Ask an Angel: Michelle Vu, Alice Anderson Fund - LaunchVic

Ask an Angel: Michelle Vu, Alice Anderson Fund


Michelle Vu is Investment Manager at the Alice Anderson Fund, LaunchVic’s investment fund addressing the capital gap for women-led early-stage startups.

A report commissioned by SBE Australia in 2022, shows that while only 22 per cent of Australian startups are founded by women, just 0.7 per cent of funding to startups went to solely women-founded companies.

This is despite a Boston Consulting Group (BCG) study that found women-founded startups produced 12 per cent higher revenues annually, while using one-third less capital than their male counterparts. The study also found that if women and men participated equally as entrepreneurs, global GDP could rise to up to $5 trillion.

The Alice Anderson Fund is invested in that potential, having so far backed 26 emerging companies founded by ambitious Victorian women and leveraged more than $33.8 million investment from the private sector.

We spoke to Michelle about lessons learned from the deals we’ve struck so far, and some of the most common misconceptions about the capital raising process for first time founders.

What makes a great pitch?

We come across a lot of pitch decks. I once timed myself and noted I spend, on average, 3.5 minutes per deck. A good pitch ideally should be able to, within less than 4 minutes, pre-empt these questions for investors: “Why this startup, why now, and what are the asks?” or generate enough interest for an in-person conversation.

I think there are two main elements of a good pitch: content and presentation.

Organising the content in a standard structure makes it easy to extract the information. A typical structure covers the problem, solution, market opportunity, business model, competitive advantage, traction, and team. You’d also want to use credible data to back up for your content.

Keep slides concise and use visuals & graphs instead of lengthy text. Remember that a pitch deck is a tool to spark interest and conversation, not a detailed report of every bit of research you have done.

What should founders look for in an investor?

Trust: What’s the interaction/communication been like? Do you want to work with them for the next 5-10 years?

Alignment: Do they make investments in your stage of business? Do they have the investment focus/ vertical/ values that align with your business?

Support: Do they have a brand or network to provide ongoing support? Do they provide opportunities to connect with other founders across their portfolio?

What are some of the biggest misconceptions about the founder/investor relationship?

Investors Only Care About Returns: While investors are certainly interested in a return on their investment, this doesn’t mean they only care about making money. Many investors, especially those with experience in entrepreneurship, also want to see the startup succeed for reasons beyond financial gain, such as a passion for the industry or a desire to support innovation. For example, the Alice Anderson Fund is  interested in supporting  startups to create more jobs and growth for the  Victorian economy.

Investors Just Provide Money: One common misconception is that investors only provide capital. While funding is a significant part of their role, experienced investors often bring valuable expertise, connections, and guidance to startups. They can offer strategic advice, mentorship, and introductions to potential partners or customers.

Investors Always Want to Control: It’s a common misconception that investors always seek to have significant control over a startup’s decisions. While some investors may request board seats or certain rights, many are comfortable with a more hands-off approach, especially if they trust the founder’s vision and abilities. For example, the Alice Anderson Fund takes a passive investor approach and does not take Board seat.

Investors Are Always Hands-On: Not all investors want to be deeply involved in the day-to-day operations of a startup. Some prefer a more hands-off approach, while others are more actively engaged. It’s important for founders to communicate their expectations and find investors whose level of involvement aligns with their needs

How specifically should founders keep their investors in the loop?

Regular written investor updates: This can be in the form of monthly, quarterly, or biannual reports. Example of investor update here

Transparency: Be open and honest in your communications. Share both good news and bad news. If there are challenges or setbacks, don’t try to sugarcoat them. Investors appreciate transparency and want to know the reality of the situation

One-on-One Meetings: In addition to written updates, schedule periodic one-on-one meetings with your investors. These meetings can provide an opportunity for more in-depth discussions, questions, and feedback.

Ask for Input: Investors like to be helpful, especially given they have a vested interest in seeing you succeed. Actively seek their input on strategic decisions or challenges you’re facing. This shows that you value their expertise while strengthen the sense of partnership and collaboration.

What should founders avoid doing while raising capital? What not to do?

Not getting proper legal advice: the nature of startup is being capital efficient. However, legal assistance is something you should not skim on. Don’t use a template and frankenstein it. Don’t get your corporate lawyer friends/partners who don’t have exposure to startups and whip something homemade. It’s dangerous, expensive to correct the mistakes, and unnecessarily drags out the raise. Having messy terms/ Shareholder Agreements is also a turn-off for further investors and potentially could cost you these deals.

Issuing shares in a priced round before the round closes can be problematic: Fundraising can take some time but it does need to be time boxed so that valuations remain consistent during a round and all investors are signing on to th esame set of shareholder/subscription agreements.

 Not understanding the difference between an advisory board and Board Director: it is not uncommon to appoint an investor as a Board Director. However, we sometimes see that startups, especially in early stages, inviting 3-4 investors to the Board in one round thinking they are forming an advisory board. A Board of Directors has a lot more control and voting rights and should not be taken lightly.

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Have a question about the Alice Anderson Fund?

Book in time with Michelle to learn more about how the fund works, and what we look for in an application.

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