- Tech & Gadgets
- BRW. lounge
Published 26 January 2012 10:03, Updated 27 January 2012 07:14
Taking off to the United States to build your start-up is not uncommon but disregarding Silicon Valley in favour of New York is certainly not the norm. Nonetheless, the chief executive of KAYWEB Angels, Haig Kayserian, is taking a bite out of the Big Apple.
The 29 year old sold his first start-up, a sports news website, in 2004 and then set up website design and development business KAYWEB. On a trip to New York in November 2010, Kayserian was looking for an office to expand his business but came away with an idea to start a seed investment start-up company that focused on New Yorkers instead.
A meet-up event that Kayserian attended sparked his idea. It aimed to match entrepreneurs with technical founders. “There were 400 people in the room,” he says. “I thought ‘there’s got to be something here for me’.”
Kayserian says New York – the so-called Silicon Alley – is a “real challenger” to Silicon Valley, when it comes to start-up companies but it is “really struggling for developer talent”.
Unlike a venture accelerator or incubator, which provides seed funding in return for a stake in the business, KAYWEB Angels provides technical development and mentorship in exchange for equity. The development of software, websites and applications is undertaken by KAYWEB employees, generally in the company’s office in Manila, The Philippines. Crucially, it is not development for the lifetime of the start-up. The non-technical founder – the person with the idea – and KAYWEB agree on an initial stage of development to be completed.
Since establishing KAYWEB Angels in February 2011, Kayserian and the other shareholders in KAYWEB, which include a technology analyst, a start-up lawyer and another entrepreneur, have invested in six companies. The outfit has taken stakes of between 15 and 40 per cent in the start-ups. A seed fund or start-up incubator would generally take less than 10 per cent but Kayserian says “[15 to 40 per cent] is the expected equity outlay by most entrepreneurs seeking a technical co-founder for their web or mobile start-up. We at KAYWEB Angels fulfil that role.”
He estimates the cost of development provided so far has ranged from $150,000 to $300,000 per company.
Although Kayserian’s focus is on New York, he is open to Australian founders to apply for the next round, which closes on February 29. The group’s inaugural investment was in Whoisgreen.com, a niche social media and green business directory, founded by David Burns, an Australian environmental chemist with a passion for building sustainable homes.