Navigating Capital Raising

Navigating Capital Raising

The Melbourne EdTech Summit brought together leaders from Australia’s EdTech ecosystem and hand-picked global innovators to explore the education innovation agenda. Robert Gregory, National Education Leader at Maddocks, moderated a discussion with Tim Prail, COO at Faethm AI, and Genevieve Gregor, Partner at Colinton Capital. They spoke about the landscape of capital raising and the EdTech investment sector in Australia.

Key points

  • Melbourne EdTech Summit session overview
  • Australia as a brand
  • What capital providers look for
  • What startups should look for
  • Errors often made by startups

Robert Gregory, National Education Leader at Maddocks

Robert Gregory is an experienced commercial lawyer and leads Maddocks’ national Education Sector team and has deep experience advising universities, private sector education providers, schools and education sector regulators in relation to governance and commercial matters.  Robert’s experience has been acknowledged with numerous industry awards and recognitions.

Genevieve Gregor, Partner at Colinton Capital 

Genevieve is a Partner for Australian private equity manager Colinton Capital. Colington partners with business owners and senior management to unlock the growth potential of businesses. Genevieve is a past Pro Vice-Chancellor at Western Sydney University and past Managing Director and Co-Head of the Australasian Special Situations Group at Goldman Sachs based in Sydney.

Tim Praill, COO at Faethm AI

Tim Praill has extensive strategy, investment and corporate development experience. He is an advisor to startups on growth strategy, business model design and fundraising strategy. He is the past Head of Corporate VC and Head of Strategy and Transformation for the global education company Navitas. Tim is a board member of Global Study Partners and holds an MBA from the London Business School.

themes

Australia as a brand

Australia has built a reputation of excellence through its preeminent educational institutions. As a result, the whole education and training sector is credentialised through that positive reputation. With product quality, Australia is often compared to Scandinavian countries due to regulations that require a high standard of efficacy and proof. 

This branding is an aspect that founders should keep in mind when seeking capital in competitive, international markets.

What capital providers look for

When capital providers are navigating through EdTech pitches, there are a few key questions that arise:

  • What is unique about that business?
  • Does it have a business strategy?
  • What is the problem that needs solving?
  • Can it make money and be commercialised?

If the EdTech startup has an effective, adaptive founder team, this is favourable. The founders should have a unified vision of their business. This is critical not only for the delivery of the product or service, but also when working collaboratively with the capital providers.

What startups should look for

It isn’t a one-way relationship. When seeking out capital providers, startups have to find the right fit for their business. Startups should understand the motivations of the investor. If they are a generalist investor, they might be useful for you in that they work with your technology or business model in other sectors and can offer insights. On the other hand, if they’re a specialist investor who works primarily in EdTech, they can assist with networking and will have a more comprehensive view of the sector. Spend time talking to the investor about what their mandate is before you pursue a business partnership.

Errors often made by startups

Sometimes it is the foundational components that founders miss when pitching their idea. It is imperative that a startup can explain their business succinctly in about 10 minutes. This pitch should make clear what the business does, why it’s unique, and how the business model works. Without this, there may be more questions than answers leftover for the capital providers. 

Investors often ask themselves: Are they able to articulate their business in a way that will attract capital?

Another mistake that can be made is outsourcing the thinking and network-building to a third-party group of advisers. Some startups can use them as a crutch. A third-party is not likely able to incentivise someone outside the founder team enough to be able to sell your business in a way that attracts capital.

Go to 00:08:05 to watch the session.

Thank you to the speakers for sharing their invaluable insights with the EduGrowth audience—it helps make a somewhat challenging process a little bit more understandable. 

The Melbourne EdTech Summit was made possible through our partners Global Victoria, Practera, and AWS EdStart. This conference took place 8-10 September 2020.