Don't focus on startup funding: Spreets founder

The quest for funding shouldn't be the primary focus for Australian startups, according to Spreets founder and serial startup investor Dean McEvoy.

Focusing on funding could muddle the long-term goals of an otherwise healthy startup, according to Spreets founder Dean McEvoy.

McEvoy, speaking on an investment panel at the SydStart tech startup conference in Sydney today, said that it is better for a young startup to focus on its core business than to try impressing potential venture capital investors.

"It's interesting to talk about funding, but your goals and entrepreneurship should be about growing a great company, and a great company will always get funded," said McEvoy.

Dean McEvoy
Dean McEvoy Image: SydStart

As the founder of Australian online group-buying platform Spreets, co-founder of online crowdfunding platform for restaurants and bars, IconPark, founder of online reservation system, Booking Angel, and investor in Blackbird Ventures, McEvoy said he believed there is still too much of a focus on funding in the local market.

"When I was starting Booking Angel, I think chasing funding actually kind of f***** my business a bit," he said. "Because I was focused too much on what an investor would care about, and think there's a little bit too much of that conversation here still."

From McEvoy's perspective, with Australia being a historically difficult market within which to secure startup funding, tech entrepreneurs that have had their start here have often been uniquely resilient.

"Australia is a hard environment to get funded in, but it's also something that makes it stronger," he said. "We've been so deprived of investment, we've had to grow these amazing companies, and that's why you see the Atlassians, and Campaign Monitors, and these guys who just got into a market, have done it better than other people, and have made money out of it, not needing investment."

McEvoy also cautioned local startup entrepreneurs against focusing only on the Australian market, making the case that young companies should set their sights on international markets from the very beginning.

"Australia is too small; we're an unfortunate size," he said, highlighting the case of Israel, a smaller market in which most startups look to global business from the outset.

"You may start and you think that by focusing on Australia in the beginning it's a good idea, but if you can focus on day one on being global, it's better," he said. "Everyone who starts a company in Israel thinks globally from day one."

Atlassian co-founder and co-CEO Mike Cannon-Brookes, who also spoke at the event, said that despite the Australian market's smaller size compared to the likes of California, the country's startup sector is punching above its weight.

"I think we would compete on a head-to-head basis," he said. "I think we do really well for our 22 million or so population."