The Future of Australian Venture Capital
 What will be the future of Australian Venture Capital? You just need
to keep your eyes and ears wide open as the “future of Venture Capital”
is making great buzz. Venture capital firms are excellent places for
start up businesses. This network aims to not only give entrepreneurs
the chance to connect with business angels with capital to invest, but
also with individuals who are familiar with the type of market that your
product or service is targeting.
Several venture capital firms have been established in Australia over
the past decade. Acknowledging the surge of Australian entrepreneurs and
successful start up businesses in recent years, many of them are looking
for more start-ups to invest in. The Australian Investment Network
features thousands of entrepreneurs looking to obtain either start-up
funding or expansion capital for their companies. They have matched
several hundred businesses with angel investors and angel groups who are
looking for investment opportunities.
The Australian Venture Capital Association (AVCAL) has been working with
the Australian government to create an international competitive
environment for investment in the Australian venture capital industry.
This AVCAL is the industry hub for members including investor groups,
banks, incubators, angels, corporate advisers, technology companies,
accountants, lawyers, government agencies and service providers that
help support venture funds and private companies.
Government Support in financing Innovation for economic growth
The Australian Government's support for the venture capital industry
revealed that the industry grew by a healthy 21% in the year 2001-02,
bucking international trends and providing a potential springboard for
further growth.
The third ABS Venture Capital survey found that at 2002, $6.9 billion
had been committed to venture capital investment vehicles, up from $5.7
billion in 2000-01. The Australian VC industry's viability is also shown
by a recorded profit of around $53 million for 2001-02.
This strong growth supports the assertion that Australia has avoided
much of the fall-out of the "tech wreck," especially in comparison to
the United States - where the venture capital industry has shrunk back
to below 1998 levels of investment, according to Thomson Venture
Economics.
The Government's recognition of the importance of this industry can be
measured by the high priority it has assigned to VC initiatives
including the $220 million Innovation Investment Fund, a $73 million
Pre-Seed Fund and concessions through the Pooled Development Fund. The
ABS survey noted that 56% of all venture capital vehicles are now
registered with a government-sponsored program such as the Pooled
Development Fund.
While the majority of VC in Australia is sourced domestically, the
Commonwealth Government has taken steps to address this imbalance by
introducing world's best practice amendments which bring Australia in
line with the US and UK on venture capital.
The Australian Venture Capital Association Limited (AVCAL) has estimated
that these legislative amendments will bring an additional $1 billion in
foreign VC investment into Australia - building on their position as the
number one destination for venture capital in the Asia Pacific.
Australia attracted 24 per cent of the $US1.9 billion invested in the
region in 2002, according to Thomson Venture Economics.
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