Yeah, that doesn't seem like a very good deal to me either. Standard terms I'm seeing here in the Bay area are seed rounds of $500K-$1MM on a cap of around $4MM. Even if you halve these numbers for the Aussie market and see $250K on a $2MM cap (12.5%), having 2.5x of equity sold for a third of the amount of money seems like a pretty crappy deal. And while I'm sure there are some startups out there (somewhere?) that would be excited by going to market with a large, bureaucratic partner, I can't see 7.5x worse deal attracting any decent startup :-(
That being said, Westpac getting involved shouldn't be roundly rejected, even if the model doesn't look very attractive right now. It could be compelling if the startup can buy the equity back at Westpac's commercial interest rate in the first 24 months. This page <http://www.westpac.com.au/business-banking/business-loans/tools-calculators-rates/business-loans-interest-rate2/> shows the small business growth rate at 7.01%, so if the founders can buy their equity back for $86.25K it could make sense - Westpac would also get some smart tech people trying to solve problems that they and their customers care about, and would be in the driver's seat to invest in the first properly priced round, and if all of the investments are duds they can be written off as equity invested without return as opposed to a bad debt. On Tue, Jan 6, 2015 at 4:35 PM, Jason Seed <jasoncs...@gmail.com> wrote: > I did not dive deep enough, either way this does not build a startup > > Jason Seed > 650 454 5311 > > On Tue, Jan 6, 2015 at 3:37 PM, Michael Ridland <rid...@gmail.com> wrote: > >> >> It says you don't need a tech team, this might be good for a biz person >> with just a good idea. >> >> >> On Wednesday, January 7, 2015, Jason Seed <jasoncs...@gmail.com> wrote: >> >>> NO. >>> >>> Thats not a startup incubator/competition, that is devs for hire at >>> Ramen Soup rates. >>> >>> Jason Seed >>> 650 454 5311 >>> >>> On Tue, Jan 6, 2015 at 3:20 PM, Colette Grgic <colett...@gmail.com> >>> wrote: >>> >>>> Also unusual to have such a large a corporate offer to scale your >>>> product to their staff and/or customers, no? >>>> >>>> Two startup problems (aside from tech co-founders woes!) we all hear >>>> about incessantly is 1.) lack of funding and 2.) that's it's hard to get >>>> traction and critical mass. Despite the "being global from day one" >>>> statements the reality is it's particularly challenging in Australia where >>>> we're a small population. That's the reason why Disrupt@Scale exists - >>>> to solve those problems and provide more avenues to scale and more options >>>> for startups to succeed (four, in this case). This particular corporate is >>>> able to adopt and push the right product/ technology very far very quickly; >>>> the valuation isn't unreasonable for the money, support and the scaling >>>> opportunity the startups get. It's just the first :-) >>>> >>>> Like every other program/ incubator/ funding/ bootstrapping/ >>>> competition/ hackathon it isn't the right fit for all. Nor should it be. >>>> But it could very well be the difference between success and failure for >>>> some, and that's what we're aiming for. >>>> >>>> -- >>>> -- >>>> You received this message because you are subscribed to the Silicon >>>> Beach Australia mailing list. 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It is expected that you introduce yourself. >> 2) No jobs postings. You can use http://siliconbeachaustralia.org/jobs >> >> >> To post to this group, send email to >> silicon-beach-australia@googlegroups.com >> To unsubscribe from this group, send email to >> silicon-beach-australia+unsubscr...@googlegroups.com >> For more options, visit this group at >> http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en >> >> --- >> You received this message because you are subscribed to the Google Groups >> "Silicon Beach Australia" group. >> To unsubscribe from this group and stop receiving emails from it, send an >> email to silicon-beach-australia+unsubscr...@googlegroups.com. >> For more options, visit https://groups.google.com/d/optout. >> > > -- > -- > You received this message because you are subscribed to the Silicon Beach > Australia mailing list. Vist http://siliconbeachaustralia.org for more > > Forum rules > 1) No lurkers! It is expected that you introduce yourself. > 2) No jobs postings. You can use http://siliconbeachaustralia.org/jobs > > > To post to this group, send email to > silicon-beach-australia@googlegroups.com > To unsubscribe from this group, send email to > silicon-beach-australia+unsubscr...@googlegroups.com > For more options, visit this group at > http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en > > --- > You received this message because you are subscribed to the Google Groups > "Silicon Beach Australia" group. > To unsubscribe from this group and stop receiving emails from it, send an > email to silicon-beach-australia+unsubscr...@googlegroups.com. > For more options, visit https://groups.google.com/d/optout. > -- *Geoff McQueen* *Founder & CEO* __________________________________________________________________________________________________________________________________________________________________________________________________ <http://www.affinitylive.com> Office: +1 800.425.7315 Cell: +1 650.450.4384 Skype: geoffmcqueen -- -- You received this message because you are subscribed to the Silicon Beach Australia mailing list. 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