Students are getting into VC with NextGen Ventures to back uni-founded startups

Australian universities are creating extraordinary startups founded by students that are changing the world.

Think tech giant Atlassian – cofounders Mike and Scott met at UNSW – to more recent successes such as gaming platform Immutable, diagnosis medtech Harrison.ai, and drone deep tech venture Propeller Aero.

Now students are taking charge of the investment side of startup growth with Australia’s first student-run VC fund NextGen Ventures.

The fund is the brainchild of Mitchell Hughes, a Monash University student who become enmeshed in the uni startup ecosystem two years ago, surrounded by friends and classmates who wanted to be founders and entrepreneurs

What he noticed as a problem that needed solving was  an on-ramp of adequate support infrastructure from university to the broader startup ecosystem.

After a chat with his venture capital lecturer, Hughes was encouraged to rally a small team to explore how others around the world back student founders using student-run VC funds.

He kicked off with classmate Ikya Thearam, who is studying a Bachelor of International Business, researching the possibilities and by early 2023, they were a team of four.

Former University of Melbourne biomedicine student Jerry X’Lingson met the duo during the Statemate Fellowship and signed on as investments principal last April. He’s now head of investments.

They’ve kicked off 2024 with 15 student investors across six universities in three states, with Chris Gilling from Cut Through Venture among their mentors.

Hughes said the NextGen Ventures model provides a practical experience to become a ‘student VC’ over 12-24 months, with a VC Bootcamp, created in collaboration with 6 VC firms, and ownership of the investment process to the investment committee point.

“Investing into student-founded startups is an untapped opportunity in Australia, one that few investors have identified, understood, or accessed. We have the unique ability to have students on campus, understanding how each complex university ecosystem works, and empowering student founders before anyone else,” he said.

“We are committed to assembling a student team as varied and inclusive as the founders we aim to support, reflecting the broad spectrum of perspectives and backgrounds we wish to see throughout the wider ecosystem.”

Fundraising for NextGen’s venture fund is now underway.

X’Lingson said NextGen Ventures is the product of combining students who want to learn more about venture capital by ‘doing’, with young innovators needing more support than ever to turn their dreams into reality.

“There has never been a more qualified team to find and empower the most ambitious startups on Australian campuses. We recruit a diverse set of curious and connected students from leading Australian universities,” he said

“Then put them through an intensive five-weeks of training, in partnership with Airtree, Skalata, Galileo, Rampersand, Investible, and more. With support from our partners, VC mentors, and high-performance coaches, the team operates with genuine industry competence.”

X’Lingson said they’re looking to  work with investors who not only seek financial returns, but want to nurturing the next wave of innovators at the grassroots level.

“Invaluable experience and extensive networks, when combined with our novel approach as a fund, can create a powerful synergy that will truly transform the Australian student-founder landscape as we currently know it,” he said. 

“Australia’s talented youth are genuinely ready to take on the global stage. The ball is in our court to help get them there.”

Last week NextGen released a report which concluded that student-founded Australian startups raised more than $1.2 billion since 2012.