A SAFE may feel safer to founders but will feel less safe to Aussie investors. Photo by Jason Dent on Unsplash

A common question from Aussie tech startup founders is whether they should raise their investment with a convertible note, priced equity, or a SAFE note.

The short answer is that you can raise investment with a SAFE note or convertible note in Australia, but you may find it harder to raise your round.

Here’s the longer answer (nothing that this advice pertains to Australian tech start- ups in 2020, that the future may be different and that other markets—like San Francisco—definitely are different).

In a priced equity round, you and the investors must first agree on a dollar figure amount for the value of the company (called “the pre-money valuation” or sometimes just “the pre-money” or “the pre”).

You and the investors must then agree…

If you’re not on a mission to solve a specific problem, how do you choose the best customer problem for your startup to work on solving?

Photo by Markus Spiske on Unsplash

Update: you can now watch this TV interview on the topics covered in this blog post, interviewed by Simon Thomsen of StartupDaily on his regular startup show on Ausbiz.tv (registration required).

We have to help our customers develop new habits — to use our product/service to solve that problem, rather than their old habitual solution. Habits form more effectively with less time between repetitions.

Another variable in that equation is the real or perceived value created. If the real (or perceived) value created is sufficiently high (eg selling a house for $200k more than the traditional means of sale) then…

Have something to say, publish the first draft, and relax about publishing unfinished work

Photo by Ryan Snaadt on Unsplash

It’s important to communicate regularly with potential customers, employees, investors and all the other audiences out there, because no matter how hard you work as an individual or as a founding team, these groups ultimately determine whether or not your startup will succeed.

Among all the startup founders I get to meet and work with, it’s rare to find someone who’s already communicating often enough with these audiences.

I think this is because creating content is always going to be an ‘important-but-not-urgent’ task, and when your task list for the day is over-stuffed with ‘important-and-urgent’ or even ‘not-important-but-still-urgent’ tasks, it…

Photo of the author from 2009, working at my laptop in the offices of a startup called 3eep, in Surry Hills, Australia.
Photo of the author from 2009, working at my laptop in the offices of a startup called 3eep, in Surry Hills, Australia.
Me in 2009, working on my own startup in the offices of 3eep. Photo Pierre Sauvignon © 2009

Choosing to become a startup founder is hard. The disincentives are so many — and the rewards so few and unlikely—that many startup founders I know tell me they consider it ‘a calling’ rather than a career choice, to make it seem more like a decision that was made for them, or hard-wired into them; that they were motivated by some higher purpose rather than material or creative rewards.

Looking back on the startup founder part of my career, what strikes me most about those 15 years was how rapidly it flashed past; how little of it I remember in…

Women deserve to share a fairer world with better men.

It’s #IWD2021 . I’m angry and sad (but mostly angry) about the injustice, inequity and violence Australian women suffer and the roles Australian men play in perpetuating it, whether through action or inaction.

Me (right) in 1983, a younger, dumber man.

I’ll try to be a better ally. I will try harder not to walk past it and I’ll be more determined to call it out when I see it.

I’ll sign the petition, attend the march and I’ll donate to help organise it.

If, when trying to be an ally, I make mistakes, I will try not to be defensive if someone calls me out on it…

If you’re certain you understand the business, and you are confident your investment in it will succeed, what you’re doing is not venture capital, it’s banking.

Venture capital must have a high degree of risk in order to have a chance of earning the high returns venture capital investors expect from this asset class.

Anytime you think you understand the business and the market in which it operates, consider whether you might be mistaken. That happens; you wouldn’t be the first.

Or, you might be investing too late in the company, or too late in what has previously been an…

As an early-stage tech startup founder you will often have to write your own startup’s marketing copy, and you may find it difficult if the brand’s tag line is the first line of marketing copy you’ve ever written.

Because you spend so much time with your head focused on how to solve the customer problem using technology, when someone asks you what your product or service is, you’re likely to describe it in terms of features and functionality. When trying to write marketing copy, you’ll usually do the same.

It seems logical, and that’s why it’s a mistake.

Marketing (and…

I’ve been wondering if maybe we have the death penalty all wrong.

Maybe instead of using the death penalty to deter people from committing crimes for which the death penalty probably isn’t a sufficient deterrent, we should use it to very effectively deter people from committing minor offences.

I’m proposing we make labelling fruit with useless labels like this one an offence punishable by death – who’s with me? (Photo: author. Lime: Tropical North Queensland).

For example, someone may still risk a death penalty for flying to Singapore with drugs up their bum, if their family is being held hostage by a drug gang. Whereas I don’t think anybody is going to risk the death penalty for not properly sorting their recyclables.

I’m against any form of death penalty, but it also drives me nuts when people don’t put…

Photo by Ryan Quintal on Unsplash

Some investors want to stay investors in portfolio startups for the whole life of the company, others are looking for a quicker return on an investment and will be happy to accept a smaller return along with that.

You can get penalised by either kind of an investor if you raise the topic of an exit strategy without being asked.

If in your pitch to a long-term investor you mention an exit strategy, you might not seem ambitious enough or long-term enough to them.

When pitching to a short-term investor they may have their own ideas about what your exit…

You might end up damaging the perceived value of your product, or the market price for it, or both.

It’s very common for the startup founders I meet to want to offer the earliest versions of their product or service to early customers for free, or at a significant discount. I encourage them (and you) to not do that.

Discounts work best when the customer already has an expectation of what the price should be and is already convinced that they need your product (or a competitor’s similar product) to solve the problem they have.

Photo by Artem Beliaikin on Unsplash

If I offered you a half-price coffee, that’s a discount that has a high likelihood of converting you as a customer. Assuming the quality…

Alan Jones

I’m Alan Jones, an EiR for startup accelerators, GP at M8 Ventures. Previously investor, founder, and early Yahoo PM. Opinions mine (but should also be yours).

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