E-Business
Issue No. 32 - December/January
IT firms entree to US incubator
by Ms Leila Henderson
Half a dozen local companies put their collective toe into the great ocean of the US technology market at the ANZA Technology Networking Conference in Silicon Valley in early November.
The companies were rewarded in spades, with immediate introductions to potential VC and angel investors, partners and customers.
For added excitement in a packed program, CineSync from Rising Sun Research — a spinout company from visual effects firm Rising Sun Pictures — won the Hottest Technology award, making it the third South Australian company to do so, after In The Chair (2004) and Digislide (2005).
This year’s prize had the added value of six months’ accommodation at the Plug and Play incubator at Santa Clara, which hoisted this year’s conference (brilliantly!).
Saeed Amidi, who founded the incubator after some “little” early investments in Paypal and Google, is a big fan of Australia and Australian innovators, having toured the country last year.
“I want to make it easier for Australians with a marketable technology to understand the North American market,” Saeed says.
“We can make it so easy to do business in the US because we have all the infrastructure here to make the right introductions.”
The incubator has invested US$4 million in five companies over the past six months and has already attracted a further US$40 million in co-investment. Where it gets really interesting is the deal structure for these very early stage, often pre-product companies. Founders typically need only part with a few per cent of their companies in exchange for seed funds typically of US$500,000 and upwards.
Sometimes investment is in the form of a loan, so they can hang on to all their equity to encourage future VC investors.
Compared to Australian deals, this is very attractive. But more important are the direct connections to key influencers in the Valley.
The biggest difference from the Au...
