Female-focused angel investor network, Scale Investors has announced a strategic partnership with alternative assets crowdfunding platform VentureCrowd, as well as the appointment of three new members to the Scale Investors board – Catherine Robson, Judith Smith and Lynda Coker who have joined the board, effective from 1 March 2018.
Read more about this announcement in the media release below:
How to be a Superwoman: Boosting Financial Literacy and Confidence: Scale Chair Susan Oliver will present at this wonderful event on Tues 14 Nov sharing her story and tips for women in making financial decisions. Be sure to RSVP for the event here.
Following her appointment to the Reserve Bank Board, Carol Schwartz resigns from the Scale board, effect 20th July 2017, and remains a Founding Shareholder. We look forward to her continued interest and involvement in Scale as an active angel and wish her great success with the many exciting projects she is involved in. For more information, please click here.
What do Elizabeth Holmes, Sara Blakely, Linda Avey and Arianna Huffington have in common? They are all female entrepreneurs who have successfully built billion dollar businesses. But what does differ dramatically is their age.
A number of studies have tried to correlate an entrepreneur’s age with ultimate business success. There is the perception that venture capitalists only invest in university drop outs. But the Founders Institute concluded the ideal age to be an entrepreneur is 34. Duke University and Kaufmann Foundation studies claim older entrepreneurs have more experience and the probability of success increases with age.
Elizabeth Holmes was 19 when she dropped out of chemical engineering at Stanford University to start Theranos in 2003. She hated needles and spent a decade developing a device to simplify blood tests a process involving nothing more than a finger-prick. Theranos hardware and software allows simpler comprehensive lab testing. Having raised $400m it is valued at $10 billion. She owns ~50%.
Young gets the money
Veteran venture capitalist Fred Wilson conceded that “Yes, tech is biased towards younger people.” Niko Bonatsos, partner at General Catalyst said “It may sound bizarre to outsiders, but we – investors – are keen on paying a premium to partner with very young first time founders that simply think differently before the rest of us.”
Investors rely on pattern recognition. Hence they tend to stick with what’s worked before. Entrepreneurs in their early twenties typically don’t have kids or a partner, and can often focus 110% on their start-up. Investors value that level of commitment and determination.
Billionaire Sara Blakely was 27, and was selling fax machines door to door in 1998, when she bootstrapped Spanx. She wrote her own patent, generated $4m in sales when she launched in 2000, and now has over $400m in sales. Spanxdominates the “shapewear” market.
Age means experience
The Founders Institute concluded that older age has shown to correlate with more successful entrepreneurship up to the age of 40. After that it has limited or no impact. They attribute this to the fact that once people have experienced “complex projects” like “buying a house and raising a family” they can identify and address more realistic business opportunities.
Scale Angels invested in both CloudPeeps and Trademark Vision when founding CEOs Kate Kendall and Sandra Mau were in their early thirties, but both founded the businesses when they were 29. Kate is a “serial” entrepreneur and Sandra’s business built on her engineering experience at NICTA.
Linda Avey was 46 when she co-founded personal genetics service 23andMe, the world’s first personal genetics service. Linda had relevant experience. She’d spent 20 years in sales and business development and biopharmaceuticals. Her co-founder Anne Wojcicki was 33 with a decade of health care investing on Wall Street. 23andMe has raised over $100m and is valued at over $1billion.
The more complicated your area, the more age matters
Duke University research shows “the average age of a successful entrepreneur in high growth industries such as computers, healthcare, and aerospace is 40. Twice as many successful entrepreneurs are over 50 as under 25.”
Between 40 and 64, people focus on productivity and creativity, key attributes of entrepreneurship as they’re motivated to provide value, not just for themselves, but for others.
They have also developed ways of working more efficiently. Deb Noller founded Scale Angels’ investee company Switch Automation when she was 42. She transformed from a self-funded consulting business to a global PaaS (platform as a service) IoT (internet of things) company when Scale led her first external investment round. Deb has four children who have all left home. An increasing number of women in a similar scenario are applying to Scale for funding.
Internet media pioneer, Ariana Huffington, was 55 when she founded online news site Huffington Post in 2005. She founded the digital internet news business after a career as a journalist and publishing 14 books. In 2011, Huffington sold the business to AOL for more than $300m. The New York Times speculated earlier this year that the publisher, with 200m monthly active readers, might be worth $1 billion.
Both ends of the spectrum deserve a look
The Kaufmann Foundation recently reported that founders over 55 years old now comprise 25% of entrepreneurs in the US. This compared with less than 15% a decade ago. This demographic represents 20% of female entrepreneurs applying to Scale. I expect this proportion to increase with our aging population.
One area none of the studies focus on is school children. The Australian Government recently announced their Innovation Agenda, including equipping students to create and use digital technologies to prepare for the future of work. On that day, Minister Kelly O’Dwyer awarded the prizes at our Scale/Girls Inventpitch evening. The winning team was Aditi and Xialene, 16 year old girls from MacRobertson’s Girls High School. They invented the roll on “band aid”, a convenient, hygienic, versatile alternative to the traditional plaster.
This generation of digital natives is already establishing themselves as entrepreneurs at a very young age. Gold Coast sisters, Charli and Ashlee were 3 and 6 when they founded Charli’s Kitchen. Charli’s Kitchen is YouTube’s largest kids baking show globally. It has more than 50 million viewers and over $150k per month in revenue.
Data has shown that both older and younger entrepreneurs can start brilliant, high growth start-ups. Previous start-up and industry experience are key drivers of success, but younger entrepreneurs can substitute this with a combination of passion and experienced mentors. Entrepreneurship is “age-blind”. Savvy investors should be too.
Note: In researching this blog I noticed that publications such as Entrepreneur, Tech-crunch, Venture-beat, Founders Institute, Kauffman Foundation and Harvard BusinessReview primarily reference male entrepreneurs. In addition to ageism, another unconscious bias is gender, and that will be a futureblog.
Written by Scale’s CEO Laura McKenzie. This post first appeared on Xero’s blog titled as “Does your age determine if you’re going to be a successful entrepreneur or not?” and is part of a series of guest articles focused on start-ups, in conjunction with Xero’s first Xero for Startupsevent in Melbourne.
Switch Automation is an Australian software company with offices in Sydney and San Francisco. Deb Noller, CEO of Switch Automation, is a Springboard alumnae , Aon Entrepreneur-in-residence and member of Dell’s Founders 50 Fall Class of 2014.
Built on Microsoft’s industry leading Azure Cloud Platform, Switch’s intelligent building solution improves companies’ capacity to manage and control extensive building portfolios.
Experienced CTO and Scale Angel, Yvonne Everett, will take a seat on the Switch board and said: “I’m excited by the commercial possibilities of the open intelligent building platform that Switch Automation has built. The Switch software is backed by an experienced global business and technology team with great depth of skills. I am impressed by the forethought that has gone into building an architecture that will scale and adapt to a number of market sectors. Switch CTO, John Darlington, has done a superb job of positioning the platform for growth from a technology standpoint.”
Harvard MBA and strategist Lisa Ray Hennessy, who holds several directorships and co-led the Scale investment, said: “When evaluating businesses we look for a demonstrated demand, along with product offerings that are differentiated in the market and businesses that can be scaled on a global level. Switch delivers all three. There was consistent feedback from the market place that Switch’s product offering stands out among its competition and delivers discernible value to its customers.”
Here is the full press release.
CloudPeeps is an invite-only marketplace connecting businesses with freelance social media and community professionals, co-founded by Melburnian Kate Kendall, a serial entrepreneur, and Shala Burroughs. Lead angel for Scale, was Renata Cooper.
CloudPeeps launched in beta in January 2014. It’s a first-of-its-kind marketplace that curates the best remote talent in the community vertical. Startups, agencies and larger brands are able to engage pre-qualified “peeps” to quickly and cost effectively build a community and social media presence. All peeps are extensively vetted and hail from working at companies like Lyft, Zappos and L’Oréal. There are currently 200, mostly US-based, freelancers with a small cohort of Australians on the site. Over 50 customers have used the service to date to power their communities, Scale Investors being one of them.
A recent PwC report “The Future of Work – A journey to 2022” exploring how new technologies, data analytics and social networks are having a huge impact on how we communicate, collaborate and work identifies flexibility as key.
Kendall met her co-founder Shala Burroughs at Women Innovate Mobile accelerator in New York where Burroughs was an executive director. CloudPeeps is also a part of the current batch of FirstGrowth Venture Network – a program that Pando Daily labelled the best accelerator in New York.
Here is the full press release.
We are please to announce Scale Angels’ second deal, in See-Out, a visual search technology company, spun out of NICTA. Scale Angel Lauren Melton, led a syndicate of investors including QUT Creative Enterprise Australia, and has been appointed to the See-Out board.
See-Out Pty Ltd is at the forefront of a fundamental shift in the trademark and brand protection. The Company’s flagship product, CeeQTM, is a web-based visual search engine for professionals conducting more than 18 million trademark searches and examinations annually. See-out has been commercialising award-winning image recognition technology developed through years of computer vision research at NICTA. It has also received support from Commercialisation Australia.
It’s CEO Sandra Mau said “With the large number of logos and other brand images being generated daily, text search is not sufficient to secure a brand. This backing from our investors will enable See-Out to grow its Australian image search tech innovation into a global standard.”
Proceeds of this round will be used to recruit development staff to enhance product features, and begin to build a marketing and sales team.
Here is the full press release.