Brisbane company Orli-Tech Pty. Ltd. has received nearly A$2 million (US$1.05 million) from a venture fund operating out of the Mediterranean island of Cyprus.
"The lesson is there is a lot of venture finance available around the world and it isn't always in the places you expect," said Orli-Tech managing director John Taylor.
"It all has to do with contacts and networking. You just have to get out and spend a lot of non-billable hours talking to people."
For Orli-Tech, the critical contact was a Dutch lawyer who heard Taylor deliver a speech at a European conference.
The lawyer pointed Taylor at CLR Technology, a private equity fund registered in Cyprus and consisting mainly of UK investors.
Geographical complexities were largely nullified by the use of e-mail rather than face-to-face meetings to conduct the bulk of the negotiations, Taylor said.
He was forced to employ middle-men to deal with issues raised by the Cyprus central bank and government financial policies.
Even so, negotiations were successfully concluded in less than six months at a lower cost than Orli-Tech would have faced with the same process in Australia, Taylor said.
An electronics engineer who headed the IT department of a Brisbane law firm, Taylor founded Orli-Tech four years ago with lawyer Rob Kelly.
A central part of its business is Bar Web, which delivers its InfoToto legal news service via the Internet to regional law firms and by intranet to 70 percent of Brisbane's barrister community. The service is also marketed in partnership with Lexis Asia Pacific.
As well, Orli-Tech owns InstantIT, an online computer store selling high end PC products and Director Club, an free Internet service for company directors and CEO's.
The company's problem is that it grew organically from its founders' funds and operationally is "run on the smell of an oily rag," according to Taylor.
It wanted to expand into the UK where it believes its technology gives it a 12 to 18 months lead, but only needed A$1 million to A$2 million to fund that expansion.
"If we'd wanted $20 million and had the right sort of business plan, it would have been easy. Because we were looking for one or two million, it proved impossible."
Another initial frustration was the difficulty of telling genuine venture capitalists (VCs) from all the consultants taking their money up front for putting a venture-capital attractive face on the company.
"The frustration was there seemed to be a lot of companies which wanted to act as consultants and suck up cash preparing you for an approach to a VC.
"They take up several days of the time of your entire staff for a report consisting of words you want to hear."
The Cyprus money will enable Orli-Tech to launch its UK operation in the next three months.