Australian entrepreneurs Bridgett Loudon and Emily Yue are proof that you don't need a lifetime's worth of contacts and a lengthy CV to attract the holiest of angels.
At just 25 and 29 respectively, the two former Bain & Co management consultants have just successfully raised A$1 million ($1.08 million) and claim they couldn't fit all the backers in. In an era of too many start-ups and too few backers, where did they go so right?
It seems that wealthy angels will throw money at anything they are convinced has real disruption potential. Loudon and Yue's idea - Expert360 - has that kind of status-quo-busting appeal.
The idea works along the same lines as Freelancer.com, but for the upper tier employment market. Smaller to medium sized companies that lack certain high-end expertise can post up a job for professionals they could never hope to hire.
"That could be for a job advising for one hour or for a six-month project," Loudon explains.
Loudon, who had the initial idea, realised some time ago that corporate employee numbers were being thinned post-GFC to boost corporate bottom-lines, releasing hundreds - if not thousands - of highly credentialled professionals in the process.
Many of the recently departed set up consultancies and advisories. These experts lacked a platform on which to showcase their talent while smaller companies had a permanent craving for their kind of big-end-of-town expertise.
And so the Expert360 platform was born. Customers post projects and experts apply for them. There are no parameters. It is effectively a recruitment agency for short-term white collar contracts.
So how did they get the money?
"You have to talk to investors very early and look for people who are smart and strategic," Loudon says.
"This is something we wanted to make truly global. We had to identify where to go to get the brains for the technology which will run the platform. We were able to find a backer in New York and two in Asia, investors who understood the technology and knew how to scale."
Loudon says they also looked at their own personal networks. That is, people who understood this kind of venture, mentors they had worked with and former clients with whom they had a relationship.
There were also local angel investors who, she says, quickly bought the idea. In all the A$1m seed money was gleaned from just 10 investors. It was heavily oversubscribed.
"You can't let the fund-raising drag out - you have to go at it hard," Loudon says. "If the people you approach feel they're being shopped around they become wary."
Loudon and Yue were management consultants for three years at Bain. Yue had a commercial and legal background and worked most recently for the Smith Family. Loudon says she has some entrepreneurial background - she had a small apparel distribution business which she sold off while at university. Both say they have always yearned to do their own thing.
The company, trading for just six months, claims it can already access more than 3000 top experts ranging from former ASX CEOs through to "deep subject matter experts" across 34 countries in Australasia, North America, Europe and the Middle East.
Loudon says the worldwide market for this kind of venture is about A$30 billion. Behind the A$1m capital raising is an awareness that Expert360 will have to build enormous scale for this to work across continents.
While Loudon says that the company is already experiencing triple digit growth after six months - it would have to be from a very small base. Angel investors are looking for extremely fast growth year on year and eventual returns of at least 10 times their initial investment after three years.
"They're banking on one or two big ones," Loudon says. "We believe we can give those kinds of returns. The plan is to raise another round of investment down the track in about two years and possibly an IPO - but we have no time line on that."
While comparisons with the recently listed Freelancer.com are inevitable, Yue says Expert360 is a far more "curated community". Both she and Loudon are proactively involved in match-making buyers and sellers of expertise as well as thoroughly vetting potential talent.
Backers like to see cash-flow and here there are similarities with Freelancer.com.
"For each project we take a clip on the way through. It varies but it also decreases with volume for companies who require an expert for a lot of work or for a longer period. What we can say is that our commission is far less than what recruiters take," says Loudon.
- Sydney Morning Herald
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