Podcast

Angel Investing in Australia with Aussie Angels CEO Cheryl Mack

Cheryl takes us through her journey from Toronto to becoming a key player in Australia’s startup scene.

by hao-nguyen on May 29, 2024

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Cheryl Mack, CEO of Aussie Angels, smiling with arms crossed against a city skyline at night on the Give It A Nudge podcast

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About the guest

Cheryl Mack

CEO at Aussie Angels

Canadian-born, Australian-raised startup operator and angel investor. Cheryl ran StartCon, growing it from 1,500 attendees to 4,000. She held community leadership roles at the Australian Computer Society and Stone and Chalk before co-founding Aussie Angels, the syndicate platform that now manages around 50 syndicates with 1,500 investors. She also runs the 361 Angel Club and mentors founders through Startmate.

Episode overview

Cheryl Mack, CEO of Aussie Angels, sits down with Steve Grace to talk through her path from Toronto to the centre of Australia’s angel investing ecosystem. The conversation covers her early career running events at Freelancer.com, the wild ride of scaling StartCon to 4,000 people, and the problem that led her to build Aussie Angels: new angel investors kept getting locked out of the best deals.

From Toronto to Sydney’s startup scene

Cheryl grew up in Toronto and studied in Vancouver, working for startups straight out of university. She moved to Australia in January 2015 and was struck by how small the ecosystem was at the time. She started the Sydney chapter of Startup Grind, which landed her at a dinner with some of Australia’s biggest tech founders. Matt Barrie, founder of Freelancer.com, was sitting across from her. The next day he handed her an unprofitable event called SydStart and told her to fix it. She turned it into StartCon.

“The first year we ran it, it was like 1,500 people showed up. And the last year I ran it, about four or five years later, 4,000 people showed up.”

Cheryl Mack on growing StartCon [05:00]

Why she built Aussie Angels

Cheryl started angel investing about five years ago and quickly ran into a gatekeeping problem. As a new angel, she was told her cheques were too small and she did not add enough value. A couple of years later, other new angels were coming to her with the same request, and she caught herself giving the same dismissive responses. That friction became the founding insight for Aussie Angels. She initially built it as a not-for-profit, but once 12 syndicates were on the platform she realised it needed capital to scale, so she raised on her own platform.

“This is crap. I shouldn’t be the one gatekeeping this. I was in this position like a year and a half, two years ago, and it sucked. I don’t want to create that for other people.”

Cheryl Mack on the moment she decided to build Aussie Angels [13:00]

How the platform actually works

Aussie Angels manages around 50 syndicates and micro funds. Investors browse themed syndicates (climate tech, female founders, B2B SaaS, startup infrastructure) and apply to join. When a syndicate lead invests in a startup, they share their investment notes and let members put in cheques as low as $5,000, compared to the typical $25,000 minimum for direct angel deals. Founders do not list on the platform directly; they approach syndicate leads, who decide whether to invest and share the deal.

Australia’s startup ecosystem and where it is heading

Cheryl and Steve discuss how COVID accelerated the Australian startup ecosystem, compressing roughly 20 years of US growth into five or six years. In 2023, Australia minted zero new unicorns after producing about 20 during the 2020-2021 boom. Cheryl believes the correction is temporary. There are more companies at Series A than ever, seed funding is easier to access because so many funds still have dry powder to deploy, and the belief that Australian startups can go global has permanently shifted.

“Do I believe that Australia is going to be the place that’s going to create the next foundational model or large language model? Probably not. But do I believe that there are a number of businesses that can use their unique expertise to build on those building blocks to create something unique that drives value? Absolutely.”

Cheryl Mack on AI investment opportunities [24:00]

Key takeaways

New angels get locked out of good deals, and syndicates fix that. Adverse selection means the deals available to newcomers are often the ones experienced investors have already passed on. Syndicates let you invest alongside people with better deal flow.

Starting a syndicate in Australia costs around $100K upfront and $100K a year. That cost barrier is why Cheryl built Aussie Angels as shared infrastructure that any syndicate lead can use.

You can write angel cheques as small as $5,000 through Aussie Angels. Direct startup investment typically requires a $25K minimum. The lower entry point lets new investors diversify across five companies instead of betting everything on one.

Aussie Angels facilitated about 8% of all Australian startup deals last year. That was roughly 35 out of 400 deals done nationally, during what Cheryl described as the quietest funding year she had seen.

Australia compressed 20 years of US ecosystem growth into about five years. Cheryl arrived in 2015 to find barely any events and a handful of investors. By 2024, the ecosystem had 1,500 angels on her platform alone.

COVID permanently changed how Australian founders think about scale. The shift to remote work made people realise they could hire overseas, take international meetings, and build global companies from Sydney or Melbourne.

The best way to start angel investing is to talk to someone who already does it. Cheryl recommends reading books, taking a course, and finding an experienced angel who will share their approach. She opens her own calendar to new angels who want to ask questions.

Chapters

00:00Introduction 00:54Growing up in Canada and moving to Australia 02:30Running Startup Grind and meeting Matt Barrie at Freelancer.com 04:30Turning SydStart into StartCon 06:30The stolen unicorn story and building unique conference experiences 08:30Convincing the racecourse to open the Chairman’s Lounge 09:50ACS, Stone and Chalk, and the impact of COVID 12:00How COVID grew the startup ecosystem 13:30The origin of Aussie Angels 16:00Why starting a syndicate costs $100K and how Aussie Angels fixes that 17:3050 syndicates, 1,500 investors, and 8% of the market 18:30How the platform works for investors 20:30How founders access Aussie Angels 21:30361 Angel Club: 60 founders and 60 investors in one room 23:30AI investment trends and separating real value from vaporware 25:30Australian unicorns, Series A growth, and the funding outlook 28:00Advice for new angel investors and Mack’s Resources

Mentioned in this episode

Aussie Angels Freelancer.com Mack’s Resources Stone and Chalk Startmate Atlassian The Nudge Group

Frequently asked questions

What is Aussie Angels and how does it work?

Aussie Angels is an Australian angel syndicate platform that manages around 50 syndicates and micro funds with approximately 1,500 unique investors. Investors browse themed syndicates (such as climate tech, female founders, or B2B SaaS), apply to join, and then get notified when a syndicate lead makes an investment so they can put their own cheque in alongside.

How much do you need to start angel investing on Aussie Angels?

Investors can write cheques as small as $5,000 per deal through Aussie Angels. By contrast, investing directly in a startup typically requires a minimum $25,000 cheque. The lower minimum lets new angels spread their capital across multiple companies for better diversification.

Do you need to be a sophisticated investor to join Aussie Angels?

Yes. To invest through Aussie Angels you must be classified as a sophisticated or wholesale investor under Australian law. That means meeting the net wealth test, having significant investing experience, or managing an Australian Financial Services Licence.

How expensive is it to start an angel syndicate in Australia?

According to Cheryl Mack, setting up a traditional angel syndicate in Australia costs around $100,000 upfront, with another $100,000 per year to maintain. Aussie Angels was built to remove that barrier by providing shared infrastructure that any syndicate lead can use.

What is the best way to start angel investing in Australia?

Cheryl recommends three steps: read books on angel investing (she has a free reading list at macksresources.com), take an introductory course like the one Aussie Angels runs, and find an experienced angel investor who is willing to talk through their approach. Joining a syndicate is a practical way to access better deal flow early on.

Topics discussed

Angel InvestingStartup EcosystemSeed FundingVenture CapitalCommunity BuildingAustralian StartupsDeal Flow

About the host

Steve Grace is the founder of The Nudge Group, a startup and scale-up recruitment agency. He hosts Give It A Nudge, where he interviews founders, investors and industry insiders about building and scaling businesses. Steve started Nudge five months before COVID and turned the show into one of the best things the company ever did.

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