Artesian's revolutionary Venture Capital as a Service (VCaaS) platform services the increasingly complex needs of organisations dealing with the financial and strategic challenges and opportunities presented by thousands of potentially disruptive startups.
Artesian's VCaaS platform provides corporations, industry groups, government organisations and family offices access to transformational startups, delivering distributed research and development, financial and strategic returns, collaborative partnerships, co-investment opportunities and a pre-screened and de-risked M&A pipeline.
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To invest in venture capital, investors have traditionally:
1. Managed their own money:
This requires larger amounts of capital, access to qualified deal flow and expensive & sophisticated back office resources; or
2. Invested in funds:
This means minimal mandate control, limited co-investment opportunity, closed-end fund structure and no investment committee participation
But now there is another alternative:
3. Venture Capital as a Service (VCaaS):
This can be a fully outsourced service, or it can be a a platform providing organisations with the opportunity to complement existing, or build new, in-house VC capabilities.
VCaaS delivers financial & strategic (distributed R&D) return, as well as scale, context and focus, providing the client with a pre-screened & de-risked pipeline of qualified late stage startups for direct investment
"You can systematise innovation even if you can't completely predict it"
Eric Schmidt - Technical Advisor & Board Member Alphabet Inc.
To access the financial and strategic returns of the innovation ecosystem a collaborative, scalable & systematised approach to early-stage investment is required
There are hundreds of startups working on every vertical-related innovation. Scouting for the optimal opportunities requires global resources & well-established networks
Due to the volume of startups to be assessed, scouting processes must be highly scalable to
filter the best opportunities from the firehose of possibilities.
We build & operate bespoke funds for clients, investing in startups delivering strong financial and strategic returns, and qualified growth-stage co-investment opportunities
We will also work with clients to select, invest in and manage co-investment opportunities arising from the deal pipeline generated via other VC/PE funds in which they are an LP.
Issues, Challenges & Solutions
Democratization of Startups & Innovation
With lower cost of starting up technology innovation can occur anywhere
There are tens of thousands of startups working on any particular vertical’s related innovation globally
Global scouting requires global resources and networks
Difficulty in identifying & accessing startups relevant to specific mandate requirements
An institutional deal sourcing & filtering process leveraging extensive global startup & innovation networks
Early Stage VC Provides Critical Distributed R&D
The driver for investment in most asset classes, including late stage VC, is a strong risk-adjusted return
Uniquely, a diversified portfolio of early stage startups delivers both a strong risk-adjusted return and a strategic return - distributed R&D
How does an organization understand competitive risks & opportunities of the opaque startup sector
Gaining access to the global innovation network which can deliver strategic insights & analysis regarding emerging technology & industry trends
Asymmetrical Skew of VC Investment Risk
90% of returns are generated by the top 10% of startups
Early stage VC investing requires a scalable strategy that avoids uninvestable startups and invests broadly in the best 10%
Employ an option strategy - time is the best due diligence for early stage startups
Different techniques and strategies are required for early, versus late stage, vc investment
A scalable, process driven early stage VC strategy employing an option approach to mitigate early stage VC investment risks
Prohibitive Resource Requirement
Early stage VC requires small amounts of investment capital but large amounts of resources
Global reach and regional specialization and contacts are critical in gaining full visibility of emerging technology trends and themes
How does an organization tackle scaling issues required to understand global startup activity
An outsourced platform delivering aggregated cost benefits and a pre-screened & de-risked pipeline for later stage direct investment
Late Stage Co-investment and M&A Pipeline
Organizations are generally more willing to invest in a startup once it has demonstrable performance
A qualified early stage pipeline provides access to deals as well as comparative data to make better informed later stage investment decisions
How does an organization make better informed, later stage, investment and M&A decisions
Via a diversified portfolio of early stage startups organizations can mitigate internal & external obstacles to direct investment and M&A activity
Headline, Moral Hazard & Signalling Risk Mitigation
Incumbent organizations face a number of acute reputational risks when dealing with startups. It is not uncommon for startups to:
blame incumbents for failures/not reinvesting
act in aggressive or unethical ways which may reflect badly on the incumbent
How does an organization mitigate the risks associated with minority stakes in a range of early stage ventures
Employ an arms-length, outsourced investment vehicle that operates with relative autonomy, and perhaps a separate brand, to the organization
Artesian delivers bespoke services dependent upon the
scope and requirements of the VCaaS client
Existing VCaaS Mandates
Artesian has a range of existing VCaaS mandates
across different regions and verticals
Vertical: Clean Energy
Overview: The CEFC is responsible for investing $10B in clean energy projects on behalf of the Australian Government
Product: $26M early;-stage VC fund investing in
Australian clean energy and climate technology startups
Partner: SA Govt.
Overview: Enabling innovative SA ventures to secure funding, accelerate growth, stimulate economic activity and job creation
Product: $50M Series A/B VC fund investing in
helping build dynamic & innovative South Australian companies
Overview: Coca Cola EuroPacific Partners is one of the world’s leading consumer goods companies
Product: A bespoke early-stage VC fund focused and a pre-screened & de-risked M&A pipeline
Overview: Investing in research, development & extension to create enduring profitability for Australian grain growers
Product: $50M Early Stage VC fund investing in startups delivering innovation for the Australian grains industry
Overview: Leading Australian agribusiness and processing company partnered with growers & producers for > 100 years
Product: $30M VC fund focused on startups shaping the future of Australian agriculture & food production.
Overview: Provides quality funeral, cemetery and related products and services to families at a critical time in their lives.
Product: Bespoke scouting, due diligence, and investment in high growth ventures delivering innovation in the industry.