Investment FAQs

FAQs for founders

How early is too early? Do I need traction to reach out?

The earlier the better! We’re a first cheque investor, and have funded companies before they had a product, customers or a dollar of revenue. There’s no such thing as too early, so if you’d like to chat, just reach out here.

Should I reach out if I already have investors?

We’ve co-invested with most Australian VCs across our portfolio and count them as friends. If you already have angel investors or VCs on-board and want to partner with another investor, we’d love to hear from you.

What qualities do you look for in founders?

We’re looking for founders who are obsessed with building the company of their dreams, and are delivering a product they believe the world needs.

When considering a partnership with you, we believe: 

  • right, not hype. We value rational thinking, authenticity, and intellectual humility. Business building is hard, so it’s ok to be open about your biggest challenges. This helps us understand who you are, how you think, and how we can support you. 
  • long-range ambition. We align with founders who have a long term view of the future. We’re not here for quick exits, and we’ll work with you for as long as you are pursuing your life’s work. 
  • ...greatness is born from uncertainty. Some of the greatest companies on the planet emerged in times of great uncertainty. We back founders who see difficulty as an opportunity, not a barrier to be avoided.  
  • velocity over precision. We're looking for pragmatic founders who don't get stuck in the trenches of perfection, and aren't afraid to move fast and iterate along the way.
  • ...learning never stops. Failure is a painful thing, but there is power in a growth mindset. We look for founders with an uncanny ability to convert life's setbacks into future successes (and empower their teams to do the same!).

Any tips for my first chat with you?

Most seed-stage companies won't have solid performance metrics or financials, but we'd love to see that you've thought through the following: 

  • You. Why are you doing this? What unique experience, background or deep insight inspired you to pursue this? Who is the team you’ve brought on your journey? 
  • Product. How did you build your current product? What insights and data led to this? What insight makes this 10x better than your closest competitor? What network or platform opportunities exist? 
  • Opportunity. Is there an existing market or are you creating a new one? Where are you starting, and is the opportunity global? Is the opportunity and market accelerating and if so, what are the tailwinds? 
  • Uniqueness. What is your unique point of differentiation? Who are your competitors? How will you build a durable competitive advantage?

What don't you want to see in the investment process?

  • Cumbersome pitch decks. Sending a 50-slide deck isn't feasible for us to work through given the volume of decks we see every year. Some of the most compelling founder visions have been communicated in <10 slides.
  • Outsourced IP. We only invest in companies that own their IP.
  • Hiding ‘ugly’ truths. If we're partnering for the long-term, we need you to be transparent about challenges or major issues. No one is perfect, and it helps us understand how we can help you.
  • Overbearing middlemen. We're backing founders, not their advisers. We appreciate the importance of professional advice, but we won’t invest if we can’t engage with the founding team directly. 
  • Copycats. We invest in companies that are truly differentiated; if you're building the Uber/AirBnB/Slack of 'X', that’s okay, but make sure you can communicate why you’re uniquely positioned to win.
  • Re-dealing. Once we've agreed terms, we stick by them, and expect the same from you.

What does your investment process look like?

Our process takes between 4-10 weeks, depending on founder readiness (note: we’re happy to meet before you’re officially raising!) and the specifics of the opportunity which may impact our due diligence timelines. 

While we aim to move as fast as possible, we take an eyes wide open rather than a fingers crossed approach. We're not impulsive decision-makers and don't believe speed dating leads to great outcomes. This a two-way street and a long-term partnership, so let's get to know each other.

You can read more details about our investment process here.

What happens if you don't want to invest?

If you’ve taken a first meeting with us, then we’ll always call you and share our reasons why it’s a ‘no’. The road doesn’t stop there, and we’ve often provided intros to other investors or contacts within the ecosystem who may be able to help. And once you’re in our orbit, consider yourself part of our community at Folklore.

What is your typical cheque size?

Every investment is different, but we have the flexibility to invest from micro-cheques and up to $2.5M for a first cheque into a business. We want to be with you for the entire journey, so at the time we first invest, we’re already thinking about the second, third and fourth cheques (which will scale up from the first). 

What are your investment terms?

We’ve adopted the Australian Investment Council’s Open Source Seed Financing fundraising docs as a basis for our investment terms, and which also serve as an industry standard and universally accepted starting point for later-stage funding rounds. We believe transparency and efficiency is critical to the fundraising process, and will only lead to better outcomes for founders.

What extra support do you provide around legal, accounting, etc?

If you need support from lawyers, accountants or alternate advice, we can make introductions to experienced professionals who regularly act for companies we have invested in.

What is your code of conduct?

We adopt the Australian Startup Community’s model code of conduct, which you can read here.