Stages of venture funding
- Pre-seed and seed: backing a team and early product, often alongside angels. See our guide to seed funding.
- Series A: funding a startup with product market fit to build a repeatable growth engine.
- Series B and later: scaling a proven model, often into new markets.
What VCs look for
VCs look for a large market, a team that can win it, evidence of traction and a business that could return their fund. At the earliest stages, team and market carry most of the weight. Later, metrics such as growth, retention and efficiency matter more.
They also look for fit with their fund: stage, sector, cheque size and whether they can lead the round.
Angel investors vs venture capital
Angel investors invest their own money, usually earlier and in smaller amounts, and decide quickly. Venture capital firms invest other people's money, write larger cheques, take board seats more often and follow a formal process.
Many startups raise from angels first, then from VCs. If you are at the earliest stage, start with angel investors in Australia.
How to approach a VC
Warm introductions work far better than cold emails. Research which firms invest at your stage and in your sector, find a founder or investor who knows the partner, and ask for an introduction with a short, clear summary.
Have a tight startup pitch deck, your key metrics and a clear answer to how much you are raising and what it gets you. Our list of top venture capital firms in Australia is a starting point for research, and Airtree's open-source investor list covers far more firms, angels and grants.
The Australian VC community
Australia's venture market is small enough that partners know each other well, so reputation travels. Innovation Bay's Venture Capital community is exclusive to General Partners of VC firms, and meets each year at Venture Downunder.
For founders, that means one good introduction through a trusted network can open several doors.
Hear from the investors
Innovation Bay's Investor Intel series and our podcast, Open the Pod Bay Doors, feature VCs and angels talking about how they make decisions.