‘We’re Small But Mighty’: Flying Fox Ventures’ Rachael Neumann Talks VC, Opportunities and Ace Founders In the Pack
Rachael Neumann, like so many of us, wanted to play in a rock band. As a young teen, she had it all mapped out — a look, a name, even a label concept, Homespun Records. Problem was, she couldn’t play an instrument.
She can certainly play the venture capital game.
Neumann is co-founder of Flying Fox Ventures, the Melbourne-based VC that identifies and backs early-stage businesses and their bosses in Australia and New Zealand, giving them wings.
Educated in the United States with an undergraduate degree from Stanford University and two masters degrees from Columbia University, Neumann has invested in nearly 200 companies.
Along the way, she learned the ropes at the elite level as managing director of Eventbrite in ANZ, helping to scale the self-service ticketing platform across the world, before transitioning into a full-time investment role.
She’s still a music fan, it’s still in her veins.
“Where I see opportunities for software that can serve the music industry or popular culture, not only is that a space that I know and love, there’s a huge commercial opportunity as well,” she tells The Brag Media CEO Luke Girgis and group editor-in-chief Poppy Reid in the latest edition of Fear At The Top.
Neumann is “always looking for opportunities.”
Flying Fox is currently backing 54 companies, putting its faith in the “most promising and exciting founders and the businesses they’re building.”
The average cheque size in the first instance is $250,000 up to $600,000, then as runs mount on the board, follow-up cheques with six zeros. “We want to be the first institutional money that comes into a business,” she explains.
In a candid, hour-long chat, Neumann ticks off boxes on the difference between startup culture in the U.S. and Australia, what to look for, and what to run from.
“We believe that at the early stage there are two really important things for return. One is a lot of at-bats, because it’s a hits business, you need to create the conditions that you’re most likely to have outsize return. For us that’s having a large portfolio. We’re just going to keep getting bigger and bigger.”
The second is diversification. “We believe that in Australia we’re not ready to pick winners in certain industries. We also are watching what’s happening from a macro-economic perspective. And we want diversification to protect against one industry being disproportionately impacted. That means we invest across all industries. But what is in common is a heavy emphasis on B2B SaaS companies,” those software specialists where your customer is a business.
And what piques her interest? “We’re looking for founders that are able to articulate the customer problem in an incredibly clear and concise way. Ideally, that customer problem is in a large and growing global market. And there is something that is happening in the conditions today that is making this an unprecedented opportunity to be solving in this market.”
When a founder opens up, and lays out the product, “they’re showing me a proxy for their thinking and their design sensibilities.” Show Neumann the problem and a version of the solution, “it’s a winning combination.”
Watch the latest edition of Fear At The Top below.