Venture capital, the blossoming start-up ecosystem and Australian entrepreneurial inferiority complexes were the key topics at a Silicon Dragon networking and panel event last Thursday in Sydney.
A panel of investment decision-makers discussed the connection between Silicon Valley and Australia, and the challenges facing local entrepreneurs.
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David Morris, co-head of corporate for Asia Pacific at law firm DLA Piper, began the panel explaining the legislative environment wasn’t particularly sympathetic to start-up funding.
“The rules are very prohibitive and what we need to do is bring in legislation to make it easier,” Morris said.
Hamish Hawthorn, the chief executive at ATP Innovations accelerator hub, agreed.
“For companies to raise funds in this country, it’s just way to hard and needs to change. It’s as simple as that,” Hawthorn said. “Change has been coming for ten ears, and everyone in the start-up community needs to push hard on the government to get there.”
Jana Matthews, Kauffman fellow and ANZ InnovyzSTART accelerator program director, said people involved in the local ecosystem needed to focus on what they could change.
“I can’t do anything about the taxation regulation and legislation. What we can do is learn how to scale by watching and learning from people how have,” Matthews said.
Matthews urged the room to talk more about expansion and growth, not just start-ups.
“We have several things to do about our knowledge and mindset,” Matthews said. “Don’t just talk about start-ups, we need to talk about growth.”
Despite the funding challenges, co-founder of Blackbird Ventures and Southern Cross Venture Partners Bill Bartee said companies such as Atlassian and Canva had broken the mould and shown Australian companies could grow into international success stories.
“You can scale a business if your business is of that ilk,” Bartee says. “No one gives a crap you’re from Australia, you just care if the product works. We’re all connected now so just get over it.”
Angel investor and Sydney Seed Fund co-founder Benjamin Chong said celebrating the success of our leading start-ups and more exits would attract more investment to the growing start-up ecosystem.
“There is a shortage of funds,” Chong said, adding much of the capital was tied up in mining and resources entrepreneurs investing in their industry. “A lot of capital is locked up in the success begets success cycle.”
Bartee said while there was increased interest from Silicon Valley investors in Australian start-ups, it was mostly at the later growth stage. He added this helped fuel the local firms and aspiring tech investors focus.
Hawthorn said they were seeing an increasing amount of understanding about tech.
“People are getting more comfortable. We are starting to see a lot more investment activity in tech,” Hawthorn said. “There are two drivers in investment: fear and greed. The fear is over expressing itself at the moment.”
Morris agreed they were likely to see more investment activity in start-ups as valuations improved.
“We’re at an inflection point with valuations and there are opportunities to get real value for your business now,” Morris says. “I’m cautiously optimistic we’ll get a better trend of valuations.”
The panel agreed the understanding and importance of the technology industry would continue to grow in the coming years.