At Exhort Ventures, we believe that the foundation of groundbreaking innovation lies in the hands of extraordinary people. Our focus is on identifying and empowering relentless founders - those with the vision, expertise, and tenacity to build and execute on their promises. Our mission is to be the catalyst for early-stage success, leveraging our extensive community and experienced networks to connect founders with the resources they need. Our promise is to back only companies in which we truly believe, and we are committed to doing everything within our power to support them – during both the good times and the bad.
- Deal Flow Generation: We engage with an extensive network of established investors from leading venture capital firms, with whom we have built trust and relationships over the years. Venture firms partner with us to provide the additional capital required to close a funding round, understanding that while we may contribute a smaller cheque, we offer an extensive network that founders can tap into. We also engage with startups at their earliest stages, helping them find strategic investors when they reach the right scale. Lastly, we offer a share of the deal-specific profits (carry) to those who facilitate introductions to founders.
- Strategic Co-Investments: We do not lead investment rounds; instead, we invest alongside top-tier VCs that have a strong track record and with whom we identify strong alignments. The nimble structure of our syndicate allows us to make decisions more quickly, bypassing institutional red tape. This approach helps founders close deals quickly, enabling them to focus on building their businesses.
- Community at the Core: Our long-term vision is to foster a community of LPs who are as invested in the success of our startups as we are. We are building a community of LPs comprising CEOs of established companies, founders, industry operators, lawyers, and seasoned investors. The cumulative insights and reach of our community unlock tremendous value for founders who want us on their cap table, not just as a provider of capital.
- Sector-Agnostic: We are not bound by investment constraints, which allows us to identify and capitalise on the best opportunities across all sectors. However, we prefer to invest in software and in businesses where technology is at their core.
Secular Themes We Favour
Each theme below represents not only a significant market opportunity but also mirrors broader societal and technological trends, which we expect to persist and evolve over the next decade.
- Cloud-Native Software Disruption: The shift towards cloud-native software is disrupting incumbents entrenched in outdated legacy tech stacks. New ventures are demonstrating superior scalability and efficiency at exceptionally low costs, delivering value to customers. We view the rapid advancement of artificial intelligence applications as complementary to software companies rather than disruptive.
- Generative AI Integration into Human Workforces: We are at the infancy of the development of generative AI, but its integration into human workforces is set to redefine productivity, creativity, and efficiency. By automating routine tasks and improving decision-making, generative AI can augment human skills and significantly boost productivity. There are numerous ventures in this space, and it is essential to navigate carefully, as the lasting impact of these innovations over the next decade is still to be determined.
- Digitalisation of Payments: With economies becoming more digital, the demand for secure, efficient, and adaptable payment solutions is soaring. This trend is especially relevant in emerging markets transitioning from cash to digital and in developed economies focusing on digital efficiency. The evolution of fintech, along with the adoption of blockchain and other technologies, promises to further revolutionise how transactions are conducted while promoting economic inclusion.
- HealthTech and Aging Demographics: Advancements in medicine have considerably extended average lifespans, leading to an aging population. This demographic shift presents unique challenges and opportunities. HealthTech solutions aim to address critical aging-related issues, such as chronic disease management, remote patient monitoring, and personalized medicine. Leveraging AI and other technologies, HealthTech can offer more proactive and predictive care models, thereby reducing healthcare costs and enhancing the quality of life.
- Evolving Cybersecurity Industry: Cybersecurity is an ever-evolving field, with new threats and challenges emerging as technology advances. With the increasing digitization of assets, the proliferation of connected devices, and the sophistication of threats, there will continue to be a growing need for advanced security solutions to protect our data and privacy.
- E-Commerce Solutions: The rise of e-commerce is reshaping consumer behavior, with a shift towards the convenience of online shopping. We are particularly interested in businesses that are changing consumer behavior and spending patterns. The ongoing evolution of e-commerce platforms, including the creator economy and integrations with social media, is creating new opportunities for brands to engage with consumers and enhance their experience.
Our Investment Process
Having a rigorous investment process can help filter through the noise, but it can also hinder your ability to identify non-obvious opportunities. We assess each deal on its own merit, acknowledging the following considerations:
- Founders: We invest in people – relentless, domain-expert leaders obsessed with solving real problems. We prefer founders that are deeply rooted into the problem they are solving and offer a unique perspective.
- Markets: We favour large and rapidly growing addressable markets. Though we also like niche, inefficient, and fragmented markets if they have much lesser competition and if we identify opportunities to expand into adjacent markets.
- Business Models: We favour capital-efficient businesses that leverage technology for rapid scaling. Our support extends to innovative business models, as well as proven models from other industries that can be effectively replicated across various geographies and verticals.
- Traction: We generally don't invest in ideas, we actively seek evidence of market validation. This means we look for clear indicators that the product not only solves a problem but also that it has garnered genuine customer enthusiasm and approval.
- Deal Terms: We play the long game, ensuring every term aligns with the potential for stellar returns. In early-stage deals, we focus on company ownership and pro-rata rights, which are the two single contributors to enhanced returns. When a company does really well, you want to own as much of it as you can.
Why Now is the Time
From a macroeconomic perspective, the era of cheap money is over... or at least for now. The balance between capital supply and demand has shifted back to investors, allowing us to benefit from lower valuations, less competitive deals and better terms. The following points are also structural tailwinds benefitting Australian investors.
- Aussie Ecosystem Boom: The Australian tech scene has exploded over the past decade, fuelled by record VC funding, government support, and a wave of experienced founders stemming from some Australia’s most successful startups – think of Canva, Airwallex, Safety Culture and many others.
- Global Solutions: The Australian market is small but is fertile ground for experimentation before going global. Global markets are now more interconnected than ever and we champion startups that think beyond borders, building products that can grow into enormous global markets.
- Undervalued Gems: Australian startups are often priced attractively compared to global peers, presenting a unique chance for higher return multiples.
- Early Mover Advantage: The Australian ecosystem is still young but at an inflection point, offering exponential return opportunities for early investors. The market is not as crowded and competitive, allowing you to handpick some of the highest quality deals.
Federico Quaia | Investment Professional & Angel Investor
Most of my professional career has been centred on finance, predominately as an investment analyst, with a mandate to manage in excess of $9 billion across most of the major asset classes. My background equips me with the skills to assess investment opportunities from multiple angles and navigate complex financial landscapes.
What sets me apart is my unique perspective as an institutional investor turned syndicate lead. While many syndicate leads come from operational roles within startups, my background offers founders valuable insights into how institutional investors evaluate companies, maximising their chances of getting funded. Leveraging my extensive network of investors, industry operators, and syndicate members, I can open doors for founders and provide them with the resources they need to succeed.
I am passionate about bridging the gap between traditional finance and early-stage startups. By forging strategic partnerships with leading Australian venture capital firms, I aim to bring some of the most promising institutional deals directly to you through a co-investment structure.
Some of my angel investments and portfolio companies include: