Even with the fundraising landscape presenting a few hurdles, Australian startups remain optimistic about the coming year. A survey by Angel Investment Network, which is the largest online angel investment platform in the world, found that 80% of startups in Australia feel positive about their future. Within this group, 48% are feeling very optimistic, while 31% are quite optimistic. This stands in contrast to a similar survey conducted in the UK, where only 68% of startups shared this optimism.
The survey aimed to capture the sentiment of startups in the current climate. It turns out that securing investment remains the primary challenge for 71% of these founders. Other significant concerns include hiring the right talent (35%), product innovation and development (31%), and achieving a good work/life balance (24%).
For those seeking funds, key priorities in the upcoming round include developing their core products (50%), expanding globally (41%), strengthening their team by hiring ideal candidates (34%), and scaling their marketing efforts with a clear return on investment in mind (33%).
When it comes to understanding the nuances of early-stage funding, there seems to be a noticeable gap. Just over half (55%) of those surveyed said they had a solid grasp of how to engage with investors and structure deals. Another 24% felt neutral, while the remaining 24% admitted they had a weak understanding. The survey also highlighted a mismatch between expectations and the rough reality of fundraising in tougher market conditions. About 49% found the process took longer than anticipated, 33% said it was on track, and only 18% experienced a quicker turnaround.
Funds running out faster than expected was another common issue, with less than half (49%) reporting that their funds lasted as anticipated. A notable 41% ran out sooner than they hoped, and 10% found their funds stretched longer. When asked, over 60% noted that their funds dried up in less than a year. Specifically, 20% lasted only 0-6 months, 42% managed 6-12 months, 23% went 1-2 years, and 15% lasted beyond two years.
Running a startup is no easy feat, and it’s taking a toll on mental health, with 54% acknowledging an impact and 16% indicating a significant effect. To cope, a good number of respondents turn to walks (54%), mindfulness and meditation (52%), conversations with friends and family (42%), and discussions with fellow startup founders (29%).
For those who secured funding, profitability emerged as the most critical factor winning investor confidence (30%). This was followed by scalability (26%), the strength of the team (14%), and revenues (8%).
Startups believe that the government could lend a hand by providing easier access to grant funding, which 78% of respondents wished for. Additionally, 55% advocated for more generous tax relief for investors, 35% wanted enhanced R&D tax refunds, and 34% called for consistent and long-term policies.
Mike Lebus, co-founder of Angel Investment Network, shared: “Australia’s startup scene is thriving, with many promising ventures attracting investment and pushing for international growth. Our findings show a tendency towards optimism, notably more than in the UK. However, there’s still a gap between what’s expected and the real fundraising experience. The global scene is intricate, causing longer fundraising cycles, cash flow issues, and reduced valuations.”
He added, “It’s critical for startups to fully understand the processes they face. In the coming months, we’ll work on closing this knowledge gap, offering advice and guidance from experienced investors and successful startups.”
Are you searching for new investment opportunities? Become a member of Angel Investment Network, where visionary investors connect with tomorrow’s leading businesses.
