What it takes to become a Skalata portfolio company
Skalata isn’t tied to any one industry. If you’ve got a clear vision, a unique solution, and are open to feedback, we’ll give you all the tools to scale.
‘Innovation’ gets thrown around a lot, but you'll need an unfair advantage. Some unique IP, a special skill or inside industry knowledge. A creative solution you can scale (and defend!).
We’re early-stage investors, so our funding should meaningfully extend your runway. Ideally you’ll have 12+ months of cash flow already. When it’s time to go another round, we'll lead it.
You'll need to have a product ready for market, or at least be close. Ideally you’ll have some users and revenue already, but if you need a bit more time to get there, that’s okay. Launch day should be just around the corner.
It's common for VCs to try to predict the future, and invest based on what they think the world needs. But we’re not fortune tellers.
We’re investing in you, not just your company. What we care about is your unique insights into your customers and your ability to deliver value for them. We think you’re the one to have a crack at this problem, and we’ll give you everything we have to ensure the best chance of success.
Raising capital is a huge distraction for founders, so let’s keep things simple: once you’re in, you’ll never need to look outside Skalata for growth capital.
“Not only have Skalata provided invaluable help in scaling NetNada's operations, they have also provided multiple rounds of funding to support our growth.”
We find it's better to invest a smaller amount up-front, work with you intensely to get things humming and then invest further capital when you need it.
Once you're on a sustainable growth trajectory, we can make additional investments across multiple rounds.
In our funds, we have hundreds of investors who are passionate about supporting and investing in exceptional early-stage companies. They trust Skalata to find, work with, and de-risk their investment. So when it's time to follow-on, they want to join.
“Not only have Skalata provided invaluable help in scaling NetNada's operations, they have also provided multiple rounds of funding to support our growth.”
Our co-investors include founders and early employees of Australia's fastest-growing tech companies. Need a warm intro? Done.
We offer frequent, smaller rounds of capital to help you prove certain assumptions which either de-risk your company or increase its long-term prospects. This way, you hold onto more equity and protect your cap table.
We get to work with our investment before we go all in. We’re risk aligned with our portfolio companies - and that’s a special bond.
“We wanted a partner who was values-aligned and who we were confident would back us through thick and thin. We really liked the Skalata approach of a smaller initial investment + mentorship, followed by a larger investment and the ability to help with Series A.”
Interested in applying? Here's what our typical selection process looks like.
The best place to start is our dedicated Pitch Form. Don’t worry about the classic “warm intro” at this stage. We just want to see a great business with lots of potential. If we're interested, we’ll jump on a quick call to learn more. If not, we'll follow up with some actionable advice.
Next up, you'll meet with two members of our team. This is where you'll run through your top-level vision. How are you tracking? What does growth look like? This is the getting-to-know-you phase. And it goes both ways. Come armed with plenty of questions, too.
You’ve wowed us with the vision, now it’s time for the nitty gritty, number-crunching stuff. Cash flows. Forecasting. Customers & contracts. This is the lengthiest phase, but it’s much faster if everything is in order ahead of time.
If you pass DD, we’ll then present your case to our Investment Committee (IC). They're the ultimate decision makers.If they sign off, we’ll provide a term sheet outlining our investment terms and valuation. Our goal is to keep things open, honest and simple.
We'll complete our final pre-investment checks (dotting I's, crossing T's...), and if that’s all good, you’re in! We'll transfer funds to your account.
Now the real fun begins. We’ll work with your team, day in and day out, to develop product-market fit, rev your growth engine, and build a sustainable business model.
The thing most VCs don’t acknowledge is that founders are taking a risk, too. Seed-stage businesses have one chance to get this right. Choosing who to work with is a big decision, and you shouldn’t make it lightly.
Rather than take our word for it, we encourage you to chat to our founders, and quiz them on the highs and lows of their Skalata experience.
“We felt an immediate connection with the Skalata team because they’ve all had similar experiences and faced similar challenges to us.”
When you join Skalata, you’ll receive $50k to $300k of initial funding, with follow-on rounds available up to $1 million. In return, we’ll receive an equity stake in your business. That stake is based on your valuation, and is determined on a case-by-case basis. When you’re ready for more, we’ll introduce you to our fund investors, help get you ready and de-risked enough for Series A, and handle all the heavy lifting of the next raise. You’ll never need to look beyond our network for growth funding.
Each company is assigned a Venture Partner and Senior Associate (what we call a "pod"). They’re your primary point of contact, and the ones driving your company's growth. But you’ll also get access to the broader Skalata team, our advisory network, investors, experienced founders, operators and business leaders. Your pod will work on your business, but not necessarily in your business. Their sole purpose is to help you get your company to the next level. They can help with:
First week: We spend a lot of time getting to know the founding team, understanding your vision, your goals, and your high-level plans.
Second week: we conduct a deep-dive into what’s worked well in the past (and what needs work moving forward). We also want to know what you're feeling more or less confident about. Next, you’ll meet with our Venture team and be allocated two lead points of contact depending on your goals and priorities, and who we think might be the best fit for you.
Third week onward: Our Venture team will support you within your working style – whether you prefer short check-ins, longer working sessions, or something totally different. It’s all about finding a cadence that suits you. In the first instance, a weekly check-in is usually a good way to go, but this depends on your specific requirements and preferences.
No - for the same reason that no two companies are the same. The Skalata experience is unique to you and your business. There will always be fundamentals and best-practices to keep in mind, but the goals, challenges and strategies will be tailored exclusively to you.
There are no workshops, playbooks, no homework and no compulsory lectures. Our support will suit your stage, your cadence, and your growth plans. You’re in the driver’s seat, and you get to manage your own time. The last thing we want to do is micromanage founders in their own businesses.
In terms of funding, the initial investment can vary depending on your stage, risk level, and requirements.
There are a few objectives we implement at seed that pave the way for sustainable growth. These include:
Developing a growth engine: Helping you achieve your growth targets. We also help you build the team, systems and infrastructure to scale.
Achieving product-market fit: Helping you measure where you stand in respect of product-market fit. What it means, and how to optimise for it.
Building a sustainable, scalable business model: Helping you develop a viable business model with healthy margins and unit economics to ensure consistent, sustainable growth.
After working with Skalata, you should have the foundations of all of these things, and start to look really appealing to Series A investors.
There’s an illusion that a VC can only help you. But if a VC thinks every single startup should go for s**t or bust, they can seriously harm you.
Unlike other funds, our investment strategy means we don’t need $1b outcomes to be successful. And we don’t need your market size to be “everyone who breathes” for you to get a look in.
With the highest support to cheque size ratio in Australia, we want to help you build a scalable, sustainable business – not pump up your valuation and then fade into the background when things get tough.
With our flexible funding model - where we deploy 2, 3, 4, or more capital injections throughout the seed stage - you get to keep more equity and protect your cap table.
We help you develop a long-term funding plan, making the milestones you need to achieve clear from day 1, and continually. Then we help you execute it.
If we think something's going to jeopardise you getting follow-on funding, you’ll know about it (and get support with course correcting).
Once we’re tapped out, we go in to bat for you with Series A investors - capitalising on our connections and pitching your company as if it were our own.
We've put together a little blog post with more info here.
It’s taken time, trial, and error to refine our process, but we think we’ve got it humming along nicely. It involves three main ingredients.
The team: The Skalata team and board has created, built, advised and exited successful companies across Australia, Asia and the US. Our CEO, Rohan Workman and COO, Maxine Lee were part of the founding team of the first university-based accelerator in Australia (Melbourne Accelerator Program – MAP) back in 2012. We’ve also funded and worked with hundreds of companies at the seed stage for over a decade. Seed is literally all we do.
Extensive local research: Prior to launch, we conducted five intensive months of discovery in Australia and abroad. We interviewed 100+ people, including pre-seed/seed-stage founders, founders at a later stage (post Series A), and people who invest in or work with early-stage companies. We uncovered what early-stage founders need help with, what later-stage founders wish they’d done earlier, and what investors need to see in companies in order to back them.
International best practice: We’ve woven in insights from people who run the world’s leading accelerators, seed funds, and venture capital firms. These include Y-Combinator, StartX Stanford, Accel Partners, Kleiner Perkins, Techstars, and Right Side Capital Management, among others.
We’re after companies at the seed stage who have already built some momentum or traction within the business. You’ll need a unique proposition (some defensible IP, special industry insight, or market solution), 12+ months of cash flow, and a market-ready product. There are over 30 data points we look at, but this is broadly what we need to see before we invest.
No, we’re sector agnostic. The truth is, we don’t want to box ourselves into a particular industry, because growth and good ideas can come from anywhere. Our current portfolio includes everything from Agtech and logistics to healthcare.
There are a few areas we don’t invest in, including gambling, tobacco and weapons (our founders should have a net positive impact on society). We don’t invest in pure e-commerce plays, biotech or pharma, capital-intensive businesses (which require huge funding amounts to get off the ground) or anything based solely around banking, insurance, provision of capital, leasing, property development, infrastructure acquisition, land ownership, construction, or making investments to derive rental / royalties / interest / dividend income. Phew.
We’re looking for founders who are honest, determined, driven and open to feedback. They’re not afraid of hard work or the unknown. We champion all backgrounds, languages and abilities. What’s more important is your attitude. Not sure if that’s you? Check out our analysis of successful founder personas.
We value companies based on a carefully-developed formula. We look at over 30 separate data points (both quantitative and qualitative) across four key categories: team, problem/market, solution, and traction. Value is driven by data. It’s important to us that our investment approach is as fair and objective as possible.
1. Initial Investment – we offer flexible initial investments of $50k to $300k. In return, Skalata receives an equity stake in the company. That stake is based on your valuation, and is determined on a case-by-case basis.
2. Follow-on Investment(s) - at any stage of the journey, we can make further investments up to $1 million. When you need additional capital beyond this, we'll open the door to our fund investors, and do all the heavy lifting.
We chew over this question fully in this Stack article on when to raise, and this blog post on the curse of “too early”.
But as a top-liner, you’ll need to show some evidence that you’ve found a market for your problem, whether that’s revenue, early customers, strong customer testimonial, or a growing freemium user base (with a plan for monetising it).
Our investment cap is currently $1 million, but that isn’t the end of the story. Once you’re in with Skalata, you’re in. You’ll never need to look beyond our network for growth funding down the track – whether you’re raising in one year or ten.
We’ll make the introductions to our investors, and help refine your pitch. Anything we can do to make your next round a success.
You can pitch by using the form at the bottom of this page. We’ve got loads of guides on how to get a VC-worthy deck together, how to speak a VC’s language, and at what point you should be seeking funding.
If we like the deck, we’ll invite you for an informal 20-minute call with one of our Associates. The next stage is a more formal pitch meeting, which may have a couple of us in.
If that goes well, we’ll start the due diligence process (DD), and you’ll be put forward to the investment committee (IC). And if that goes well, we’ll send you a term sheet to review and sign (these days, term sheets are highly standardised for efficient deals, so you won’t see anything crazy - but it is good to review it with a lawyer).
We work as quickly as possible, but as you can imagine, there’s a lot of paperwork. We’ll need to see lots of documentation from you. If your house is in order, it can take as little as 4 weeks, but the average is 6-8.
Skalata counts a number of very successful entrepreneurs among our fund investors. These include: Anthony Eisen (Co-founder, Afterpay), Jan Cameron (Founder, Kathmandu), Adrian Di Marco (Founder, TechnologyOne), Alex Waislitz (Founder, Thorney Investment Group), John Rubino (Founder, Monadelphous), Paul Dwyer (Founder, PSC Insurance Group), and WA entrepreneur Ian Trahar. They’re always on the lookout for co-investment opportunities in great companies.
Not at all! Quite a few of our portfolio companies raised funds at a higher valuation than implied by Skalata’s initial investment. The difference is, our founders tend to recognise that value beats valuation, and the hands-on experience of working with Skalata (through dedicated coaching, access to best-practice business resources, and a broader advisory network) will help materially increase the value of their business.
We (and VCs generally) don’t sign NDAs. Not because we have a secret folder under our desks labelled “ideas I dismissed in the pitch but plan to steal later”.
It’s because no one (including you) should sign binding legal agreements without input from lawyers, and having to wheel them out for every company we meet with is too big a time and resource drain.
We hear dozens of ideas a month and a signed NDA is an easy route to crossed legal wires. They are also notoriously difficult to enforce, and expensive to sue over, so we don’t recommend taking NDAs with you to any early VC meetings.
The most important thing to remember: a “no” doesn’t mean it’s a bad company, or a bad idea. Usually it’s because your business either didn’t meet our investment mandate, or, after diving into your value proposition, we weren’t able to develop a strong enough business case to move things forward.
At the end of the day, we get things wrong just like anyone else. We also know how emotionally draining this process can be, so we’ll try to be as transparent and speedy as possible, and give feedback where we can.
If you miss out on Skalata funding this time, that doesn’t mean you won’t be successful down the track.
Feedback on the investment outcome is a perfectly reasonable thing to want! We aim to be as transparent as possible with investment decisions (and often provide as much detail/feedback as we can), however, it isn’t always possible for us to provide comprehensive feedback for every company. In short, we’ll do our best.