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.
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.
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.