Start-ups that apply for Early Stage Commercialisation grants will no longer have to repay the funds, with the Federal Government footing the bill as part of an overhaul of the scheme.
Early Stage Commercialisation grants, facilitated by Commercialisation Australia, provide companies with up to $2 million to bring a new product, process or service to the market.
The grants were initially available for companies with less than $20 million turnover, or entrepreneurs who will form a company if their CA application is successful.
Previously, participants were required to repay the grants once certain sales target were met. Starting from today, participants will no longer have to repay the grants.
The grants will also be available to more businesses, as the annual turnover limit for applicants will rise from $20 million to $50 million.
In addition, growing businesses will have the option to apply for an Experienced Executives grant of up to $350,000 – up from $200,000.
Doron Ben-Meir, chief executive of Commercialisation Australia, says the repayment obligation was lifted following feedback from recipients that it was cumbersome.
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According to Ben-Meir, the application process is now designed to be quick and easy – and the quality of the applicants has been improving since starting up in early 2010.
“The idea is you don’t have to do terribly much work [to apply],” Ben-Meir told SmartCompany.
First, applicants submit their application and receive feedback from case managers. Applicants are then encouraged to submit a more detailed application, which is given formal feedback.
The application then goes to the CA board for consideration. Once the application reaches the second stage, a determination is made within 75 days, Ben-Meir says.
Commercialisation Australia is offering $60 million in grants next financial year. It also provides case managers to assist businesses to commercialise their development.
The funding arm has already distributed 177 grants worth $72 million for businesses in biotechnology, engineering, manufacturing, agribusiness and clean technology.
Meanwhile, up to $100 million will be invested in new companies as part of the government’s Innovation Investment Fund, which is in its third round.
Announcing the final tranche of IIF round three, Innovation Minister Kim Carr said the $100 million investment will lead to $200 million of venture capital for early-stage investments.
The fund offers a bridge to larger venture capital funds with the capacity to make significant longer-term investments.
The Australian Private Equity and Venture Capital Association welcomes the announcement, but has expressed concern over a lack of policy commitment to continue the IIF beyond this last round.
“The government commendably spends over $8 billion a year on research and development, but very little on helping to commercialise that investment,” AVCAL chief executive Dr Katherine Woodthorpe says.
“The IIF has been a vital program in the commercialisation effort but a lot more work is needed if we want Australia to capitalise on, and retain, its innovation for national growth and employment.”