Jeremy Liew is a Partner at Lightspeed Venture Partners, a US-based early stage VC firm currently on its seventh fund and with $1.3 billion under management.
He is also an Australian, having read for a BA/BSc (Hons) at the Australian National University, and was back in the country recently.
He has posted his thoughts regarding the Australian venture industry and entrepreneurial ecosystem on the LSVP blog. The first point he makes is that, comparative to the US, the Australia venture industry is but a pup. As I mentioned above, Lightspeed Ventures is onto their seventh fund and people like Tim Draper , over at Draper Fisher Jurvetson, are third generation VCs. By comparison, Australian venture firms are mostly only on their second, or at most, third fund.
Why does this matter you may ask? Firstly, it comes down to the experience of the team and their ability to assist ventures succeed. The more experienced a VC is, the more he or she can add value over and above the cash they provide.
Secondly, for the folk investing into VC funds (called limited partners), the more experience a VC partnership has collectively, goes a long way towards determining their attractiveness for further funding. In addition these LPs will look at the success of the firm in getting return on investment from their portfolio of investee companies.
Jeremy also notes that the consensus of opinion seemed to be that the Israeli model of Venture was the way to go. I agree with his prognosis, particularly the point that the size of the Australian market forces us to head offshore with, at least, the customer facing components. I know of a number of Australian start ups that have done just that in the past few months alone – some have done so after initially raising venture funding in Australia and then seeking their subsequent funding in the US, and others have gone straight over and raised their funding in Silicon Valley.
I question whether there isn’t a better way, though. A uniquely Aussie way of building successful, global brands. Given our proximity to massive markets in Asia, do we need to be US-centric at all -or is their an expanded axis we should tilt around? I’ve called this the S-axis, and at its simplest it comprises a focus on Sydney, Silicon Valley AND Shanghai.
Jeremy notes that venture guys generally invest close to home (driving to an investee company board meeting beats flying there, believe me I know :), but that if there’s a link to a geographic area, due to say…being an expat, then this flattens the earth and there is a possibility the connection will lead to portfolio companies being sourced from that area.
It is great to hear of Jeremy’s interest as an expat Aussie in investing downunder – As an Aussie, I would LOVE to be able to fund promising Australian startups and help them make the jump to the US.
I agree with his prognosis that over time we will hopefully have more expats in positions where they can help Aussie startups make the jump, we will see more Australian founded companies make it big on the world stage. This would be good for Australia, good for the founders, good for Aussie VCs and good for US VCs with ties to Australia.
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