TPN 2 Web Crew panel had some interesting points to talk about...
As an Entrepreneur during Web 1 and Web 2 waves, as well as having spent the most part of 2007 living in Silicon Valley and have angel invested in both Australian and US start ups, I have a few opinions of my own...
1. In comparison to the Silicon Valley climate, yes there is a "perceived" drought in Australia of Angel funding.
2. Why? There is a discrepancy between the mind set of the entrepreneur of instant riches likened to lotto and the conservatism of angel investors and private equity.
3. Centralization is about all Aussie Web 2.0ers not fragmenting us as a network, but focusing on what we do well and collaborating together. Just like the Entrepreneurs' Organisation I had the opportunity to be apart of for a number of years, could easily be modeled off
4. Silicon Valley is a club and a hub. It reminds me of Hollywood, we only hear of the exciting claims to fame, but rarely hear of the battles and losses.
I say a "perceived" drought. Maybe I need to expose just how start ups could raise cash. I have lived in the heart of Silicon Valley and have personally angel invested in both Australian and US Web 2.0 start ups. I must admit there is a huge difference in mentalities of a US Entrepreneur and an Australian one. Clay and I always talked about what Duncan was talking about $10k comp to fund ideas, but I have never heard of a US Silicon Valley VC or Angel investor giving the cash out without some stake in the idea. If anything it is more about "what's in it for me" in the US in terms of being an investor.
Clay and I are an example of handing over cheques way over $10k to two Australian start ups, without a blink of an eye lid and the two start ups we "just" handed money to are the ones that are really struggling.
We also can't forget that yes there is money being pumped into funds that Sequioa manages, Azure Capital and the like do the same, they just have harder targets to meet in a smaller market environment. Aussie start ups need to know the economies of where this money comes from and what returns the VC and angel investor are also being expected of.
Sure, go to the US and you may have a higher chance of being funded, but I think we fail to mention just how much competition there is in the Valley. I don't think anyone realizes just how many wannabes are there and how much of an opportunity it is in Australia to not have this fierce competition.