Why I Decided to Launch a Student-Run VC Fund

Textbook Ventures’ First Student Pitch Night

Textbook Ventures is a student-run venture capital firm, created for students. I launched the VC fund late last year with my co-founder, Patrick O’Connell, with the aim to help students to put entrepreneurial ideas into action, both in founding startups and as venture investors.

The inspiration for the fund, or need rather, came from a friend of mine who was working on a startup. They had a moderate level of success and were able to raise some capital from an angel investor. However, this later turned out to be a disaster — swayed by the lull of what seemed to be a large amount of money, the founders quickly realised that their investor was adding very little strategic value while they sweated day in, day out. They eventually bought out the investor, but not without significant cost. It ended being approximately double the amount that was initially invested. As a observer, I was thinking to myself, “Yikes, that’s a lot of money for a 20 yr old to be losing like that!”

After my travels abroad, I quickly realised that it was a no-brainer why overseas universities were pumping out far more entrepreneurs than Australia. The infrastructure to support student projects was simply better in their respective entrepreneurial ecosystems. There was more capital and a greater willingness to take a chance on young founders. After learning about all these incredible initiatives overseas, I was determined to create something inherently ‘Australian’ so we could support young entrepreneurs in Australia and help them take their ideas as far as possible.

Reducing the Barriers to Entrepreneurship for Students

Very frequently, I hear of students wanting to start something but for some reason (team, money, time, etc) they can’t. Thus, there is quite often a mutually exclusive decision of wanting to startup your company and balancing against your studies. I wanted Textbook Ventures to be a platform where we can encourage students to give their company a go — whether or not the company succeeds or not is irrelevant (if they do, that’s awesome) but rather, they took something valuable away from the experience. I don’t see a successful entrepreneur necessarily being made tomorrow or in a few months time. It’s a longer term play to sow the seeds in the Australian ecosystem that may bear fruit on a five to ten year horizon.

Providing Students with a Rare Opportunity to learn about Venture Capital from the very best in Australia

What I believe sets us apart, is our venture associate program. Venture capital in Australia remains woefully low, relative to other developed countries, despite the recent injection of capital from various super funds. I noticed this while I was travelling through the UK and USA — there are many funds abroad that raise similar amounts or in excess of the entire Australian venture capital industry, all in a single fund. For students interested in early stage investing, this means fewer opportunity to learn about funds management, deal sourcing or due diligence in Australia. If the industry is to sustainably grow, it needs to start at the grassroots level. We’ve created an opportunity for our associates to learn from leading venture capitalists across Australia, hosting sessions with the likes of Airtree Ventures, Right Click Capital and NAB Ventures.

Associate training session with Benjamin Chong from Right Click Capital!

Progress to Date

Patrick and I worked with six companies over the summer as a proof of concept, to test our hypothesis on whether we could add value to student-led startups. The results were heartening — five of the six teams we worked with received some form of funding, whether it be in the form of grants or investment and two were accepted into accelerator programs.

MiniEpi — developing an accessible life-saving adrenaline/epinephrine auto-injector device, where the alternative is often nothing. They placed 2nd in the Peter Farrel Cup and are currently looking to raise their seed round.

Although all of these companies have since “formally graduated” from Textbook Ventures, we still work closely with many of them. We’ve recently on boarded two teams into our portfolio this year, V-KAIWA and Delkit working in the area of VR and drones respectively.

On the venture associate end, we’ve recruited a team of six amazing associates across a range of disciplines, from undergraduate to MBA. They’re currently canvassing the many faculties across UNSW and we can’t wait to hear what exciting projects they dig up.

Final Words

We’re always excited to hear from young founders with exciting ideas. The crazier it might seem, the more we want to hear about it!

If you’re not a founder but still want to get involved with Textbook Ventures as an associate or otherwise — check out our website or drop me a line at david@textbook.ventures. Always up for a coffee!