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January 6, 2016

How to be a venture capitalist

Shane Cheek – a venture capitalist specialising in software start-ups – is a rare breed in Adelaide. Despite his uniqueness, the businessman is exactly the remedy recommended by many in Government to cure South Australia’s economic ills – but it’s not an easy task to face alone.

  • Words: Farrin Foster
  • Picture: Joshua Fanning

Venture capitalists are near mythical creatures in Australia. A strange mix of investor, mentor and fund procurer – they’re more comfortable in places like Silicon Valley, where big ideas and big bank balances create the right environment for fluid flow of cash.

But if Australia is to get more out of our abundant natural resources by using intelligent approaches to add value, people like Shane Cheek – who seek out smart concepts and help them become commercial – are essential to our future.

Here, the Acumen Ventures founder and partner tells CityMag how he got into a field most of us only see on TV, and how SA might hope to have more people like him in the future.

Think big

“I did what’s called a Masters of Science and Technology – Commercialisation, which is a mouthful, but really just means a tech-focussed MBA,” says Shane. 

“That was at Adelaide Uni, but at the time it was a joint program with the University of Texas in Austin.

“I think Australians are really keen to talk ourselves down at times. That became very obvious to me when I was studying in Austin and the professor went around the class and asked ‘why are you doing this masters class?’

“Almost every American student said they were here to reset their mind… and build a billion dollar company. They weren’t self conscious about making that statement. That really reset my thinking about what was possible.”

Be silly

“There aren’t many who would be silly enough to do this. I had my own start-up business that I sold, and having a venture fund is starting another business in its own right. And we had to go out and convince investors to invest into us… so that’s been a two and a half year journey for us,” says Shane.

“People ask – Why you? Why now? Why can you do this from SA when everyone else who is doing it is in Sydney or somewhere else in the world?

“But I think if anything is going to change in SA then we need more local investors … who want to take some risk and who want to reinvest in the community.”

Look beyond your borders

“I think the next big opportunity is not going to come just from Sydney or from Silicon Valley, it could come from everywhere – so you have to be travelling to find it,” says Shane.

“We’re seeing opportunities pop up in places you wouldn’t expect. Even Vietnam is now a hot bed of tech innovation – largely because I think from Year 4 onwards it’s now compulsory for all students to learn computer science.”

Don’t be conservative

“As a venture capitalist, I know that if I invest in ten projects I should expect a couple of them to completely fall over, and that’s ok. In the aggregate you’re hoping that it performs,” says Shane. “And often the best ideas start out looking really strange.”

Make friends

“We’re really hands on with the companies and the entrepreneurs we back… and because we’re usually backing people who haven’t done it before, there’s a wealth of learning we can share with them. What we don’t want to do though is think we can do a better job than them,” says Shane. 

“It’s all personally driven – you think about when we invest in a team or a company, we could be investing in that business for five, eight, even 10 years, it’s going to go through all sorts of ups and downs along the way, so we better actually like spending time with the team.”

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