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Investing in Startups has potential to pay off for all

Investing in Startups has potential to pay off for all

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Potential investors can now gain world class insight on how to support and contribute to a vibrant, innovative ecosystem of high-growth businesses in Townsville, thanks to the upcoming Investors Evening on Thursday, 26th November. 

Smart Precinct North Queensland, Business and Investment Lead, Lydia Canovas, is curating the event, and says education within the sector is crucial to minimise risk and enable an early-stage business to succeed. 

“There are many considerations that are important for investors to understand before investing in this type of business,” explains Lydia, who is a Doctor in Economics and Business Management, specialised in accelerators, startups and investment operations. 

“The Investors Evening is about ensuring people are aware of the existing investment mechanisms, aware of how the entire process of investing in high-growth businesses at an early stage works before they put money into a particular business, all the while giving them the tools to make wiser decisions depending on their investment capability, risk, and expectations.”

Originally from Valencia, Spain, Lydia has an extensive career that spans over 10 years, working with startups and investors in Europe and now Australia. 

“Ten years ago, I co-founded an investment fund with a Spanish Seed Accelerator to gather investors at a local level who were traditionally investing in more conservative industries, such as property, transport, farming, or construction,” she explains. 

 “Local investors showed a great interest in investing in scalable businesses following the example of what other countries were successfully doing for years prior.” 

“That gave us the opportunity to gather investors from all around Spain and Europe to join the fund in a crowdfunding basis so they could support local businesses with small amounts.”

“After investing myself in several industries, I sold some of my investment positions to a venture capital fund and started travelling around the world acting on a consulting basis for investors and entrepreneurs, before coming to Townsville in January 2020 with my Australian husband and son.” 

The Investors Evening event will be held at Smart Precinct NQ and is for those interested in learning more about investing in startups with high-growth potential. Off the back of recent success stories like SafetyCulture’s unicorn status, and JESI’s recent $4.5 million raise, Lydia says there has never been a better time to consider investment in the startup space. 

“This event is for people interested in supporting high-growth businesses in North Queensland, with the capability to invest from as little as $50 to $100,000 or more,” continues Lydia. 

“Local investors will learn in this session how to invest in high-growth Australian businesses at an early stage, the due diligence process, average investment ticket, the mechanisms available, risks and interests, and what options will best fit their investment capability.”

The Investors Evening will include three guest speakers, each of which will represent the three key existing investment mechanisms for investors of start-ups in North Queensland at Seed-funding stage. 

The line-up includes Matt Vitale, co-founder of Australia’s popular equity crowdfunding platform Birchal, Donna Patane, co-founder of FNQ Angels, a business angel group based in Cairns, and Brad Stewart, a well-known local investor founder of Townsville’s very own Evolution Financial. 

“The three expert guest speakers represent investors at national and local level, and will talk about their experience in this industry, how to invest in high-growth Australian businesses at early stage, what to expect, what options will best fit their investment capability, and the risk and expected returns of investment,” says Lydia. 

“Local investors will also have the opportunity to chat with our guest speakers after the presentations.”

Guest Speaker, Donna Patane, reinforces the important role Angel investment plays in ensuring startups have access to the capital required to embrace each stage of development. 

“Angel investment plays an important role in the start-up scene.” 

“It bridges the gap between ‘FFF’ (friends, family, fools) money and more advanced venture capital money or series raises where investors are looking for larger marketplace traction and registered IP. 

“For regional startups, angels act not only as investors but also as mentors, connectors and cheerleaders.” 

Donna Patane, co-founder of FNQ Angels

Despite the effects of the global pandemic, startup investment in Australia hit new highs over the first six months of 2020, according to KPMG’s Venture Pulse Report. Lydia says private investments are the key to supporting the region’s best talent and ensuring the local economy can reach its full potential, especially during these uncertain times. 

“Startups are young companies that are trying to solve an existing problem in the market using an innovative product or service,” she continues. 

“One of the main problems that startups have at an early stage, particularly in North Queensland, is the access to the capital necessary to invest in key resources and assets that can help the company reducing its structural costs and benefiting from economies of scale, to be able to access to national and international markets faster.

“Having access to funding at a crucial growing stage can ensure the long-term survival of innovative companies and their success raising future investment rounds, bringing large investment returns to initial investors, and indirectly contributing to the local economy of the region where they are located.” 

While this type of investment can be high risk, Lydia says that is important to diversify and highlights how it has the potential to provide investors with a higher and quicker return compared to traditional investments. 

“You find more operational investors that are focused on low risk investment, investing in property and agriculture farming, particularly in the regional areas,” continues Lydia. 

“While private investment is high risk, it is more focused on how people can invest $100,000 in several businesses to reduce risk and multiply their return of investment three times over five years and nine times over 10 years, needing just one successful case.”

“Private investment isn’t intended to replace operational investment, but rather it’s about making potential investors aware that you can invest more locally to support the economy and play a role in guaranteeing the future of your city is bright and is integrated with technology and innovation.” 

To register your interest to attend The North Queensland Investors Event on Thursday 26 November, 5.30pm – 7.30pm, at Smart Precinct NQ, email lydia@spnq.org

By Georgie Desailly

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