When Commercialisation Australia was launched in January last year, many entrepreneurs, frustrated by previous government-backed funding schemes such as Comet, were sceptical of its impact.
However, the organisation, which offers up to $2 million in matched funding to help start-ups’ skills, executive hires, commercialisation and proof of concept, is steadily building itself a favourable image among small businesses.
With more than $50 million dished out to innovative entrepreneurs since its creation, Commercialisation Australia still has cash to play with, after being given a $278 million war chest until 2014. It will get $82 million a year from then on.
Doron Ben-Meir was appointed CEO of Commercialisation Australia last April. He has personally founded several start-ups, as well as working for a number of leading VC firms, including a stint as CEO of Prescient Venture Capital.
StartupSmart spoke to Ben-Meir about the challenges faced by start-ups attempting to get government funding, as well as get his tips on how to land a grant.
StartupSmart: How would you assess the first 18 months of Commercialisation Australia?
Doron Ben-Meir: I think it has a lot more substance than the old Comet program. It is a lot more useful for start-ups – it provides skills and knowledge and up to $2 million in funding, which is much more substantial than what was offered before.
There’s a team of case managers on board now that provide a lot of value. The focus is on money but the case manager function is important as they won’t tell you what to do, they will work with you to move things along more quickly.
This means you’ve got the right person there at the right time, another brain by your side.
What kind of changes have you made since you came in?
We’ve brought in new people and put additional resource into the case manager team. There’s 22 of them now and they are high calibre people who are new to government programs as they’ve come from the private sector.
This has added significant knowledge, such as biotech and fund raising. We’ve also moved away from a siloed mentality to helping start-ups. It’s just not useful.
For example, if a case manager in Queensland can provide help to a Victorian business, we will put them in touch. The managers are motivated and incentivised to bring in extra help and participate with others.
Do you ever get frustrated by the red tape and bureaucracy of government?
Well, I’ve been involved in start-ups so I suppose you don’t get much faster and smaller than my background!
I’ve tried to speed things up since I’ve been at Commercialisation Australia but I’ve also learned a lot about the constraints of government, as well as the many benefits that the Government can bring.
There’s a good team in Canberra and we’ve tried to push things harder and faster, within reason.
Doesn’t the funding process still take too long for start-ups though?
Too long compared to what, though? If you compare it to the six to 12 months that a VC will take, it doesn’t take too long. It’s not that bad.
I can approve applications now, rather than the whole board, which has cut down the time. The upper limit of how long you will wait is 75 days for the larger grants.
It would be nice if it was quicker, but it has to go through a process that does take time. We will get it more efficient, but it’s interesting the expectations that people have with government compared to the commercial sector.
What are your priorities for Commercialisation Australia?
What we’ve already been doing – getting the right people, making the application forms clear and straightforward and looking for things that add value for businesses.
There are 120 participants in the program and they are starting to show some results. We need to publicise these successes and we are working through companies of all sizes that haven’t even thought of applying to us.
The next challenge is to explain to the market what we can offer. There’s no sector-specific focus, it’s open to all. Universities need to participate more, as well as small businesses that have new products or processes but think that they aren’t eligible.
The majority of applicants we get are from start-ups. We want start-ups too, of course, but they have to come up with something innovative if we are to help them.
Do you have enough cash at your disposal? Compared to the investments made overseas, it’s a pretty small war chest.
We drive innovation and provide a centralised point where innovators can come. We facilitate innovation and give businesses a better chance of succeeding.
The deal flow is reasonably robust and the program’s reach merits the amount of money we have. To date, the funding has been sufficient to meet demand. If we had more money, we wouldn’t be able to deploy it.
There are a lot more opportunities out there as some innovators don’t realise they can apply. That demands hasn’t been realised yet.
The long-term goal is to see the private sector view Commercialisation Australia as deal flow for investors. Usually, investment in start-ups comes through ad hoc meetings, but there is an opportunity to access a critical mass of the best start-ups in Australia. Investors can go fishing and come out with a good deal.