies. Andrew said there are times when he sees this during pitches. One company present their pitch. Next week, he sees another similar one. However, they show more traction or something special in his eyes.

His third observation was that the process matters a lot. Andrew said many companies think they can get funds once they are ready. However, it does not work like this. Andrew used an analogy to explain the process of venture capital. Your business is a wave. Investors are the surfers. You have to be far away and show that you will be a high wave. Investors will look from afar and think, “That will be a good high wave.” As you get closer, you build up and gain momentum. Once you are at a certain height and distance, that is when the investors will paddle and surf.

Andrew’s fourth observation was that companies have to have a hook. It is similar to his second observation. Your business needs to have something unique. Investors will have different standards for uniqueness.

The fifth observation was that less compelling stories require great metrics. Andrew said no stories are compelling without great metrics. Even compelling stories have great metrics. He then raised some examples of metrics for ecommerce businesses to show to investors.

• Cost of customer acquisition
• Customer lifetime value
• Unit economics
• Growth rate, and so on.

He also mentioned that you need to know every figure in your ecommerce business. Andrew shared what he heard from other investors. “You know the businesses that we want to invest in that make it? They’ve just got a certain something. They’ve got an air of professionalism, an air of class.” Andrew said it is because the people running the business understands their business. They have researched their market and competitors.

Andrew’s last observation was that momentum is a must. Whether it is momentum by revenue or media, you need to show that your business is the upcoming trend. Andrew also mentioned that momentum investing is a trend that is doing well within the startup space. However, you have to make sure to plan the investment. Six months prior is an ideal timeframe.

Lastly, Andrew pointed out the significance of finding the right investors. For example, if you are an ecommerce company and the investor you are looking at is interested in deep technology, they likely won’t invest. Also, don’t restrict your choices to venture capital. Angel investors and family offices are also reliable sources of investment. Just make sure to do your research.