Maxine Minter’s pre-Seed VC, Co Ventures, raises $5 million for Fund 1

Australia’s first dedicated pre-seed venture fund, Maxine Minter’s Co Ventures, has closed its first fund after hitting its $5 million target.

Co Ventures Fund 1 is the result of nearly two years of work by Minter, who started fundraising in September 2022, before announcing the launch of her fund in April 2023.

The support from venture partners and limited partners (LPs), both here and in the US, keen to back early-stage startups is a rare highlight amid the crop of 2023 vintage funds still hoping to hit their raise targets as investor appetites focused elsewhere.

It’s also a long way from Minter’s first $2,500 angel cheques in San Francisco, where she was based at the female-first co-working space  The Assembly,  before becoming a founding member of The Council, a community of investors, operators and exited founders sharing deal flow. She went on to run angel syndicates in Australia and California while coaching and advice at Co Lab, and continues to split her time equally between here and the US.

Minter’s voice is also familiar to many as the cohost of the First Cheque podcast with Cheryl Mack from Aussie Angels, sharing insights with founders on venture investment.

Co Ventures aims to back pre-seed tech startups with at least one Australian founder, and looking to scale globally, especially in the US, but eschews hardware, biotech or regulatory complex companies.

“We focus exclusively on the pre-seed stage, so we’re looking for companies anywhere in their starting journey and up until you start seeing signs of early product-market fit,” Minter said.

“The moments when customers start pulling the product from the company. This usually looks like the first couple of letters of intent LOIs or  MOUs, maybe a few early customers, before your first design partner as you’re building, or maybe you have an MVP in the market.

“Specifically, we want to work for gritty founding teams that are learning machines, passionate about their space, and aim to make a meaningful impact in the world.”

The Co Ventures cheque size is A$150,000 and they plan to deploy Fund 1 in around 33 startups at the rate of around one a month.

AI hype cycle

Minter believes the funding landscape during this financial year is likely to continue on its current trajectory, assuming further no major geopolitical disruptions, as risk appetite slowly rebuilds, and companies also shift from a spendthrift pandemic mindset of cheap money to a healthier financial focus .

“Right now, it feels like we’re in a ‘tale of two cities’—AI and non-AI. If you’re in the AI space, a ton of capital is available, with plenty of funds having AI-only theses,” she said.

“For more traditional software businesses, it’s still tough, which makes it hard for people to predict how the market is growing. Overall, if you average out across the market, the market is growing strongly, with a continual rebuild in sentiment, cheque sizes, and valuations since the low of 2023. I think we’ll continue to see that over the next 12 months.”

She also expects “a correction in the AI investment hype cycle as the market matures and investors formulate and solidify their theses around where value will accrue in the AI platform shift”.

Keep than in mind, former Web 3.0 investors.

The Co Ventures boss believes Australian founders have a great opportunity to capitalise on their existing skills.

“Australia’s got a strong services sector, and we’re stepping into an era where a big technological shift is opening up new ways to drive services productivity—something we haven’t seen since the Industrial Revolution,” Minter said.

“This is a huge chance to deploy Australia’s excellent technical and founder talent and pair it with the deep insights we have on building high-scale services businesses and building the generational companies that can change the productivity of the services sector for years to come.”

While Minter described AI as “a tale of two cities”, the VC tale of two countries – Australia and the US – will be more closely aligned, with Co Ventures at the forefront of a new trend as the local venture scene becomes more sophisticated, and the decade-old funds of leading VCs begin to wind up, exits emerge and reinvestment unfolds.

“I’m hopeful we’ll see more micro funds emerging alongside us in the Australian landscape, as they will add enormous value to companies. Micro funds are incredibly important for the ecosystem, especially in the pre-seed and seed stages,” Minter said.

“They do a great job filling the gap between bigger funds and individual angel cheques, providing that essential middle ground. This middle ground is also supported by syndicates, which are vital in giving smaller investors a chance to participate.

“Aussie Angels, for example, is doing a wonderful job of building the infrastructure that supports syndicates.”