Return to main AirTree site
Insights
7
min read

Introducing AirTree Seed – A fund dedicated to backing founders right from the start

Published on
February 1, 2022
James Cameron and Jackie Vullinghs
Enjoy this post?
Subscribe to the AirMail Newsletter
Share

Seed investing starts with seeing potential where others don’t. We believe in investing in the vision you have for your company’s future, not as it exists today. At times, that requires a leap of faith into the unknown. But we’ve done this many times before, and it’s what has earned us the privilege of working with Australia and New Zealand’s most ambitious and visionary founders building the iconic technology companies of tomorrow. 

We’re thrilled to launch AirTree Seed, Australia and New Zealand’s largest pool of capital ($200 million!) dedicated to founders who are just getting started, giving them an unfair advantage as they go through the hardest leg of the journey.

AirTree partners Jackie Vullinghs and James Cameron share what AirTree Seed means to those who matter most – founders who are right at the start of their journey.

Why launch a dedicated seed fund now?

Jackie [JV]: Seed investing isn’t new to AirTree. We like to be the first money into a startup and many of our greatest successes are companies we invested in pre-revenue and even pre-product.

Today, the quantity and quality of ambitious founders we get to meet at the earliest stages is increasing quickly, and AirTree has the resources in place to accelerate their growth right from the start. So we’re launching the Seed fund to write those first cheques and give founders the benefit of our focus, expertise and community. From there, we can use our Growth fund to open up access to our global network and to invest larger cheques as the company grows. 

James [JC]: Seed investing has always been the core of what we do at AirTree. Series A announcements and onwards tend to get the splashy headlines, and naturally, founders think we prefer later stage investing. But the vast majority of our investments are made at seed-stage into companies that are still pre-revenue. While the media may not get excited in the same way as they do for the later stage rounds, seed is where we get the most excited, and it's where we dedicate the most of our time. It’s a huge privilege to get to work with founders right from the start when their startup's DNA is just taking shape. 

So if none of this is new for us, why bother launching a dedicated seed fund now? It’s a good question. The first reason is that we want to double down on our commitment to supporting founders from the very beginning. The second reason is to dispel the myth that established VCs in ANZ don’t do seed deals. We’re sharing our historical investment data to help show this isn’t just the usual VC marketing BS.  

Does that mean you’ll be making more investments each year?

JV: We have no hard rules around the number of investments we make out of each fund. We invest in the very best companies we meet and the founders who blow us away with the size of the impact they want to make and their plan to achieve it. The good news is that we’re seeing more of those opportunities each year, demonstrating how quickly the ANZ ecosystem is maturing.

JC: For us, being a seed investor doesn’t mean spraying and praying. We aren’t trying to build the largest portfolio of companies in ANZ or win any prizes for being the most “active” investor in terms of “deal count”. We focus on building a relationship with our founders and understanding their ideas. When we invest in a company – regardless of whether it’s pre-product or series B – we go in with high conviction and work hard to help them achieve their vision. 

This does mean there’s a natural limit to the number of founders we can back.  We have to say “no” a hell of a lot more times than we can say “yes”. But we’ll never say “no” to a company just because it’s too early. If that was the case, we never would have backed the seed stage founders that made up 70% of investments last year. But there is a big difference between backing seed-stage companies and making an index bet on all seed-stage companies. And trust me, saying “no” to companies is the shittiest part of our job - but we will always strive to do it quickly and without BS.  

How early will AirTree invest? And do you co-invest? 

JC: We aim to take true seed-stage risk, which requires believing in founders long before they have any external validation from customers, other investors or even team members. The majority of our investments made last year were into companies before they made a single dollar of revenue - and in many cases before even hiring their first team members. At this stage, startups are really just thought experiments – there’s a broad vision for where they want to go – but there’s no map of how to get there. That’s when we love to get involved. 

In terms of check size, we’re just as comfortable writing a $100-$250K check alongside others as we are leading a seed round of $1-5m. One of the wonderful things about seed stage investing is that it tends to be inherently more collaborative. ANZ now has a deep bench of great specialist seed-stage investors in ANZ that we have huge respect for and love to work with, including a bunch of brand new funds just launched in the last 12 months alone (like Galileo, Black Nova, Jelix, Tidal & AfterWork plus the many excellent angels and other seed funds launched before that). With so many quality investors out there there has truly never been a better time to be a seed stage founder in ANZ. 

JV: We want to be right by your side, right from the start. As an example, in 2021 we invested in Zeta Markets. There was only a white paper and 3 founders with a huge vision for what a decentralised version of finance could look like.

Other times we meet founders at the start and end up investing years later. So even if you don’t think you’re ready, we’d love to meet you today and get to know each other, so that when the time comes we can both make a decision quickly. 

James & Jackie

How does AirTree Seed support founders?

JV: We know the early days of building a company are messy and unpredictable. No one gets it right the first time. We’re here to support you through that journey. We’re not there to give you the answers, but hopefully we can ask some helpful questions along the way. 

We also have a well-resourced Portfolio Success platform to help you see around corners and accelerate your growth — whether that’s through helping you hire, providing company-building playbooks, or connecting you to the right person who’s done it before. 

JC: Support is more than money. Being a founder can be an incredibly lonely journey. And founder fatigue is not uncommon. Over the years, we’ve worked with many mental health professionals who we recommend to our founders (and we’ve also made this list available through our Open Source VC resources). If any of our founders or their teams want to access clinical or counselling services on that list, we offer to pick up the bill. 

What does AirTree’s involvement look like in later-stage rounds of companies you’ve invested in?

JC: The good thing about being a multi-stage fund is that we’ve got growth capital available to support our founders as they scale. We spend a lot of time with our founders, helping them think through their future fundraise strategy, from thinking about when to raise, how to pitch, and intros to the right investors when required. In many cases, we lean in to lead those follow-on rounds as well. So the next time you fundraise you won’t be doing it alone – we can help you get back to business faster.

What advice would you give to seed-stage founders who are fundraising?

JV: Elicia wrote a brilliant Open Source VC article on this, so I recommend you go there first, but if I had to say one thing it would be that it’s never too early to share your vision with us. We’re very open to cold outreach, you don’t need a warm introduction. Let’s start building the relationship ahead of when you need to raise money. 

JC: We’ve found that the best relationships are based on a shared belief around the vision, and intellectual honesty on what it will take to get there. In our experience, founders who are willing to build these sorts of relationships are far more likely to succeed in the long run. Maybe that’s too old school for an increasingly FOMO-driven world, but we want to be authentic to who we are and the founders we work with.

Disclaimer
AirTree Ventures entities listed below are corporate authorised representatives (CAR) of Boutique Capital Pty Ltd (BCPL) AFSL 508011.

CAR has taken all reasonable care in producing all the information contained in the website including but not limited to reports, tables, maps, diagrams and photographs.

However, CAR will not be responsible for loss or damage arising from the use of this information. The contents of this website should not be used as a substitute for detailed investigations or analysis on any issues or questions the reader wishes to have answered.

You may download the information for your own personal use or to inform others about our materials, but you may not reproduce or modify it without our express permission.

To the extent to which this website contains advice it is general advice only and has been prepared by the Company for individuals identified as wholesale investors for the purposes of providing a financial product or financial service, under Section 761G or Section 761GA of the Corporations Act 2001 (Cth).

The information in this website is not intended to be relied upon as advice to investors or potential investors and has been prepared without taking into account personal investment objectives, financial circumstances or particular needs. Recipients of this information are advised to consult their own professional advisers about legal, tax, financial or other matters relevant to the suitability of this information.

Any investment(s) summarised in this website is subject to known and unknown risks, some of which are beyond the control of CAR and their directors, employees, advisers or agents. CAR does not guarantee any particular rate of return or the performance, nor does CAR and its directors personally guarantee the repayment of capital or any particular tax treatment. Past performance is not indicative of future performance.

All investments carry some level of risk, and there is typically a direct relationship between risk and return. We describe what steps we take to mitigate risk (where possible) in the investment documentation, which must be read prior to investing. It is important to note risk cannot be mitigated completely.

Whilst the contents of this website is based on information from sources which CAR considers reliable, its accuracy and completeness cannot be guaranteed. Data is not necessarily audited or independently verified. Any opinions reflect CAR’s judgment at this date and are subject to change. CAR has no obligation to provide revised assessments in the event of changed circumstances. To the extent permitted by law, BCPL, CAR and their directors and employees do not accept any liability for the results of any actions taken or not taken on the basis of information in this website, or for any negligent misstatements, errors or omissions.

AirTree Ventures 2021 Trustco Pty Ltd ACN 652 901 409 CAR Number 1293641, AirTree Ventures Opportunity Fund 2019 Trustco Pty Ltd ACN 633 454 467 CAR Number 1293645, AirTree Ventures Opportunity Fund 2021 Trustco Pty Ltd ACN 652 901 043 CAR Number 1293642, AirTree Ventures Opportunity Fund Trustco Pty Limited ACN 609 594 881 CAR Number 1293643.