Australian Founders are no strangers to adversity and hardship. In fact, this is simply part of the entrepreneurial journey required to achieve a Founder’s grand vision for a better tomorrow.
Despite strong economic headwinds, decreasing valuations, and slowing deal flow, over the last few months I have witnessed Founders demonstrating perseverance and grit, with many identifying opportunities to bolster cost structures, attract top talent, and explore often less popular international markets for global expansion.
During this tumultuous time, the VC community has also risen to the occasion to support their portfolio companies, largely through bridging rounds and tactical business guidance in an effort to weather the downturn until inflation subsides and monetary policy reverts.
Across our portfolio of Seed to Series-C companies, the following trends arose reflecting a marketable shift in how fast-growing technology companies are adapting, and most importantly, finding their edge in a highly competitive, fast-paced environment.
International Expansion Taking a Different Flight Path
Global expansion to the United Kingdom, Europe, or the United States is a well-trodden path for many Australian Founders transitioning from product-solution fit to product-market fit. However, in recent months I have had a material uplift in Founders seeking advice on how to best approach overseas expansion to India and Southeast Asia. The key drivers for this shift are largely due to accessibility with many emerging markets now offering more attractive growth opportunities for early stage technology companies.If global expansion is on the horizon, I’d suggest checking out the following resource on some of the common mistakes Hassel Verbeek sees when companies make the exciting leap.
CFO Skill Gap
From Series-A to newly listed technology companies, Founders are finding it difficult to identify and hire finance leaders with strong skillsets in securing and managing funds, supporting M&A activity, and guiding working capital. A shift from an accounting skillset to one focused on governance, reporting, and the processing of transactions reflects a change in market dynamics, highlighting the importance of long-term planning over short-term decision-making. Founders are filling this gap by relying more heavily on funding partners to assist in complex financial modelling whilst also seeking external support via outsourced CFO solutions.
Based on this market shift, our team recently hosted a Q&A on How to build a winning finance function as you scale. Catch the replay below.
Impact is here to stay
There has been an enormous flurry of ESG news, events, and articles of late, with many institutional investors leading the charge and embedding firm processes to ensure investment activity aligns with internal ESG mandates.
Through my conversations with leading Australian venture capitalists, there is a clear intent and focus on making ESG a core component of their business practices, with many embracing the challenge as sustainability rises to the forefront of key decision making.
However, the challenge that many Founders are facing is how best to articulate what ESG means to their business and how to measure progress when resources are so limited. Despite differing views amongst Founders on when and how, one thing is clear, the ESG wave is fast approaching with consumers and investors basing critical decision-making on whether or not impact is at the forefront of your business mandate.
Wondering how your ESG initiatives stack up? Get in touch with us to request your free ESG diagnostic for early-stage technology companies.
As you close out the year, what are you focusing on to prepare for 2023? If you're looking for support in these final months of 2022, please reach out. We'd love to explore how we can work together in the New Year.