The Venture

The Venture

Impact Investing, Australian Companies in the Spotlight (CaptixBio)

The trend of ‘Impact Investing’ has been on the rise over the last few years and it’s easy to see why. By using capital for good, savvy investors are looking to create real positive change and witness lasting impression that are fueled by their investment. Whether it’s funding environmental or social causes or even medical breakthroughs, the idea is to create an ongoing impact coupled with a financial return.

Offering a unique way for backers to provide capital for causes they believe in, impact investing is currently attracting a wide variety of interest from both individual and institutional investors aiming to address the world’s most pressing challenges.

In a health technology market such as Australia’s, where multi-billion corporate giants such as ResMed and Cochlear dominate the investment conversation, it is easy to forget that they too were founded by clinicians and scientists seeking to make the world a better place. Early investors in these “for purpose, for profit” companies were truly “impact” investors, those seeking to do good things, providing patient capital to support research and development, but also expecting a return in the end.

Whether it truly impacts investing, where the definition still seems to be a little grey or investing with impact, investing in “for purpose” companies and technologies with the intent to change the world is on an upward trajectory. As of mid-last year, it is estimated impact investments made up $715B USD* across the globe, further highlighting the increasing amount of success stories coming out of this space.

One company aiming to create an impact in the biotech space is Captix Biomedical (Captixbio), an Australian biotech start-up on a mission to develop a unique treatment system to cure Type 1 diabetes (T1D). To do this, the company is developing a cross-disciplinary, implantable solution to enable long-term, life-enhancing outcomes from cell therapies, thereby removing the daily burden of insulin administration and the fear of maintaining glucose control.

Captixbio is unashamedly a “for purpose, for profit” company. Founded in 2018 by Dr Michael McAuliffe, frustrated by the lack of options available for his own daughter when she was diagnosed with T1D, he has led the organisation as Founder and Chairman and actively encouraged the strategy of identifying and integrating the best science in Australia to deliver a novel solution to this intractable disease.

At the forefront of this project is Captixbio’s IMITA technology, which leverages an innovative combination of a medical device with a unique, immuno-protective, polymer membrane and cell and tissue technologies to deliver a functioning, protected cells into the body. The technology aims to deliver glucose control using donor islets or islet-like cells transported via an immuno-protective delivery device – a “bio-artificial” pancreas – called IMITA. IMITA is designed to sit within the protected, and highly vascular cavity, within the femur, ensuring longevity and functionality.

The company has collaborated with some of the most prolific scientific organisations in Australia to create the new piece of tech, including the CSIRO, St Vincent’s Institute of Medical Research, The University of Sydney and Queensland University of Technology.

Captixbio Founder and CEO, Helen Wray, says huge ground has been made since the company’s inception nearly three years ago, stating that there is still plenty more to come.

“We’ve had continued success since the company’s inception in 2018, receiving various amounts of funding from private investors and other sources, often with a link to T1D, as well as grant support and unquantifiable in-kind support from our amazing research partners. We have continued to progress our research on multiple fronts, and we would not be in the position that we are in today without our project collaborators – being able to work alongside some of the brightest minds in the country in an effort to achieve a cure for Type 1 diabetes isn’t something we take for granted and we look forward to sharing more project updates as they come to hand throughout the year.”

Throughout the rest of 2021, Captixbio is looking to optimise the manufacture and assembly of the IMITA® implant and its components and also progress its pre-clinical study program.

* June 11, 2020, the GIIN published the 2020 ANNUAL IMPACT INVESTOR SURVEY, which includes an updated market sizing analysis, which estimates the current market size at USD 715 billion.

Speaking to Investors at the Behest of Ancient Instruction

Businesses are built on ideas, and these ideas, if represented poorly, can spiral into silence marked by the ‘investor pass over’. This phenomenon becomes disconcerting when one realises the solution to engaging investors is not only dependent of the founder’s logical reasoning but rather is dependent on the founder’s methods of persuasion. The untold deaths of good ideas that have succumbed to poor powers of persuasion is too regular an occurrence to ignore. Although we are encompassed by a multitude of ‘communication experts, sales mentors and marketing gurus’ who claim to have the answers, deeper research reveals the cornerstone of communicative arts trace back to the philosophers of Ancient Greece.

Ineffective communication, a serial killer of good ideas…

Before our historical retrieval, I want to relay what I’ve deduced firsthand in dealing with startups raising capital amongst a variety of sectors and stages. After witnessing founders hit center – stage with nothing more than a pitch – deck and an idea, you come to realise that in order to raise capital, you must hit these 3 benchmarks:

  1. Commercial viability
  2. Access to relevant investors
  3. Effective communication

The first is a matter for the founder, and the founder alone, they must build their thesis on science and reason to demonstrate both the technical and commercial viability of their venture.

The second is a matter of network as well as reach, persistence and budget.

The third, effective communication, is a pillar by which individuals can improve upon by simply heightening their level of audience awareness and reviewing the fundamentals of persuasion we so often forget.

There is no form of injustice quite like that of a good idea undergoing death by way of miscommunication. Research has demonstrated the consequences of this effect at the highest levels of commerce with the Holmes Report (A newsletter by the PR Media conglomerate) releasing the revelatory statistic that over a 5-year period, companies led by effective communicators had 47% higher total returns to shareholders
compared to those led by those with poor communication skills.

Communication between an investor and founder is a contention of opposing views, not small talk, and pleasantries…

Communication is a broad term, encompassing several disciplines. We must therefore identify the discipline most prevalent in communication between investors and founders during a capital raise. The answer – discourse.

If we can look beyond the belligerent nature of the term “discourse”, plainly put, it is the communicative act of exchanging viewpoints and ideas with the ultimate goal of arriving at an agreed upon truth between two parties.

The dynamic between investors and founders often takes this form, with the founder having built a well thought out argument based on knowledge and logic and the investor needing to be convinced of the idea’s commercial viability, culminating to a transaction (truth) that both parties agree upon.

In order to master the art of discourse, or at least begin the journey to mastery, we’ll first need to understand its history, there we’ll find those who unveiled the key elements of discourse, and therefore learn from the rightful authorities on the topic.

Discourse as an art…

The art of discourse was first taught in Ancient Greece as the convergence of the following three skills:

Grammar – the mechanics of language, using symbols to express thought.

Logic – the mechanics of thought analysis and composition of arguments.

Rhetoric – the mechanics of communicating thoughts from one mind to another.

When it comes to grammar, most of us already display competence as modern education empowers us with fluency in both the verbal and written communicative symbols – the English language. Logic, the ability to form an argument and the process by which we acquire knowledge is also a component that modern presenters are well versed in. It’s the use of rhetoric (the art of persuasive speaking or writing) that is often overlooked.

The topic of rhetoric was the subject of much debate. Its use was controversial but its utility in persuasion is undoubtedly effective. Aristotle, a major proponent of rhetoric, outlined the composition of the art form via his famous collection of thoughts ‘The Art of Rhetoric’.

This self–help book on persuasion dated back to 4th century BC. In simple terms, the philosopher divided rhetoric into 3 distinct modes of persuasion – logos (logical reasoning), ethos (establishment of credibility), and pathos (understanding of emotions). Persuasion, according to The Art of Rhetoric does not depend on one of these elements, but rather the careful balance of all three, a principle we often abandon.

“There are, then, these three means of effecting persuasion. The man who is to be in command of them must, it is clear, be able (1) to reason logically, (2) to understand human character and goodness in their various forms, and (3) to understand the emotions”

What fascinates me is that 2000+ years later science confirmed the philosopher’s observations

1. A multitude of studies were conducted in the field of “decision theory”  which undoubtedly demonstrates that emotion is in fact the dominant drive in decision making.

2. The infamous Milgram experiment shocked the world into understanding the power of “Obedience to Authority”

 

And…

3. Cognitive scientific research has demonstrated the power of logical reasoning and its utility in justifying our beliefs and actions to others.

So, with philosophy and science in agreement on the need to fortify these three pillars of persuasion:

Why do we still remain ignorant?

Why do so many presentations fall short?

Why is the truth lost as a consequence?

The reality is, for many of us, the components of rhetoric such as invoking emotion, establishing credibility, and the demonstration of logic, are complex instruments of persuasion. Subsequently, presenters often overcompensate on one of these modes and underutilise another. Some depend on logic alone, with the notion that talking with reason is enough, on the opposite end others present with too much emotion
and lack both depth and substance. Luckily, Aristotle realised this, and in turn, worked to delineate the three modes to a level that any individual could grasp.

“Rhetoric was a teachable skill, that it could, usually in return for a fee, be passed from one skilled performer on to others, who might thereby achieve successes in their practical life that would otherwise have eluded them.” – Aristotle, The Art of Rhetoric

 

Although facts matter, a persuasive argument is not just a matter of facts…

As mentioned, Aristotle distills rhetoric, the ability to persuade, down to three ‘modes of persuasion’ – Logos, Pathos and Ethos, with a relationship best

represented by a triangular interdependence, now commonly referred to as the rhetorical triangle. What we’ll aim to achieve in the coming section is to translate these modes of persuasion into modern terms, and from there provide techniques that you can employ in order to fortify each one.

Starting with Ethos, an element that conveys the fundamental need to build a platform of authority /credibility before undertaking the act of persuasion. The utility of this device lies in its ability to ensure the mind of the audience is open to receiving the forthcoming communication from the orator/writer.

Breaking down this mode of persuasion further we see a composition of three building blocks, authority, credibility and trust. All of which, if the right techniques are employed, correctly form the Ethos of the speaker. The techniques mentioned include the following:

  • Illustrating the level of knowledge/awareness one has of the topic at hand, can be achieved by exhibiting your consideration of multiple viewpoints, sources of information and expertise when forming a thesis.
  • Demonstrate your mastery, which is usually best achieved by outlining the pathway of acquisition for said knowledge – your experience.

AirBnB ensuring the audience was fully aware of the depth of experience and commercial acumen the team had. Signifying two things:

  1. The expertise to grow
  2. The ability to attract top talent

Next is Pathos, employing the aforementioned powers of emotion. Achieving pathos is a matter of drawing empathy from your audience by appealing to their values, emotions and imaginations.

“Understand emotions – that is to name them and describe them, to know their causes and the way in which they are excited” – Aristotle, The Art of Rhetoric

Expansive research has demonstrated the power of both positive and negative emotions when forming the mental framework used to make a decision. Despite its obvious utility, the use of emotions is often overlooked, it’s often not in the nature of the presenter to invoke such emotions, and even if there was a will to do so, the execution is often marked with deliberation and a lack of subtlety.

So, how do we intersperse Pathos throughout a presentation, with subtlety?

  • Storytelling – The audience want to know that the presenter has perhaps entered the unknown, overcome challenges and returned with a new piece of information – a hero’s journey. This is best achieved in the business world by describing how one stumbles upon a problem and worked to find the solution, or, outlining the severity of the problem, its consequences and how they relate to the audience.
  • Descriptive use of language – Descriptive language involves the use of adjectives, adverbs, similes and metaphors that add an element of prose to your writing/speech. Note, it should be used with caution, and only to illustrate the imaginations of your audience or to add colour to a sentiment you are trying to convey.
  • Humour – Humour has the ability to invoke instantaneous positive emotion amongst an audience, but exercise it with caution. In other words, test the joke, it may not be funny and a joke followed by a feeling of awkwardness may be antithetical in the result.
  • MDA’s – This is a personal favorite of mine and definitely an under utilised practice. MDA, an acronym for minor damaging admissions, honesty, with the intent of minor dents in the hubris of the presenter. This works extremely well in building trust, and shows the audience you are honest enough to admit faults. This is best achieved in a presentation by detailing risks associated with your venture, BUT following on with mitigations you’ve taken to offset said risks.

With research leaning towards the conclusion that we tend to make decisions on the heels of horror, it can be expected to be exploited. However, sometimes problems that boast enough severity justify the incitement of fear – just make sure you, the bearer of bad news, also holds the key to the solution…

A business leader who does this best is Elon Musk, who despite his engineering mindset, and enigmatic ways, often arouses the emotions of the audience by exuding passion, inciting fear and offering a way out:

Elon Musk’s Emotional and Inspiring Speech at SXSW (2018)

 

Persuasion built on the truth will always trump persuasion built on emptiness. The key, therefore, is to firstly appear at the truth via unbiased investigation. From there, illustrate the path to the knowledge you have paved for the audience you wish to persuade. That way they can also arrive at your conclusion using a combination of the crumb trail you’ve left and their own powers of logical deduction. This is employing
the rhetorical tool of logos.

Bearing in mind, your audience in the capital raising arena, investors, are fundamentally rational people…which techniques can one employ in an effort to deliver the substance investors crave throughout your message?

  • Studies – The use of research, citing scientific studies which demonstrate evidence behind a theory. For example, as an individual building a software platform for the mitigation of time and cost overruns, you may want to present case – studies which show, in numbers, the effect of said software.
  • Historical Evidence – When exhibiting the problem, you are looking to solve, an effective way of conveying its severity is by presenting news articles of days past related to the issue at hand. This not only shows the issue’s authenticity, it also shows it was newsworthy and therefore relevant to many.
  • Easy–to–follow Rationality – Despite my lack of a better term, I was obliged to add this in. Referring to the presentation of your business plan. The best example of this would be a justification of numbers. For example, not only outlining what your venture expects to generate (revenue) over the next 12 months, but also adding substance by delineating the milestones you are looking to achieve in order to attain those numbers. In doing so, what seems to be ‘empty speak’ or ‘purely speculative’ is fortified with reasonable and value–adding actions.
  • Statistics – Whether it be in the form of market potential or the efficacy of a new vaccine, data represented by numbers is always an effective way to establish concrete understanding.

Three distinct divisions of persuasion, the culmination of which construct an indominable framework for any argument, and a well – worn path to success in discourse. The philosopher encouraged all to learn these fundamentals of persuasion, and noted that a lack of rhetorical knowledge could lead to missed opportunities, with affirmation.

An athletic mind to sharpen the tongue…

Aristotle wrote this treatise after careful observation of the techniques used by those present and past to himself, which indicates that we may be inherently persuasive when it’s called upon. What this great mind achieved via The Art of Rhetoric was a well-articulated prescription to keep us on track, much like an athlete can fall out of form, so too can we, by way of brevity or laziness diverge towards our duller forms of communication.

So, whether it be a team meeting, an announcement to your shareholders, or our main concern, raising capital from investors, as founders you should remain cognizant of these more effective tools of persuasion and presentation.

As trailblazers in your respective industries, your duty transcends the success of your product/service, it entails a responsibility to construct the knowledge and encourage the admiration of your invention from outsiders. Ensure the elements of persuasion are interspersed throughout your communications, and you may begin to find that there are more willing participants in your journey than once assumed.

From Engineer to Entrepreneur, Insights from a Founder Entering True Uncertainty in the Realm of Deep – Tech

Every project brings with it a certain level of unpredictability. However, this is amplified when the core of the project involves technology that is not only new to the consumers but also the creators.

Biomedical engineering has, and will continue to, transform the lives of individuals with impaired mobility. This particular area of BioTech is positioned as one of the more invigorating disciplines contributing to the future of engineering, yet it lays victim to an intense level of ambiguity in the commercial world due to the technology’s infantile nature.

Puya Abolfathi is a trailblazer in this area of innovation. Kinobionic, developed by Abolfathi, creates bionic gloves designed to return movement and function to paralysed hands. This is achieved via communication between the technology and the user’s thoughts. The project is expanding the limits of what was thought to be possible and diving headfirst into a field of true uncertainty.

The ability to have your foot firmly planted within the realms of both engineering and entrepreneurialism is a key component of Abolfathi’s success. Murray Hunter, an author, and successful founder reveals that this skill might be essential for progress, particularly in the modern world (2011).

We are witnessing a shift in how society operates, from independence to interdependence. Most individuals think in a way that mimics the Newtonian paradigm; that is where objects are tangible, definable, solid, and where interaction with other objects was of secondary importance. Career paths mirror this as people focus on perfection within one skill, such as engineering, instead of aspiring to be a polymath.

Hunter refers to the importance of personal mastery – the ability to “integrate intuition and reason” (2011) due to competency in many fields. Personal mastery is achieved via a set of principles and practices – a key principle being, “One must develop a sense of vision, ‘a big picture’ of what they want out of life”, if they wish to remain motivated in their endeavour. Similar to the famous Nietzche quote, “He who has a why to live, can bear almost any how”. If you engage with a motive that is deeper than monetary success, a broader set of skills will naturally evolve. Thus, the two work in a symbiotic way.

Such knowledge leads to the second piece of insight Abolfathi provides.

“I think it is super important to have a North Star to guide you in your venture.”

The nature of transitioning from a stable corporate job to a start-up is incredibly tumultuous. It could lead to the inclination to overwhelm yourself with the work and eventually lose the passion that fueled the inception of the project.

Puya stresses the importance of setting time boundaries around your work to prevent burnout and excessive stress. However, a strong vision and passion for humanity keep him aligned with the goals he set out to achieve, and are a huge motivator in ensuring he doesn’t participate in behavior that could potentially stunt the business.

For Abolfathi, the transition from a reliable engineering career into the entrepreneurial journey marked with true uncertainty was made easier by the motives remaining consistent in each field.

“I became an entrepreneur for the same reason I became an engineer. There is considerable overlap for me around both identities. Both are about bringing new and better solutions to the world’s problems and potentials.”

He views his work as a tool to advance society by leveling the playing field for all. It is the technology that allows people to reach their full potential and give access to abilities that most people take for granted.

Huge levels of empathy are evident in the way Abolfathi navigates his work. Despite this, it can be too easy to get caught up in the prototypes and forget about the people this product will impact most – the consumers.

Show genuine curiosity to your market…

His advice for anyone entering the field of biotechnology is to talk candidly with the hypothesized customers prior to diving into  prototypes. Ask them questions regarding their real – life experience, so you can see not only where a gap in the market lies, but also how you can shape your product in a way that benefits that community the most.

Before building any tech, Kinobionic communicated with individuals living with paralysis in the USA and Australia via Zoom. Instead of telling the potential customers what they think they need, they provided a channel where people could communicate the daily challenges they face.

This is rewarding on a personal level and also accelerates progress as time isn’t wasted on ideas that have no clutch in the real world. Puya also touched on the need for an open mind, the willingness to have your initial opinions challenged, and to allow discourse to occur…

“What we found was that actually when people get that you are genuinely trying to be helpful (as opposed to selling them something), they love to tell you about their challenges, hopes and fears. Importantly, we were open to our hypotheses being proved wrong.

Communication doesn’t have to end with the direct consumers, contact with all stakeholders is incredibly beneficial to create a well-rounded picture of where the product will have the most reach in the commercial world.

Where is KinoBionic now?

To – date KinoBionic has developed their prototypes to test with their users. The team is still small, and the focus is on technology bearing in mind the need to keep stakeholders informed.

Over the next 24 months they expect to have their first product ready for pilot trials, the regulatory framework mapped out and the IP stack secured and market validated.

Enough text, the amazing work being done can be summed up in the video below of Puya testing the exoflex with Damian:

 

Thank you to our contributor:

Puya Abolfathi –  LinkedIn Profile  Website: KinoBionic
Puya is an avid believer in making change through a ground-up approach, breaking down a problem into its fundamental atoms and revisiting ‘knowledge’ around its issues. He is the founder of KinoBionics an Australian Startup developing and commercialising wearable technologies to help people with paralysis regain control of impaired function.

Deep tech start-up funding: Learnings from running the investor gauntlet

In February of last year, I attended the Materials Research Exchange 2020 conference in London. I was blown away by the innovations in advanced materials that people were producing and their potential to revolutionise our lives. Yet, as I spoke to more and more innovators, I heard the same refrain: that a lack of funding was holding them back from taking their trailblazing products mainstream.

It’s what is commonly known as the Valley of Death in materials science: you have a working and fully tested prototype (your MVP) into which years of planning, research, production, and work was dedicated, and you’re ready to scale up, but you can’t do that without funds.

Advanced materials fall into the broader category of “hard” or “deep” tech. At its most basic, a technology that is not an app and which is typically defined by its potential for having a huge impact, but also having a larger risk profile due to longer timelines to industrialisation and higher funding requirements to get there. It covers areas like biotech (which has seen a boost in funding due to Covid-19) and quantum computing, among others.

When it comes to deep tech, for someone in the realm of finance, unfamiliar with the space who cannot determine whether your product is better than other innovations in the field, it might seem a hugely risky proposition. It accordingly takes a special kind of investor who is sufficiently interested and appropriately equipped to understand the significance of your innovation, and who is willing to take on the higher risk profile and accept the longer timeframe to returns.

This challenge is particularly apparent in places outside of the US, which leads in terms of volume of investment in these fields (and where it is also arguable universities apply a better model for encouraging, and providing resources for, the innovators they foster to commercialise their creations than in other parts of the world).

So, faced with this higher hurdle, where is a founder to begin?

If you were to read a typical article running through a list of things startups need to consider when pitching to investors – whether it’s about how a VC will make their decision to invest, or how to structure a pitch deck – you might see that it tends to be the same set of rinse and repeat points. Recurring revenue, traction, team, and so on. It’s the same with posts on social media about “the top 3 things investors look at when deciding whether to fund your startup”.

Yet only a handful of those make sense if your value proposition is not an app, but instead an early stage hard tech or deep science innovation. This makes sense in that if you look at what most of the prominent VC funds target (at least here in the UK), their portfolio focuses on “tech” in the sense of software as a service (SaaS) companies. This broad category has dominated the market and likely been amplified by COVID-19 and the need to quickly and effectively facilitate remote working and communications. A way forward is less clear if you’re in a space that is producing a physical product, particularly if that product is at the cutting edge of science, which brings with it a much larger learning curve for the investor.

Everyone is pressed for time, so your slides need to ensure you succeed in getting their attention, but also need to go the extra mile to explain your tech. I have in the past had feedback that our deck “does not go in enough depth to allow people to understand the tech,” and that the slides “have too many words on them and are therefore not sufficiently engaging,” both from the same investor and referring to the same deck. It may sound funny but it is a difficult balance to strike.

There are plenty of resources online already running through the typical slides you need, and arguing for different approaches, and these are worth reviewing to make sure you have the essentials checked off (a quick Google search has you covered, but if you’re lost then check out this one from Blackbird VC which emphasises on telling your story your own way and goes into fundraising process more broadly).

But below I’ve distilled some pointers specifically aimed at pre-revenue hard tech startups. These include personal learnings from discussions over the years with investors from different professional backgrounds and with different focuses. These are not intended to be exhaustive, and it is of course important to remember that each experience in this area will be idiosyncratic more so than it will be for a software startup, and ultimately it’s up to you to determine what is the best way to tell your story.

You need to be great at explaining your technology in a way a layperson can understand

At one of the panel discussions I attended at the conference in February, a panellist was lamenting how difficult it was to explain his innovation to people in the realm of investing. Yet in my view it is on you, the innovator or founder or CEO, to be able to sufficiently distil your product and effectively describe what makes it special. Investors will not (most likely) have specialisations in your field, but they are intelligent people who are actively looking to invest in great ideas and teams, and so you need to get them excited by your story to pass the first hurdle.

  1. Start simple. Take Nanoloom as an example: we make biodegradable fibre using graphene, a new wonder material that is 200 times stronger than steel while being light as a feather at the same time. It can outperform plastics across industries, it doesn’t need specific facilities to biodegrade and it can be cost effective at scale. 

That is an easy-to-understand elevator pitch that immediately highlights key features (biodegradability, product potential, and cost-effectiveness). It does not need to be more complex in your initial MVP statement – the detail can come later.

  1. Strip back the assumed knowledge in what you’re saying. When it comes down to the detail of your tech when you’re speaking to an investor, even if you’re not yourself an expert in the field but part of the company’s business team, you’ve got a much deeper knowledge than your audience. This means you really need to identify and strip back the assumed knowledge in what you’re saying.

 In our example case, we need to explain what graphene is (many people still haven’t heard of it). Ok, but lots of people are making things from “graphene”. So then we also need to differentiate our product and to explain that while it is easy to produce, it is also extremely difficult to apply (because you have to bond it to other materials), and accordingly, our product is better than other graphene products because we don’t just pour the graphene in or spray it on other things – we bond it at pre-polymer synthesis. But then, what on earth does that even mean to someone who has no background in chemistry?

My suggested approach is to explain the why, rather than dwelling on the what or how. Why does it matter that we use graphene? Look at the unique properties it can achieve. Why does it matter how we make it? You can actually better retain the graphene’s properties when you use our method and disperse it evenly. Why wouldn’t the market just go with another sustainable material that’s already out there? The material isn’t limited to one application, its key mechanical properties are superior to plastics and it doesn’t need additional infrastructure (e.g. composting) to biodegrade. This avoids your slides turning into a script or walls of text. The how will be dealt with during the due diligence phase, should you make it that far.

  1. Be bold. There is a similarity between those in academia and in certain disciplines like science or law: the importance placed on evidence that yields a hesitation to give a strong, simple unqualified statement without listing a series of assumptions. Your deck is the hook.

I am not suggesting in any way to stretch the truth about your product, but be bold and clear in what your product can do and why it’s important, and have the data ready to back it up when it’s called for. Do not use fluff or filler words to soften it. Remember, this is what the investor sees before their due diligence exercise, and they won’t get to the due diligence if they’re not interested. “Graphene will be everywhere in five years” (it will, and you don’t want to be the one who misses out), “no one else can do what we do” (they can’t be based on the patents), “our team has unrivalled experience and expertise in all relevant areas” (we do – look at our CVs).

Beyond explaining the tech

Below are some additional key points to be sure you cover in your discussions with investors, as they can set you apart in terms of how attractive your proposition is.

Don’t come across as aspirational

You need to make it clear you have both the product and the application:

  1. Highlight your patent status and how difficult it is to replicate what you do. This sets you clearly apart from the outset and is the first thing outsiders are interested in and it’s not obvious even if what you’re doing is completely new.
  2. Show how much work you’ve completed getting to where you are now if you have a working prototype at the cutting edge of our current technology. It won’t necessarily be immediately obvious that where you are now took years of effort. Nanoloom has a fully tested polymer solution that was years in the making and has already undergone an extraordinary amount of testing (which is great news for would-be investors). This builds confidence that it’s not just aspirational, which is among the biggest fears investors have expressed, but is essentially ‘ready to go’.
  3. Flowing on from that, make it clear (i) the process for scaling (how easy is it to scale production once the funds are in) and (ii) quantify any change in infrastructure that will be needed by third parties for your product to be adopted into the supply chain (or emphasise that none is required).
Be detailed in your projections

You need to do the work upfront to show at a serious level of detail what the expectation is:

  1. You will need to work harder to show convincing financial projections and costings, so make them as detailed as possible. Rather than using an assumed percentage capture of reported market sizes, we opt to use actual production quantities reported by those who would be our customers in our chosen markets, and it can take some digging to find this data.
  2. Make it clear whether or not you can achieve low unit costs at scale or, if not, why someone would pay a premium to switch to your product from what they currently use, or adopt it at all.
  3. Include a detailed timetable showing projected timing to revenue and product roadmap milestones. This shows you’ve thoroughly scoped out the requirements and procedures involved.
Use your competitors

It can be less obvious who your competitors are when you’re doing something at the very cutting edge of technology that can completely disrupt an industry or the way we do things, but you will either be creating a new market or you will have competitors. This is imperative for investors to understand and get comfortable:

  1. When you’re explaining the structure of your business model and how you’ll make revenue, look for examples of others successfully using a similar and well-tested approach, and highlight these for your audience (i.e. show them the ‘well-trodden’ path to success!). For example, one of the markets Nanoloom is looking at in the near- to medium-term is the fashion industry, and there are many sustainable fibre producers whose products are very different to ours and less versatile, but who have managed to work with fashion houses at the top of the chain to integrate their yarns into products and make sales using a successful, proven business model and showing the appetite in the market for innovations in this space.
  2. Paint a clear picture of how your product differentiates itself from (i) existing products that have been around for decades and are widely used and (ii) other innovators’ solutions to the challenges you’re addressing. This may be obvious to you, but it won’t be to someone seeing it for the first time, so make sure to adequately trumpet this.
Team, team, team

For any startup, team is the most crucial criterion for investment. Why? Because it is what lends credibility to your ability to execute, and no matter how much work you put into your projections they are still pre-revenue targets based on publicly available data and not past performance.

Showcase your team and their credentials, and don’t be shy about it. This is a big indicator for investors as to the viability of your business regardless of what your startup does. It is ultimately, more so than your projections, what will help them make a determination about whether you’re worth the bet, and is even more important for a hard tech startup.

For Nanoloom, this is one slide where we are guilty of being a bit text-heavy because it forms the basis of our credibility to someone outside the field and can establish the fact that we have extensive nanotechnology, advanced materials, business, textiles, fashion, startup, and legal experience. It is the key to getting our foot in the door.

And to conclude: please persist

You’ll get a lot of “I am interested but I want you to be further along before I commit” along the way. It is tough finding someone ready to take that initial risk, so take the time to bring them along for the journey and show them why your startup is ‘the one’ – make it worth their while. It can become demoralising receiving anything short of total success – you’re trying to change the world for the better, so why aren’t people willing to take the plunge? But the key to a lot of peoples’ success is persistence.

Ultimately, what would be more disappointing is if we heard any more stories about innovators giving up and moving into other fields because they cannot see a light at the end of the tunnel. Positive market sentiment and the appetite for risk continues to rise as we move towards vaccines for COVID-19, and the right investor will come along. I saw a tweet someone shared with me recently (you may have seen it, it became quite popular), with a similar message imploring people to persist in their endeavours. It highlighted the enormous success that The Queen’s Gambit is currently enjoying, and spoke of the fact that it took the producer, Allan Scott, decades of rewrites and rejections to finally get it aired. So I too would selfishly ask that you persist, and bring your game-changing innovation to the world, for everyone’s benefit.

Mental disorder, an inhibitor or enabler of entrepreneurial success?

I want to make it clear; this article is not your stereotypical pop – psychology thought piece. No unveiling of the “top ten traits needed to be successful”, nor will I be presenting a half–baked theory on “the signs of a great entrepreneur. In speaking with founders daily, at different stages of the business cycle, it has become all too clear that what they respect, above all, is authenticity.
Research has affirmed the predispositions to mental disorders amongst the entrepreneurial community with recent studies (Freeman, 2015) demonstrating entrepreneurs are;
  • 2X more likely to suffer from depression
  • 6X more likely to suffer from ADHD
  • 3X more likely to suffer from substance abuse
  • 10X more likely to suffer from bipolar disorder

With these statistics in mind, the aim of this article is to examine this well-researched psychological phenomenon, and answer the question – does there exist a link between these disorders and the extraordinary ability entrepreneurs often exhibit?

In order to answer this overarching question, we first need to answer the following;

1. What are the common/unique traits amongst entrepreneurs?
2. Are these traits associated with specific cognitive abilities that empower entrepreneurs?
3. Do common mental disorders inhibit or amplify these abilities?

Let’s start with the common ground…

To label entrepreneurs as a purely homogenous group would be remiss of me. A more plausible presumption being that, from our greatest pioneers to our budding founders – there exists a common personality type characterised by unusual courage, persistence, and creativity. This, however, is purely observational, to state this with certitude we will need to turn to science and data.

Personality is defined as the combination of characteristics or qualities that form an individual’s distinctive character.

Delineating one’s personality, according to the general consensus of the scientific community, is best achieved via the Big – 5 model. The Big – 5 model is a multidimensional assessment that measures the traits openness, conscientiousness, extraversion, agreeableness, and neuroticism, via a method commonly referred to as the ‘O.C.E.A.N. test’.

Entrepreneurs have been the subject of these O.C.E.A.N. personality assessments for decades. A 2006 meta-analysis (Zhao and Seibert, 2006) of 23 studies examining the traits of entrepreneurs, spanning over 32 using the O.C.E.A.N test was reviewed.

The findings demonstrated entrepreneurs were;
  • Highest in Openness
  • Similar in Extraversion
  • Lower in Agreeableness
  • Lower in Neuroticism

…when compared to the control group (managers and other professionals).

Another study (Envick and Langford, 2000) which involved the surveying of 218 entrepreneurs and managers reaffirmed the relatively high measurement of trait openness too. These findings forged the now accepted notion that trait openness is the most distinctive personality trait amongst entrepreneurs, and their main differentiator compared to other professional archetypes.

The tendencies of an individual who measures highly in trait openness include; a general appreciation of art, emotion, adventure, unusual ideas, imagination, curiosity, and a variety of experiences.

In order to measure highly for this trait, one would need to have answered “strongly agree” to questions like these;

  • You have excellent ideas
  • You are quick to understand things
  • You use difficult words
  • You enjoy the discussion of abstract ideas

It comes as no surprise that trait openness is so prevalent amongst entrepreneurs. However, the trait utility doesn’t end there. It’s the strong associations this trait alone has that provide insight into what makes entrepreneurs unique and how they actually generate their ideas.

Is trait openness associated with enhanced cognitive abilities that empower entrepreneurship?

Personality traits offer a glimpse into a set of characteristics that lead to patterns of behavior, thoughts, and feelings; cognitive abilities, however, refer to one’s mental aptitude. It’s one thing to be inherently engaged by challenging/novel ideas, it’s a whole other thing to possess the mental faculty to execute upon those ideas and produce something of true value.

So, the question at hand – is trait openness, the one trait shared amongst entrepreneurs, associated with enhanced cognitive abilities – and if so, which ones?

Science seems to think so, and points to one specific cognitive ability, creativity.

American Psychologist, and author of “Wired to Create”, Scott Kaufman has studied trait openness extensively. Kaufman’s research demonstrating that trait openness predicts creativity in nearly all domains of creative activity. His research culminating in the conclusion that “Openness is the single and most consistent personality trait that predicts creative achievement.”

Studies (McCrae, 1987) reaffirm the association of this specific trait with creative ability. Also demonstrating that this one trait entrepreneurs share is the only trait with strong links to creativity via “data that suggests that creativity is particularly related to the personality domain of openness to experience…but not neuroticism, extraversion, agreeableness or conscientiousness.”

For most professionals, the workplace is one of familiarity, operating in a mature market that has proven commercial capability. However, if we were to walk vicariously in the shoes of a founder at the onset of their venture there lies an unrivaled set of challenges such as;

  • The creation of a novel good/service
  • For a market that doesn’t yet exist
  • In a, most – likely, incongruent period of time

To enter the unknown and return with something of value, of course, takes an individual with extraordinary creative ability.

But what is the neurological process behind creative ability?

And, in line with the intention of this article, do common mental disorders inhibit or enhance this cognitive ability?

What is the neurological process behind creativity?

We’ll now circle back to the purpose of this article, for us to answer the question at hand, we must explore creativity in full.

Psychologists define creativity as “the generation of high – quality, original, and elegant solutions to the complex, novel, ill-defined problems” (Mumford, 2012). It’s this notion of creative achievement that served as the catalyst for human progression since the inception of time.

Science has attempted to understand the intricacies of this particular mental process, yet soon came to realise its unending complexities. However, documented evidence has fortified the general consensus that mental processes are associated with complex patterns or networks of activity in the brain. It’s along this line of scientific thought that researchers have been able to at least visualise creativity in real-time, and from that infer the neurological process that takes place.

These networks are commonly referred to as ‘Large – Scale Brain Networks’; a collection of widespread brain regions interacting to perform a particular cognitive function. As fantastical as it may seem, creativity, or, the culmination of creative thoughts, can be traced back to one of these networks known as the ‘Default Mode Network’ (DMN).

The DMN is activated when people are in a wakeful – rest, daydreaming, or mind-wandering state. Research (Beaty et al. 2014) demonstrates that this network, responsible for the unconscious processing of information, is the state of mind creatives are in when in their idea generation mode.

This hypothesis was validated via a series of studies (Kuhn et al. 2014) whereby subjects were asked to take an alternative uses test (testing designed to measure creative thought ability) combined with MRI scans to understand which regions of the brain were most robust. The study demonstrated that there exists a “positive correlation between creative measures and the grey matter volume of the default mode network” – meaning those who scored highly in creativity exhibited heightened processing capabilities within the regions of the DMN.

Do common mental disorders inhibit or enhance the neurological process behind creativity?

The idea that superior creativity may come at a price goes way back to Ancient Greece where Aristotelian tradition viewed creative genius as a human quality that was responsible for both extraordinary achievement and melancholy.

However, an ancient school of thought isn’t the finality we need to link the two, instead, we’ll again turn to science.

The statistics at the start of the article mentioned an entrepreneur’s inclination to suffer from ADHD, Bi-Polar, and Depression. If there was a link to be found, it would be between these disorders and unusual activity within the default mode network.

Dr. Gail Satz, Associate Professor of Psychiatry at the New York Presbyterian Hospital reveals such a link to her recent article. Satz highlights the fact that neuroscience has identified mild – moderately mentally ill people as highly creative due in part to a “faulty switch” causing heightened activity in the default mode network.

Dr. Satz explains that it is this unusual activity in the DMN which occurs in mentally – ill individuals that allow for disinhibition and divergence of thoughts – leading to creative outcomes.

Studies (Whitfield – Gabrieli et al. 2012) specifically aimed at exploring this concept have demonstrated that “In schizophrenia and depression, the DMN is often found to be hyperactivated and hyperconnected.”

More recently, in a 2020 study (Zovetti et al. 2020), the Department of Neurosciences at the University of Verona concluded that “Bi-Polar Disorder patients show hyperconnectivity compared to healthy controls in the…hubs of the default mode network”.

Ample is the evidence to suggest the mental process of creativity, from the viewpoint of neuroscience, maybe neurologically enhanced due to the inherent DMN impairments possessed by those with CMDs. Beyond science, some of our greatest pioneers have exhibited the link with their own self – admissions including;

  • Ted Turner, founder of CNN, diagnosed with bi – polar disorder
  • Elon Musk, serial entrepreneur, diagnosed with depression
  • Aaron Schwartz, founder of reddit, diagnosed with depression
  • Howard Hughes, serial entrepreneur, diagnosed with OCD
  • Richard Branson, founder of Virgin airlines, diagnosed with ADHD
  • Ingvar Kamprad, founder of IKEA, diagnosed with ADHD.

Of course, this research and history in no way infers (as far as we can tell) that only those burdened with mental disorders boast the gift of creativity – it does, however, show that the inherent wiring of their brains, negative afflictions, and all, is preordained to experience light bulb moments.

Great entrepreneurs are operators in the realm of true uncertainty. Explorers of the unknown. As they march into unknown environments with an unusual sense of surety and return with true creation, is it so hard to believe that they would possess anomalous cognitions?

The Future of Capital Raising – Part 1

Every year Billions of dollars are invested into technologies that have transformed the way watch content, order transport, listen to music, and book accommodation. Netflix, UBER, Spotify, and Airbnb.

The goal of this investment is for software and data to remove friction from connecting consumers and their desired outcomes/experience. If you look at marketplaces like eBay, Amazon, and Alibaba, they have successfully aggregated buyers and sellers, added trust indicators, and opened the doors to accelerating global trade.

In a B2B environment, this is also the case. SaaS Platforms have transformed the way companies engage with software. In a survey conducted by BetterCloud, 73% of organizations who responded said that at least 80% of their apps would be SaaS by 2020.

The survey highlights that when companies are looking at purchasing SaaS solutions, their criteria centres around cost, security, ease of use, integrations, scalability, reporting, and analytics.

The question which drives our thinking is, how can we utilise software to remove friction from the private capital raising process, to save time and money while also improving access to investors, efficiency, and analytics?

Current Private Capital Raising Experience

Currently, you have the process focused around personal networks, legacy systems, isolated solutions, manual processes, virtually no deal analytics, lack of investor connectivity, and a fragmented ecosystem with minimal co-operation and online platforms charging 6 to 8% and competing with the professional service firms.

The above image highlights the challenges faced by the ecosystem:
  • Investor attraction and discovery is endlessly frustrating for companies and advisors.
  • Money and time wasted due to isolated solutions, fragmented ecosystems, no integration of software, and little guidance of best practices.
  • No analytics and defined processes, companies are made to feel like capital raising is a mysterious art in which they have no power.
  • Online platforms are charging 6–8% for capital raising. The challenge with platforms charging this fee is that they 1) compete with existing providers and 2) become corporate advisors with a website.
Learning From a Frustrated Ecosystem

No one over the last ten years has ever said that they enjoy the capital-raising process. Companies, Investors, and Professional Services are all frustrated and wasting a significant amount of time and money on redundant processes. For everyone, this means considerable opportunity cost.

  • Absolutely no one in the 12+ years of Wholesale Investor has said they enjoy the capital-raising process.
  • The common belief that software can play a role in improving it.
  • Currently, online platforms are targeting retail investors and aiming to charge a 6–8% success fee and are effectively advisors with a website.
  • Current platforms compete with the existing industry, not ENABLING.
Software Driven Future of Raising Capital and Deal Making

The future of capital raising is subscription-based deal-making. It will utilise AI-driven matchmaking, active engagement, frictionless end to end transaction transactions, liquidity potential, and the creation of more opportunities.

Understanding software-driven capital raising:
  • Capital Raising ecosystem learns from the most successful technology, platforms, and marketplaces it has been investing in.
  • It learns that no one owns investors, and they have multiple sources of deal flow with no exclusivity to any advisor, friend, investment bank, platform, or private bank.
  • Subscription-based billing is the path forward.
  • The software will lead the matchmaking and analytics, with the real skill being provided by advisors in the deal creation and structuring.
The Future:
  • COMPANIES: Investors discover or AI-matched to them. The end-to-end process saves time and money. The business impact of a capital raise on a business is reduced.
  • INVESTORS: Are aggregated and matched with relevant deals, with access to the information they desire.
  • INDUSTRY: Utilise end to end software, streamline processes, improve efficiency, access to analytics, and ability to make more money by working on more opportunities.
  • LIQUIDITY: With the aggregation of deals and investors, dealmakers can create liquidity opportunities.

In summary, a software-driven, end-to-end, ecosystem enabled approach that will utilises detailed analytics and AI to assist companies, investors, and professional services in their deal-making.

Picking Your Partner, It’s More Than a Hunch!

So you’ve just decided to take action on a new start-up, one that you’re passionate about and see huge potential with. The workload will be huge, so the most logical decision is to find a co-founder to share this idea, but more importantly this journey, one who you can work with to bring the idea into reality. It’s the most logical decision, the workload will be less and it will be far more productive than embarking on this journey alone. 

However, finding the right person is a challenge. Most start-ups don’t fail because of a flawed idea, but instead because of internal disputes – largely between co-founders. This can be overwhelming, and a lot of independent ‘go-getters’ could easily decide they would rather tackle this alone, as would anyone wanting to protect their vision. Thus, before breaking down what you should be aware of when seeking a co-founder, it’s important to understand why finding a business partner is the best decision.

Hard truths hit best. So, on that note. You can’t do everything. 

Sure, you can try. But the reality of learning new skills, managing people, and also trying to get an idea off the ground, is not easy. A co-founder will not only allow you to balance the tasks ahead but also (if chosen correctly) have their very own set of skills that offer great utility. Complementary skills create a more efficient work environment and one that progresses forward in a synergistic fashion. On an economic note, investors are far more likely to fund a company that is run by an effective team, rather than one run by a passionate individual. Two or more people who work together that have a constant feedback loop can reach a level of stability and self-awareness that is hard to achieve in solitude – don’t underestimate the diversity of thought. More perspectives restrain the temptation of tunnel vision, which in turn allows for a much more prudent approach to business, and therefore lowers execution risks.  So… How do you pick the right one? There are many common mistakes people make when seeking out a co-founder. Here are the traits you should keep an eye out for on your search.

Find someone who complements your skills.

Say you’ve just met someone who thinks the same as you and has the same skills? Great! But only if your intention is to make a new connection. It may feel good to always be in a state of agreement – but what of the necessary contention and discourse that leads to the penultimate solutions you will inevitably need to ideate in the world of entrepreneurship. As mentioned before, a huge bonus that having a co-founder offers is the ability to share the load. If your co-founder can comfortably take onboard tasks that would take you triple the time, but them half,

you’re already on the right track. If the start-up blends the food industry and an app, and you’re a qualified chef, keep an eye out for someone who brings along the hard technical skills.

Look at how they manage stress.

There will be peaks and troughs with any business venture. Start-ups are inherently stressful, so you want to be working alongside someone who can remain level headed and handle the pressure. If emotions are running high within a company, it is more than likely flaws will emerge which investors and customers will notice later down the track. Following on from this, you also want to consider how they can help you manage stress. Someone who is competent both intellectually and emotionally will be able to notice if your attitude changes and respond appropriately, potentially alleviating stress.

Sometimes the best match isn’t a personality match.

Similar to point #1, you want someone who not only has different skills, but also a different outlook. If you consider yourself a type A person (proactive, organized, concerned with time management), try and seek out a type B individual (relaxed, creative, empathetic). This will allow the start-up to foster a ‘Ying and Yang’ environment, where each person is taking on board ideas and attitudes that the other brings to the table, things that a single person wouldn’t come up with on their own. Entrepreneurs are high in trait openness, and actually share a personality make – up very similar to that of an artist (if you think long and hard about this, it makes sense). Bearing this in mind an ideal partner would be someone with organisational ability and a managerial mindset.

Be critical of yourself before you’re critical of others.

Self-awareness is one of the best skills you can have in any field of life. Be aware of your own flaws before you bring another person on board. If you’re feeling comfortable, address these in the early stages in order to mitigate any tension that may arise due to a fault of your own. If you never think you are in the wrong, there is a high chance you will subconsciously place blame on other people when issues arise. Lack of self-awareness also limits the amount of open communication occurring. On the flip side, look for someone who also has the ability to acknowledge their weaknesses and actively work on them.

Find someone you get along with, even if it takes time.

This might sound like the obvious, but if you are too focused on getting your idea off the ground then you might jump on the first person who pops up. Take time to understand someone before giving the go-ahead, and if you find you aren’t a match after this time, don’t be afraid to get rid of them. The art of hiring and firing people is one you will need to master over the course of your start-up, so try and get it right during the foundational steps. There can be nothing worse than despising your business partner, but being beholden to the fact they own equity in your vision.

Are You Ready for 2021?

Whether negotiating payment terms with international suppliers, budgeting for projects or hedging future payments, planning for 2021 in a volatile FX market is an intimidating prospect.
Western Union Business Solution’s latest e-guide – “Are You Ready for 2021?” – uncovers the key market trends and events set to reshape financial markets and currencies.
The guide is designed to support businesses navigating currency volatility and enable better planning for foreign exchange payments.

 

 

Let me spin you a yarn

Two years ago I had just left a prized job at one of London’s best law firms with no real plan, only some modest savings and a vision of how I wanted to devote my time. I now head up Nanoloom, a company using a novel graphene-based material, BioHastalex, to create biodegradable fiber that can outperform plastics across every industry (starting with textiles). It may seem like a huge leap, but in reality, my early legal career and experience have placed me in a pole position to tackle this venture.

Working as a lawyer in the fields of M&A and IPOs may not seem the most obvious pathway into the world of startups, but some of the most successful entrepreneurs I’ve met are former lawyers, particularly in my work with LawTech startups. They’re driven, project-orientated, and thorough (and let’s not forget, some of them have managed to sell technology to lawyers). Having worked in several fields now, I can confidently say that the quality at the top in a big firm is unparalleled, but it’s not a fit for everyone. While working on large deals provided a decent challenge, I didn’t feel like I was where the real innovation happens. So I started to look at where I could use my skill set and build on my experience, but with a new focus.

Being asked to be a guest writer for CRIISP’s publications, I thought it made sense to introduce my background first. But rather than a generic timeline, I hope you will enjoy its telling through the few key things that I’ve learned along the journey so far, and I’ll aim to use this platform going forward to provide some modest insights on various topics which said the journey has afforded me.

Sometimes you’ve got to make the move – You can’t underestimate the benefit of a big market

This will of course be dependent on the sector you’re in, but you won’t find the same opportunities in smaller cities t

hat you do in major commercial hubs like London, New York, Singapore, or Hong Kong. This is not an exclusive list, but the opportunities I have come across in London do not exist to the same scale in many other places, includi

ng my home country of Australia, which was a driving force to my move from the antipodes in 2016. There is a reason why, when companies look to list, they typically aim to choose between London, New York, and Hong Kong. So follow the money!

The depth of these bigger markets is unmatched. While this can make navigating the regulatory environment somewhat trickier, as when you’re trying to meet a sophisticated market’s regulatory requirements, the global influx of capital, intellect, and opportunity more than makes up for it. They are ideal hubs for startups to bounce ideas off each other at seminars, meet-ups, and other events, and to grow organically with their peers. There are larger quantities of international deals and collaboration, coupled with strong government investment in innovation. By way of example, last year I was part of an Innovate UK graphene mission to Boston, which offered a genuinely unique opportunity to connect with investors and founders from across the United States who were interested in materials innovations.

This is not to say you have to move to one of these commercial centers, or that there aren’t benefits to starting up in a smaller ecosystem. It’s to say that in all my time in Sydney I didn’t come across a fraction of the opportunities that presented themselves in one month in London.

Not every step was for the long term – don’t miss the right exit

As Kenny Rogers said, you’ve got to know when to hold ‘em, and know when to fold ‘em. One of the smaller ventures I embarked on (post-law, pre-Nanoloom) was an app for the travel industry. I set up a company to operate it, built the app, and started building partnerships when, for a number of reasons, I decided to drop it within a few months of being launch-ready. Not because I thought it was a bad idea, but because I had come to the realisation that I was not sufficiently invested in what the app was trying to achieve to devote the next several years (at least) to growing it. With the benefit of perfect hindsight, it would almost certainly have fallen over during the pandemic with travel so restricted.

But the key point is I walked away because it wasn’t right for me, yet I learned a lot about company management at the smallest scale and built a fully functioning app in NodeJS, plus I was on my own two feet (gone were the days of corporate credit cards and battalions of document production and business development support). The time was a sunk cost, but the experience has certainly helped me get to this place where I am now working on something that is incredibly close to me (environmental sustainability).

Leveraging your background in a new venture – Know what you don’t know

When you first pick up the phone to your lawyer with a question that isn’t obvious (can I sue the EU for the losses my business will incur because they are not fast enough in reaching a Brexit deal with the UK?), it’s quite possible they don’t know the answer (no, really). But they will find it and they will furrow down every rabbit hole to dig out anything that might trip you up, no matter how tangential to their area it is (case in point above). Nevertheless, we all have blind spots and there’s nothing worse than when we think we don’t because that’s what inevitably leads us to our most unexpected mistakes.

My time in corporate law left me well prepared. At the most basic level, I know how to protect my company in a shareholder’s agreement, and what investor comments on an NDA actually matter (which are key and which are less critical), or what authorisations I need for major decisions, and how to get them. I also know to be on the lookout for certain things – will this company’s percentage shareholding affect my ability to claim tax credits or apply for a grant? Is this action we’re about to take something that could cause regulatory problems in a market we are looking to enter? But chiefly I know what I just shouldn’t touch without external expertise (looking at you, patents).

Whatever your background, you will have picked up skills and networks that hopefully make you great at certain things, but you should know when to look to others in your team or externally. So figure out where you should be devoting your time to push things forward, and when you need to take a step back and have someone provide that little bit of “extra” to get you across the line.

Finding the right fit – the virtues of patience

Working on large corporate deals, everything was expected to be churned out the same day. It could not possibly wait until tomorrow morning, let alone Monday. Leaving that environment, it was hard at first to get used to the fact that most other people have reasonable timeframes to work towards and everything does not, in fact, happen immediately.

One of the key things our team is adamant about to ensure Nanoloom is well placed in the long term is finding the right fit – whether it’s a hire or an investor or a product. It’s never worth agreeing to terms or valuations that you don’t believe in just to secure that deal or that piece of funding. Patience can be difficult when you’re short on time, but in the early stages of your company, you are making decisions that will affect it for many years to come. You need to bring people along on your journey who are aligned with your vision, and who are invested with more than money in your business. Short-sightedness can derail that vision or narrow your opportunities and options in the future.

For Nanoloom, it’s been key to engage investors who have an impact and sustainability focus, and who will take the time to understand our incredible technology at a deeper level. This can be difficult during a pandemic when much of the focus is on apps, but on the flip-side, it is incredibly rewarding to speak with those really engaged investors who ask the right technical questions and are interested in our rigorous testing procedures and results. And for the ones that don’t, we just aren’t the right fit for each other but it’s still a great networking opportunity.

My final thought is that not all advice is good advice (and I don’t mean expert advice sought above!). No matter how well-intentioned, whether you’re a founder or climbing the corporate ladder you’re going to get a lot of advice from friends, family, colleagues, and even from online articles (I know).

If you followed someone else’s advice you might have a product only they’d buy or use, and if you only follow another’s you’d have designed it for them. But your journey is yours, so do not be hesitant to back yourself and pick and choose the advice you need, to put it to the test, and to challenge it. Many early-stage investors will say the team is one of the most important catalysts in determining whether they make an investment into a given company or not. So tell your story and be you.

The views expressed are my own, do not represent those of any company or body I am affiliated with, and do not constitute any form of legal, financial, or professional advice.

The State of Drones, Australia

Drone technology in Australia has seen a marked increase in interest but a lack of progress with legislation. But few can answer ‘what are the drone laws in Australia?’
  • Nintendo’s technological innovations in the last 5 years have paved the way for the drones you see today.
  • Founders and investors need to stay wary of future legislative changes and fully understand laws on drones in Australia.
  • There is a bottom-up approach within large corporations where employees are bringing in their own drones to create efficiencies.

Interest in unmanned aerial vehicles (UAV’s), or drones, has dramatically increased in recent years. This brings along a new opportunity for Australian companies to scale up their technology, as well as reveals a foreign territory that demands legislation. Once integrated, the potential will be unlocked and applied to countless sectors. Drones with cameras, drones with spray nozz

Drone technology in Australia
Innovation in this space is an alien concept

les, drones with the capability to lift upwards of 50kg landing us in a transitory phase and in a sense, a technological revolution.

For most, innovation in this space is an alien concept. However, for AJ Verma, an executive, and engineer in the field, this is familiar ground. He revealed to The Venture how this technology didn’t develop overnight and instead relied on collaboration between industries to reach the level it is at now. Whilst the first drones took to the skies in the 70s, the turn of the century saw the necessary components become readily accessible. In fact, it was none other than the ‘Nintendo Wii’ that brought the same hardware needed for flight control into everyday life, and this occurred simultaneously with elements like lithium batteries and BLDC motors reducing in cost. The exponential growth of technology has reached a point where its capabilities can’t be ignored.

“It’s an exciting time to be involved in this industry, the world is changing significantly and we are on the cusp of a transport revolution with drones on land, in the sea, and in the air.”

As for Australian companies, where do we stand? Verma has faith that although the industry hasn’t infiltrated mainstream economics, the foundations are there. “I do believe Australia is a good place to start developing these technologies, leveraging off R&D tax incentives, commercial and defence grants & partnerships allow for R&D and market exploration.” The biggest issue is that of scale – investors currently involved have found success chasing volume markets overseas. “This isn’t necessarily a bad thing, it’s just a symptom of an industry being simultaneously heavily regulated and filled with cowboys.”

Paul New, a consultant, and executive director at ‘The Institute of Drone Technology’ explained how despite this smaller scale, Australia has made a shift towards using drones commercially in recent years. From agriculture to infrastructure, drone technology is being taken on board at a rapid rate. Being slightly behind the curve compared to countries such as America isn’t a bad thing, as New reveals. We have the chance to understand the international drone legislation landscape and adapt this in our domestic legislation.

The US is yet to shift its model to be more customer-friendly and relax its strict regulations, thus more progressive countries may become the targets for further drone investments. Validating actual customer-centric metrics and finding appropriate solutions to issues are concerns that most start-ups face, so this is in no way new territory. Verma attributes most of his success, and the ability to make a positive impact on communities, to being customer-focused with his ambitions.

Satisfying the demand whilst also adhering to the necessary legal requirements is the main challenge the drone industry faces, essentially – to be successful, “don’t get caught out”, according to New. Paul divulged to The Venture stating many executives, CXO’s and boards who have their eye on aerospace technology are unaware of the appropriate licences and it is this lack of knowledge that poses the greatest threat to companies. Questions around training, materials, and regulations are prevalent and must be addressed within Australia if the true potential of drones is to be realised.

Man or a worker with drone standing in a warehouse.

“How do we train the pilots? How do we manage the traffic? How do we create reliable supply chains of talent, materials, components? How do we regulate autonomy?” (Verma). Looking at the past where other innovations have tackled similar issues is an effective way to grasp the reality of future legislation. 10 years ago, electric cars were a new initiative, and commercial ambitions in the space posed similar risks to what drones face now. Yet now, there isn’t a manufacturer in the automotive industry that can risk turning a blind eye to electric transportation.

So, what’s in the immediate future? Paul New has alluded to the current use of drones in Australia stems from a Bottom-up approach colloquially known as the ‘Bring Your Own Drone’ (BYOD) model…and it’s gaining traction. BYOD, meaning employees bringing their technology into organisations, both enterprise, and government, and applying the technology to their respective fields. This is similar to the “Bring Your Own Device” model many schools have embodied, allowing students to boost their educational experience. “This empowerment of the workforces through the so-called ‘consumerisation of IT’ has increased productivity and reduced costs” (New).

Thank you to our contributors:

Paul New –  LinkedIn Profile
An early adopter and believer in the disruption economies like Drones and Digital, Paul began his Tech journey seven years ago, after establishing a successful executive career in Business Turnarounds, Risk and Security Management.

Anuj Verma – LinkedIn Profile
Aj Verma is working on a startup focused on aerospace training systems deployed to militaries that incorporate hardware and software elements. Prior to that, he was the CEO of an avionics startup, where he grew the company with zero funding to profitability and over a million dollars in ARR in 18 months through product development, corporate and go-to-market strategies.