GFC panic a boon for venture capital fund

GFC panic a boon for venture capital fund

Summary: Sydney-based venture capital firm OneVentures has just celebrated its one-year anniversary, an achievement that seemed a long way off when the founders' investment drive was pushed off course by the global financial crisis (GFC).

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Sydney-based venture capital firm OneVentures has just celebrated its one-year anniversary, an achievement that seemed a long way off when the founders' investment drive was pushed off course by the global financial crisis (GFC).

In late 2008 investors and capital vanished as the world descended into one of the biggest liquidity crises in history.

As institutional investors closed up shop, OneVentures executive director Michelle Deaker and her partners took a different tack, knocking on the doors of high net-worth individuals they had previously worked with and received investment from.

It took almost three and a half years, but by March 2010 the fund had raised $20 million in investment capital, an amount matched by the Federal Government as part of the innovation investment fund (IIF) program.

"The impact of the GFC ... was that it made capital raising a more arduous process," Deaker said.

"Most firms experienced taking twice as long to capital raise and only raising 50 per cent of what they had initially targeted.

"I understand, we were one of few firms to achieve a successful raise in this period in Australia."

The advent of the GFC has in some ways helped to define the fund, whose founders and investors contribute "more than just money", also providing experience in operations, market advice and business networks.

"We have access to people who have broad business networks that can add advantage to our companies," Deaker said. "We talked to a lot more people in the process until we found the people that were interested in what we're trying to achieve."

"We have actually made investors significant returns through first-hand involvement in early stage high-growth technology companies — operational management is core to our expertise."

OneVentures partners have all successfully founded businesses and exited these at a profit. Deaker is joined by general partners and executive directors Paul Kelly and Anne-Marie Birkill.

Its investment areas are early stage companies in the markets of clean tech (50 per cent), IT (25 per cent) and life sciences (25 per cent).

It first started placing capital last March and since then the trio has looked over 320 opportunities, performed preliminary due diligence on 30 companies and invested in one company, with another two to three more investments expected in the near future.

OneVentures will probably invest in nine to 10 opportunities over the 10-year life of the fund and hopes to generate its first returns for investors within three to four years, Deaker said.

Topics: Government, Government AU, Start-Ups, Tech Industry

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