A close-knit group of Australia’s technology startup elite has formed a new seed fund that will offer small investment rounds and up-close mentoring to local technology startups, in a similar model to famed US incubator Y Combinator.

Dubbed Startmate, the fund has been created by Homethinking founder Niki Scevak — who has also been involved in a number of other startups such as the BookmarkBox. The fund surfaced today at the Tech23 event held in Sydney, which highlights 23 up and coming companies and connects them with investors, mentors and the press.

The list of those involved in the fund — contributing money and advice — reads like a who’s who of Australia’s startup sector. Former Realestate.com.au chief Simon Baker is also involved, as well as the two founders of local firm Atlassian, which recently took $60 million in funding from US VC firm Accel Partners – Mike Cannon-Brookes and Scott Farquhar.

Bart Jellema, who recently sold his company Tjoos, is involved, as well as Ryan Junee, whose company Omnisio was bought by YouTube. Mick Liubinskas, the co-founder of local startup consultancy Pollenizer, is involved as well as Phaedon Stough, the managing partner of recruiter MitchelLake. And there’s one venture capitalist — Bill Bartee, a general partner at Southern Cross Venture Partners.

And that’s not the whole list — there are many more entrepreneurs involved.

According to one – Alan Jones, the founder of Doing Words, who is also involved with Pollenizer and has worked for a host of other online companies, Startmate will invest $25,000 each in local startup companies that it approves, with the process to kick off in January.

“It’s a Y Combinator model – very early stage – for people whose credit card is about to max out,” Jones said in an interview today from the sidelines of Tech23.

Successful applicants will gain access to the extensive experience of the fund’s mentors, and will go through a development process. And there are demonstration days being planned both in Sydney and in San Francisco – with the fund to fly its companies to the US to present.

The fund will take an equity stake in the companies it invests in, but not a set amount, with Jones noting it was difficult to speculate on what it could be for each company, although it wouldn’t be a controlling stake.

Y Combinator similarly makes small investments in companies – rarely more than $20,000, and takes small stakes of between 2-10 percent. Applications for the first round will open in October this year and close in mid-November, with five initial startups to make the grade.

“We’re not looking to make this a massively profitable enterprise for us,” said Jones. “It’s just something we’re going to do that we think the industry needs.”

The fine details of how the fund will be structured are still being worked though – with Jones joking that Startmate’s web site doesn’t even have a logo yet. But like the startups it will foster, it will seek to operate on a “lean” model, which Jones said was probably the way forward for the majority of local startups.

“The biggest risk in a startup is not whether someone will steal your idea or if you can build a product but rather that no one will care,” states the site. “Startmate is designed to help you win your first customers and work through the initial stages of customer discovery.”

Image credit: Nathan Sudds, royalty free