A new partnership between Australian equity-based crowdfunding platform VentureCrowd and angel investor group Sydney Angels is expected to help connect more local startups with early stage investors.
The partnership will see Sydney Angels, a group of over 70 high net-worth investors, refer local startups to the VentureCrowd platform for funding.
It is also expected to help grow the number of startups that are able to join the VentureCrowd platform, which has already been used to pump funds into companies such as Ingogo, Fame & Partners, and CrowdMobile.
VentureCrowd, which is supported by Artesian Venture Capital, already claims around 25 partners, including incubator Blue Chilli, Telstra accelerator muru-D, venture capital firm Blackbird Ventures, and Sydney co-working spaces Fishburners and Tank Stream Labs. This partner network provides the pre-screening and selection of startups that feature on VentureCrowd, ensuring that wholesale investors on the platform are accessing decent deals.
Sydney Angels management committee member David Jackson said partnerships such as those that VentureCrowd has fostered enable early stage startup supporters to pool their combined resources while also helping minimise the failure rate among investment recipients.
"We believe more heads are better than one in early stage investing, so by pooling our expertise and networks and sharing the work, we can come to a consensus view on the merits of a deal and investment terms," said Jackson.
From Jackson's perspective, crowdfunding platforms such as VentureCrowd represent an effective complementary funding source for early stage startups.
"Equity-based crowdfunding is a great way to access a different group of investors and to top up an investment round led by more experienced professional investors," said Jackson. "We support this investment method as complementary to existing ones, not an alternative."
In January, VentureCrowd investors pitched in AU$363,000 on a AU$3.8 million pre-IPO funding round completed by mobile crowdsourced services and application company Crowd Mobile.