Entrepreneur Domenic Carosa is back in business. And he is taking a different approach after his disastrous experience with digital media and marketing firm Destra, the company he founded that is now in administration.
Entrepreneur Domenic Carosa is back in business. And he is taking a different approach after his disastrous experience with digital media and marketing firm Destra, the company he founded that is now in administration.
Carosa has taken over the listed Future Capital Fund and intends to take it private, using the fund to invest in internet start-ups.
The Future Capital is a pooled development fund listed on the Australia Pacific Exchange. “It enjoys a number of tax benefits including income being taxed at 15%,” he says.
“We now control 90% of the fund, which means we can control the remainder of the shares.”
Carosa says there is $600,000 in the fund and they are in the process of raising another $500,000. “We’ll start with $1 million in the fund. And we’re talking to a number of high profile investors who are looking to invest.”
The core focus will be internet startups. “We will be a mix between a venture capital firm and a private equity firm,” he says. “We’re more of a venture accelerator who will put in some money to help grow the business.”
But he is looking for “upstarts” as opposed to start-ups. “We want companies that are between 12 to 24 months old with existing customers and revenue that are borderline profitable – or profitable. That is far less risky than a startup but the upside can be enormous. We want to help grow the business for one to four years before a trade sale and make anywhere to make four to six times multiple on money invested.”
The aim in the next 12 to 18 months is to raise another $2 million to $3 million and then long term to raise about $20 million and list it on the ASX.
He says they are looking for three to five investments mainly in the media and domain space. “We are looking for companies that have a multiple revenue streams of advertising and subscriptions; companies with the advertising and transactional model built in.”
He says that although there is a downturn, it is an excellent time to be pursuing opportunities.
“In my view this is the best time to be investing and acquiring company valuations across the board. Remember, you make money not when you sell but by how well you buy.”
He says the internet is counter cyclical. “There might be a slowdown in online advertising but nothing compared to the slowdown in traditional media,” he says.
“We have a number of potential opportunities in the pipeline but are looking for more.”
He says that although there is a downturn it is an excellent time to be pursuing opportunities. Some might also come from his old company Destra, now in administration.
Digital media and marketing firm Destra was placed in administration after major shareholder Prime Media Group and the company’s bankers withdrew support for the company.
Insolvency firm PBB will act as administrator, while St George Bank, which is owed $30 million by Destra, is believed to have appointed KordaMentha as receiver to the group.
Destra’s administrators and receivers will now begin a review of the business and will seek to continue the asset sales process.
Carosa has bought MP3.com.au from Destra, the company that dumped him as CEO in April.
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