Turning Aussie ICT into billion dollar businesses

It's tough for start-ups to turn themselves into thriving concerns in today's economic climate

How can we turn Australia's ICT Big Idea's into billion dollar businesses? We all chase the dream of growth, but very few achieve remarkable success.

One of the most important factors is a leadership team. If you relied on the covers of the popular business magazines you might think it takes only an individual to run a company. No single CEO can possibly keep all the essentials in motion without help. But successful companies -- apart from those that are largely internally focused -- have outward facing leaders who are highly exploratory, particularly with business relationships and marketing opportunities.

Leaders need to be good communicators. They need to have chemistry; charisma that lets them bridge the gaps between partners, customers, industry leaders and, importantly, investors. They must be accomplished at finding, qualifying, and shaping the deals and relationships that ultimately will shape the company.

The current soggy economy, plus a volatile stock market, will dampen entrepreneurial activity. Don't quit your day job! However, if you are considering starting a company that's going to build the next great product or service, don't let the naysayers dissuade you. But do your homework and then find a way to fund your venture and build the team.

But you must be prepared to bring an airtight business plan and a gleaming resume to the negotiating tables. These days we have many more seasoned entrepreneurs who are getting a closer look in the current environment than the first-timers.

The first thing financiers look for is a strong, mature management team followed by signs that the company has already gained traction in the marketplace. It is also considered that forging strong alliances/partnerships can help, and it is generally thought easier for a new company to sell on the back of an established company as opposed to going out and selling from scratch.

Many entrepreneurs are beating the bushes in search of funding. Anyone making an investment decision is buffeted between powerful arguments for and against the company. Many avenues are pursued, such as talking to potential customers to find out if they really want the new product or service, and how much are they willing to pay.

Ask any venture capital player which of the various rounds of funding is the most difficult and you're likely to be told the second round. Call it a betwixt between difficulty. The first round is mainly helped by angel investors, friends, and family -- and some may even have been by the now defunct Commercial Ready program. But with the second round, when the company is barely off the ground, the stakes can look a bit iffy in the current economic climate coupled with the government's uncertain and indifferent attitude towards IT ventures.

Another option that is becoming more popular is the global corporate investor. The mega-vendors and others are now committing great sums of money to investments in companies around the world. Unlike VCs and equity funds, they have another agenda besides making money. They are also staking out claims in new emerging markets.

There are no easy choices. Venture capitalists can be the best thing that's happened to the company or its worst nightmare. You need to research the VCs and likely future financiers in the same way they will research you and your offerings.

Len Rust is publisher of

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