INDIGENOUS BUSINESS: Access to that all-important early-stage finance could become easier for aspiring Indigenous business owners, with interest in a first-of-its-kind masterclass series for Indigenous entrepreneurs and angel investors vastly exceeding expectations.
The pilot program may have even spurred the formation of the first cohort of Indigenous angel investors.
Run by Generation One, a program dedicated to creating parity for Indigenous Australians, and angel investment group Perth Angels with funding from the WA government, the masterclass series was designed for both sides of the investor-entrepreneur relationship.
The intensive courses run over two days were designed to skill up the next generation of entrepreneurs looking to secure early-stage finance, and help established Indigenous business owners learn to invest their money wisely.
Nyoongar woman and Generation One chief executive officer Shelley Cable says it’s not common for Indigenous business owners to be exposed to the angel investment world.
“The reason we did this was because Indigenous business is really exciting and a rapidly growing ecosystem and economy in itself, but only a handful of entrepreneurs have ever raised angel investment or capital.”
Angel investment tends to come in at the make-or-break moment in a business’s growth, filling the gap between family and friends and more formal venture capital funds. These early $1 million-plus capital injections from external investors can help a company gather momentum and scale at pace.
Access to finance has traditionally been a problem for Indigenous business owners, Cable says, and one of the biggest constraints to getting a business off the ground.
“Indigenous people don’t have the same access to intergenerational wealth, have low home ownership rates, so have no security for bank loans.”
Cable says it could be a “real gamechanger” to have Indigenous people in the investment seat supporting the next generation of Indigenous business.
“Significant barriers exist to the knowledge, networks and opportunities for Indigenous Australians to enter the world of angel investing,” Cable says.
“In fact, the barriers are so great that we do not currently know of any accredited Indigenous angel investors. This program seeks to change that.”
The organisers hoped to get 20 applicants to the pilot program run out of Perth last month, but were pleasantly surprised to get 50 – including people from interstate who wanted to come (they wanted to stick with WA applicants the first time around).
Cable says the final cohort of 25 in total came from all around WA, including the regions, and various sectors. This included a cleaning product supplier, a sign and safety equipment company and a card printing business.
Also selected for the masterclass was Benang Energy, a multi-disciplinary construction and maintenance group.
General manager Jasmine Kadic says that it was great to network and get advice from potential investors.
“It was quite comforting to have those people in the room.
“It really fleshed out what you can do to improve in your business, where you could grow with it, they were really good at explaining the selling points of the business, and when to sell it.”
Kadic says it was not quite the right time for her business, around two and a half years old and employing around 20 people, to look for this type of investment.
But some businesses did attract investment opportunities through the program, according to Generation One’s Shelley Cable.
“The outcomes speak for themselves.”
She says there was also talk of setting up the first group of Indigenous angel investors, which One Generation working with interested investors to make that a reality.
This article is part of a series on indigenous businesses and was produced with the support of the City of Sydney.