A Queensland incubator is launching a $1.2 million investment fund next week to plug a funding gap for creative start-up businesses.
Creative Enterprise Australia (CEA) will fund a range of creative start-ups between $25,000 and $150,000.
CEA chief executive Anna Rooke told StartupSmart creative start-ups are a vibrant but overlooked part of the start-up ecosystem.
“We thought there was a real gap in the market to help creative businesses access early stage capital. This is still an emerging market in Australia, so the investment community was maybe not as familiar with it as tech,” Rooke says, adding there is a misconception about what ‘creative start-ups’ actually are.
The incubator is a Queensland University of Technology (QUT) initiative, but investment recipients can be from all over Australia and do not need to be students or alumni.
Rooke says the creative start-up sector includes any content company such as music, gaming, software as well as design, fashion and art.
“These start-ups are all cutting-edge platforms in the new economy we’re in, but people hear creative industries and automatically think of art-based organisations and the not-for-profit sector, and they’re not aware of the amazing businesses coming out,” Rooke says.
Rooke says she’s been promoting creative start-ups to investors across the country, but the feedback she was getting from angel investors was they weren’t familiar with the area. They also expressed concern that content-focused entrepreneurs may not be as investment-ready as IT-focused start-ups.
“There is also a misperception that maybe creative enterprises are just too risky to invest in because they’re creative and less business savvy,” Rooke says. “So there was a great gap there for us to help these businesses reach their potential here rather than overseas.”
She says CEA will be looking for scalable creative ideas with strong teams behind them.
“We’re looking for a really great energetic passionate team with a market niche and the ability to scale. They’ll also need a clear customer base in mind, and a clear product to market,” Rooke says, adding CEA was flexible, but would be hoping to exit the investment after five years.
Rooke says Australia needs to start taking its creative start-ups seriously and support them better.
“We haven’t had that focus even though employment [in the creative industry] is outstripping employment in the economy in general. For every person working in the mining sector, there are three in the creative industries,” Rooke says.
Rooke says CEA’s move into investment was an exciting development.
“The capital for this fund came from our own funds,” Rooke says. “The move from incubator to investor is a really important move. Although we’re based in Brisbane, we want to support the growth of the industry across Australia.”