SMSFs now have more opportunities to invest in Tech Startups

Self-Managed Super Funds are big. The SMSF Association estimate that about one third of Australia’s A$2 TRILLION in Superannuation funds is held by Australians in their SMSFs. In addition, it is the wealthy fund owners who have left the managed funds to set up their own SMSFs.

The reasons SMSFs are popular are very clear; you control your superannuation, and you can invest in a greater variety of assets – including residential property – an asset class that has risen over 40% in the past 5 years. 

However, the Reserve Bank of Australia has noted that the property market is at, or near, the peak and is likely to produce significantly lower returns over the next few years. Should you be worried? Many SMSF investors are now wary of investing in residential property, especially inner city apartments, and are turning their attention, and funds, to other asset classes, including the exciting world of technology start-up companies.

Australia’s tech startup sector has some famous poster children who have created high growth global companies very quickly; Atlassian, Freelancer, Campaign Monitor, OFX Group (was OzForex), 3P Learning (aka Mathletics), Redbubble and Tyro Payments are a few, with some delivering a 10,000%+ return to their initial investors. For example, Atlassian’s ‘Series A’ fundraising was A$1.4m; the company listed on US tech market NASDAQ at US$4billion, and is now worth US$6billion. You do the math.

Tech startups attracting the most attention are those that have a global vision because whilst the very nature of startups is riskier than traditional equities, the potential to scale globally offers huge potential returns for investors. 

One of the key issues tech startups face is access to ‘Seed Money’ – the first round of investment that helps the founders get the business up and running. Those without wealthy friends and parents typically look for $100k-$750k to get them the traction and growth they need to get to move to a ‘Series A’ round of finance where they (typically) secure large funds from Venture Capital firms to scale their business globally.

This is where our meetup group comes in – we have created a meetup that connects SMSFs who are looking to invest in the tech startup sector. Each meetup will showcase three globally scalable tech startups looking for seed money; each startup will be seeking a different amount of seed money, however the entry level investment starts from as little as $25k. For example, if a startup is seeking to raise (say for example) $250k, potential SMSF investors are offered a minimum investment ‘parcel’ of $25k – the startup can then vary the ‘parcels’ to make up the $250k.

Seed Money will showcase globally scalable tech startups.

Join our group here: https://www.meetup.com/Seed-Money/ 

Our meetup group is Free to Join, Free to Attend, and is Free to Pitch. 

Disclaimer: As with any investment, you should always research the companies you invest in, and get financial and legal advice. SMSFs must have an investment strategy that mandates where the SMSF can invest, and the SMSF must have sufficient funds or liquidity to pay its bills.

This common interest networking group does not endorse any start-up, or any investment, and is not recommending or suggesting an investment. There is a risk involved in all investing, and we strongly recommend that you seek professional financial and legal advice before making any investment.