Digital entrepreneur goes global

Simon Baker has an interest or is advising a business in every continent “except for Antarctica.”

The entrepreneur made his name as chief executive of the REA Group – which operates realestate.com.au  – but hasn’t slowed down at all since he left the role in 2008.

Baker’s achievement at REA was to take the market value of the company from $8 million to a high of over $900 million inside seven years.

Since then he has been one of Australia’s, and perhaps now the world’s, most active digital entrepreneurs, investing in fast developing companies through his company CAV Investment Holdings and fostering start ups through his incubator program, Classified Ad Ventures.

“The online space and in particular real estate are areas that I know very well and I am very keen to use that knowledge in a variety of markets,” says Baker.

“I’m investing in companies in Brazil, Spain, Peru, South-east Asia and the thing is that everybody pretty much does things in the same way, but the difference really is where they are in the cycle of growth.

“I’m interested in seeing where a business is positioned in its market and I like to get involved in executing the business plan in a clear and concise way.”

Some of CAV Investment Holdings success stories include the listed iProperty group, where Baker bought in at 12 cents and has seen the shares hit a high of $1.30, and online culture portal ArtsHub, which has tripled in value to around $10 million since he became involved.

“When I invest in a business through CAV Investment Holdings I like the business to have done something already,” he says.

“I like them to already have customers, and revenue, have some level of funding and a strong growth path.

“They also need to have a good team in place, and I check people out really thoroughly because it doesn’t matter what you are investing in because if the people aren’t any good then you have a problem.”

At Classified Ad Ventures, Baker says the focus is on startup companies “with ideas I am more closely familiar with.”

“We are incubating some ideas about online real estate, and we roll the dice because we are starting from scratch,” says Baker.

“Between investments and incubation, I have invested in about 15 ventures and while it is still early on some of them, six have done very well. The reality is that not everything will be a success and you have to understand and be comfortable with that.”

In some cases, Baker says he has had to write off his investment and “take some learnings out of the experience.”

“I’ve written off three investments and in reviewing the original investment decisions, have gained a better understanding about the sectors to invest in, what makes a quality business plan, and what to look for in people.”

Baker says he gets a fresh business plan across his desk “almost every day.”

“But what kills a lot of them very quickly is the valuation,” he says.

“As an investor I am not interested in high valuations, I am interested in reasonable entry prices, the potential of a good return (10x) and in the long term projections.

“The reality is that the hockey stick type of optimism rarely comes off and you have to be cautious of that kind of optimism, while still remaining excited by the project.”

Baker remains undeterred by those few write offs and is committed to continuing his entrepreneurial journey, which began in Australia and has gone global.

“I’m still very excited about getting involved in new businesses and I’m very keen do make sure I don’t lose that passion,” he says.

“I’m enjoying taking all the learning I’ve had and joining with people in creating some real value, and also having a fun journey along the way.”

Simon Baker has joined Wholesale Investor to present investment opportunities in Melbourne on October 23 and in Sydney on October 24.

To register and for more information, please click here.