Freshly-minted seed fund and accelerator Galileo Ventures has plans to raise a $20 million early stage venture capital fund (ESVCLP) targeting student entrepreneurs graduating from university looking to establish new businesses.
According to Galileo Venture co-founder James Alexander, the ESVCLP structure has two benefits: it signals to potential startups the firm has enough resources for long-term sustainability, and it’s a model that investors are familiar with and are more likely to invest in.
“It’s a proven model in Australia, and the current legislation around it has been proven and tested before. There are a lot of ventures operating on it,” he said.
“I wouldn’t say the legislation is perfect. I know there are quite a few VCs that would like various specific details changed, but overall we wanted something people were familiar with.”
In order to be successful for the ESVCLP, the federal government has set an initial condition that firms must raise a minimum fund size of $10 million, something which Mr Alexander said Galileo Ventures is working towards.
Provided the funds are successfully raised, Mr Alexander said Galileo would expect to invest in 60 Australian and New Zealand startups over the next three years.
Galileo also plans to provide its startups with access to a six-month accelerator program with a focus on management and governance training.
“Some of the things people take for granted is that some [young entrepreneurs] haven’t worked in a full-time position before, even though they’re the CEO of their company,” Mr Alexander said.
“So supporting them would have to mean that you can’t assume they have the knowledge of operating a basic workplace. They might have come from industry or they might be straight out from uni.”
While the program would lean on partnering universities from Australia and New Zealand to find these startups, Galileo will also look at international student entrepreneurs for talent.
“There’s absolutely a possibility that we will invest in international students who are looking to apply for a startup visa,” Mr Alexander said.
He points to how during his time at the University of Sydney Union’s startup program INCUBATE there were “a lot of participants who were international students in various programs”.
“We see [international students] that would like to stay in Australia and build their ventures as a source of good entrepreneurial talent, and hopefully it will create jobs here.”
Mr Alexander adds investing into international students will complement Galileo’s future plans to take the firm internationally.
“Australia is very much our first iteration and Asia for us is very attractive.”