The VC Market in Australia
Australia
There have been
many innovations and improvements in technology over the years that have been
funded by venture capital. Many of these ideas have lead to increased
productivity and higher living standards. Some of the most successful companies
in the global economy such as Google and Starbucks have been funded initially
by venture capital. While it is not the only source of funding available for
these startups, the venture capital provided by investors like Efraim Landa
is often what is needed to get a business up and running. Investing in new
businesses is always risky and successful companies like Google make it look
easy. The reality is that there is a lot of risk and hard work that needs to be
undertaken in order to protect investments and let them grow. Venture
capitalists provide the finance, at least initially, so that the ideas of
innovators and entrepreneurs can be developed and brought to market. In Australia, venture capital has helped create and
grow many innovative firms.
Foreign Investment
There has been much interest in Australia coming from abroad recently. Many venture capitalists based in the United States are looking to invest in technology start-ups in Australia. This mean that it is no longer necessary for Australian-based entrepreneurs to move to Silicon Valley in order to successfully get their ideas funded. Many Australian entrepreneurs in the tech sector have been attracting investments from abroad at both the early and middle stages of their companies.
History
One of the longest standing problems with venture capital in Australia has been a lack of funding, which has been caused primarily by a lack of private equity firms. In the early 1980’s, the Australian government took a pro-active approach to correct this problem by making funds more readily available to entrepreneurs. Tax incentives both at home and adverse situations abroad have made investing in Australia a profitable idea.
Australia in the Global Venture Capital Market
Globally speaking, the venture capital market is facing difficulties due to financial market volatility, economic instability, and regulatory issues. The changes that have occurred over the past few years as a result of these difficulties has seen the market consolidating on a global scale. Australia has been a part of this consolidation but with some increases at home. Fundraising amongst Australian venture capitalists increased during fiscal year 2012 despite the strong Australian dollar and unstable global economic conditions. A large portion of these funds came from investors overseas.
The Australian venture capital market, similar to that of the United States and Europe, continues to face substantial challenges with the lowest number of active venture capital managers completing deals in fiscal year 2012 compared to the previous 10 years. However, it was promising to note that fiscal year 2012 was the biggest fundraising year for Australian venture capitalists since fiscal year 2008, though the majority of the new funds raised had some level of support from Government programs. The key concern for the Australian market is how to find the money for venture capital funding. Super annuity funds and governments are increasingly unwilling to put up the capital and there is also competition for available funding from other sectors of the economy such as infrastructure. The Australian venture capital section is most likely heading for a downsizing given the current environment.
Government Money
The Australian Government has released a fresh $100 million round of venture capital funding as part of its plan to support the nation’s innovation efforts. The money is the latest round of the Government’s Innovation Investment Fund (IIF) program, which provides venture capital to innovative companies with high-growth potential at the seed, start-up or early expansion stages of development.
When innovative early-stage companies have access to adequate capital and to people, the chances of success are greatly enhanced. Venture capital programs such as the Innovation Investment Fund and Early Stage Venture Capital Limited Partnerships work with private venture capital fund managers to provide capital and professional expertise to innovative companies. Such programs help establish the capabilities required for a vibrant venture capital industry in Australia and leverage off the Australian Government’s large investment in public sector research to ensure that benefits from these activities flow to the Australian community.
Foreign Investment
There has been much interest in Australia coming from abroad recently. Many venture capitalists based in the United States are looking to invest in technology start-ups in Australia. This mean that it is no longer necessary for Australian-based entrepreneurs to move to Silicon Valley in order to successfully get their ideas funded. Many Australian entrepreneurs in the tech sector have been attracting investments from abroad at both the early and middle stages of their companies.
History
One of the longest standing problems with venture capital in Australia has been a lack of funding, which has been caused primarily by a lack of private equity firms. In the early 1980’s, the Australian government took a pro-active approach to correct this problem by making funds more readily available to entrepreneurs. Tax incentives both at home and adverse situations abroad have made investing in Australia a profitable idea.
Australia in the Global Venture Capital Market
Globally speaking, the venture capital market is facing difficulties due to financial market volatility, economic instability, and regulatory issues. The changes that have occurred over the past few years as a result of these difficulties has seen the market consolidating on a global scale. Australia has been a part of this consolidation but with some increases at home. Fundraising amongst Australian venture capitalists increased during fiscal year 2012 despite the strong Australian dollar and unstable global economic conditions. A large portion of these funds came from investors overseas.
The Australian venture capital market, similar to that of the United States and Europe, continues to face substantial challenges with the lowest number of active venture capital managers completing deals in fiscal year 2012 compared to the previous 10 years. However, it was promising to note that fiscal year 2012 was the biggest fundraising year for Australian venture capitalists since fiscal year 2008, though the majority of the new funds raised had some level of support from Government programs. The key concern for the Australian market is how to find the money for venture capital funding. Super annuity funds and governments are increasingly unwilling to put up the capital and there is also competition for available funding from other sectors of the economy such as infrastructure. The Australian venture capital section is most likely heading for a downsizing given the current environment.
Government Money
The Australian Government has released a fresh $100 million round of venture capital funding as part of its plan to support the nation’s innovation efforts. The money is the latest round of the Government’s Innovation Investment Fund (IIF) program, which provides venture capital to innovative companies with high-growth potential at the seed, start-up or early expansion stages of development.
When innovative early-stage companies have access to adequate capital and to people, the chances of success are greatly enhanced. Venture capital programs such as the Innovation Investment Fund and Early Stage Venture Capital Limited Partnerships work with private venture capital fund managers to provide capital and professional expertise to innovative companies. Such programs help establish the capabilities required for a vibrant venture capital industry in Australia and leverage off the Australian Government’s large investment in public sector research to ensure that benefits from these activities flow to the Australian community.