Tech start-up Firmware Technologies forced to go overseas after rejection from Australian investors
Perth-based Firmware Technologies has secured a $34 million equity agreement with Equity Partners Fund SPC, which is based in the Cayman Islands.
The deal follows a three-year search in Australia for funds to expand the company, which was founded in 2006 and renders and distributes 2D and 3D imagery.
The money will be used to roll out the business in Europe and the US, with partnership deals in the process of being put in place.
However, Jacques Blandin, CEO of Firmware Technologies, told StartupSmart that it has been "very tough" to raise funds due to a lack of understanding about tech start-ups in Australia.
"We had four meetings over 18 months with the West Australian Department of Trade, which were fruitless," he says.
"I don't blame them, but nothing came of those meetings and the truth is that it's very hard to get money for tech companies in Australia."
"There was a lot of noise about funding, but it's very hard to get and a lot of people we spoke to didn't understand the sector."
"As a nation, we don't seem to understand where technology fits in. Our focus is on resources. It's more a reflection of the state we're in as a nation than anything else."
Blandin says he has been talking to potential overseas investors since April 2008 and, although he says "a lot of promises that came to nothing,", he claims the attitude to tech start-ups is healthier outside Australia.
"There is a more positive attitude to tech companies [overseas]. There is a lot more information on how to pitch for funds properly and there are a lot of people to point you in the right direction, even if they can't get you money," he says.
However, Blandin warns that tech start-ups won't be able to access overseas funds until they have a proven concept.
"You will need a beta version of your product, beyond an alpha version, before you will be funded," he says.
"We've always had a good business plan, an underlying strategy and did lots of market research. If you do all that, then you need to explore as many avenues as possible for funding, even if that's family and friends. That first bit of funding can really kick you off."
This article first appeared on StartupSmart, Australia's top site for people starting a business.