Pitching for Capital

I went through a really rough time in my late teens. I dropped out of University, got myself into a world of emotional pain, and had a form of psychosis.

A psychopharmacologist I was seeing at the time helped to change my life and was soon after diagnosed with cancer. He said to me about a month before he died, “if you can get to the end of your life, look back and honestly assess that you’ve made every step count, you’ll die a happy man.”

..we have around ten million dollars under management – our aim is to generate at least twenty to twenty five percent per annum returns and be in the top quartile of VC’s globally.

Since then, I’ve taken the view that business is a vehicle to have a positive impact on the world. The best entrepreneurs solve problems for the betterment of humanity, so for me CapitalPitch is a social enterprise. It’s designed to create economic development through helping founders solve big problems.

While I say that it’s a social enterprise we’re of course run purely for profit. For those who have invested in our venture fund – we have around ten million dollars under management – our aim is to generate at least twenty to twenty five percent per annum returns and be in the top quartile of VC’s globally.

In 10 years we aim to have invested in a portfolio of around 50-100 companies. We expect that the majority of those companies will scale up and create jobs, solve big problems, and do good things globally.

Among the founders, I’d love to find 10 Elon Musks in this part of the world. If I get 10 years down the track and we’ve done that, then I will be a happy man.

Early Stage Companies
It’s bloody hard to create a company, often pushing into a new space where you don’t know what you don’t know. A lot of founders get confused between building a lifestyle business and building a scalable entrepreneurial company, or they believe they can build a global enterprise and still have a great lifestyle, which is rare.

You have to make a lot of sacrifices if you want to build a significant tech company. If you just want a lifestyle business that does $1-2m a year in revenue and pays you a good salary, that’s a very different proposition.

A lifestyle business is atypical. It fits an aspiration that people have to travel around the world and work in a hammock, or build a company and flip it in two years and retire. A tech company that scales globally is a different proposition.

A lifestyle business doesn’t have technology at its core. It uses technology to create automation and remove the need for humans. In an entrepreneurial firm, technology is the primary driver, the product. These are businesses built around technology rather than around founder expertise with technology as an afterthought.

A lifestyle business doesn’t have technology at its core. It uses technology to create automation and remove the need for humans. In an entrepreneurial firm, technology is the primary driver, the product.

In an entrepreneurial company the founders typically take the minimum salary possible for a very long time while building the value in their equity. Once they’ve raised millions of dollars they might get paid a little better, but nowhere near a corporate executive rate.
I’m really passionate about helping founders understand these differences, to get clear on what their personal and business goals are and help them design a business that aligns to those goals. For the ones who are ready to fight the big fight and make genuine sacrifices, it’s kind of like going to the Olympics. People don’t wake up one day, see an athlete on TV and say “I can do that” and then jump on a plane and compete at the Olympic Games.

It takes years of dedication, training, routine, coaches and all of the right tools and support structure to get to the Olympics. The personal and business journey required to create a global tech company is not dissimilar.

It takes time. It’s extremely difficult and you need to train your ass off. You learn on the job, make lots of mistakes, and go through rights of passage like screwing up a few times and then figuring things out, rebuilding, getting the right team in place, and creating something new.

We also help founders understand that raising capital is a completely different discipline and set of knowledge to building a company, so we’ve systemised the pre-investment process. We don’t just sit and judge founders and say ‘you can’t work with us’. If we see promise in a company we will work with them for three to six months to get them ready for our investment committee and once we’ve invested we actively help them through to the next round of financing as well.

Our Goals
CapitalPitch is aiming to be in the top tier of venture funds in Asia Pacific. We aspire to be at the same level of success and reputation as Blackbird Ventures with a similar level of funds under management sourced from institutional investors, family offices and high net worth individuals. The companies we invest in need to have the ability to deliver a 10x return and have a shot of going 100x.

Those expectations demand a different lens through which to view a company and to view founder capability. We ask whether founders can build a company with one hundred million of revenue. Do they have the ability or willingness to be coached and taught and attract people around them who can help them get there? Can their revenue model be scaled exponentially? Does the technology have network effects, a platform strategy or virality that will allow it to scale exponentially?

Those expectations demand a different lens through which to view a company and to view founder capability. We ask whether founders can build a company with one hundred million of revenue.

We look for founders who are a force of nature, with the ability and personality to never say die, with ‘grit’, passion, and perseverance over an extended period. They need to be thinking really big, to solve a massive problem and think far beyond Australia, with a global mindset from day one.

We’re searching for those people every single day and feel extremely lucky and humbled to have the opportunity to invest in and support founders with the aspirations to solve huge problems.

Jeremy Liddle is the Co-Founder, Executive Director and General Partner of Capital Pitch.