Start-up survival rate: 71.7% (2007 to 2009).
If Australian entrepreneurs are asked to think about the best start-up hubs in the country, it’s safe to say Canberra doesn’t immediately spring to mind.
Canberra – population 358,000 – is often perceived as little more than a political epicentre. For start-ups, Canberra’s charms can appear limited, compared to the buzz of being part of the vibrant innovators’ ecosystems found in other capital cities.
But for those who do decide to start a business in Canberra, there is a surprisingly high level of funding support.
In 2008, the ACT Government introduced InnovationConnect (Icon), which provides grants of up to $50,000 to help Canberra-based businesses develop their products and services.
Just two weeks ago, five start-ups received $170,000 from Icon.
For up-and-coming entrepreneurs, there’s InnovationACT, a business plan competition for university students, run by the Australian National University and the University of Canberra.
Michael Cardew-Hall is the chief executive of ANU Connect Ventures, a pre-seed venture capital fund associated with the ANU.
In addition to InnovationACT, ANU Connect Ventures manages the $3 million Discovery Translation Fund (DTF) in conjunction with the ACT Government.
Grants from the DTF typically range from $25,000 to $100,000.
“It focuses on proof of concept – it’s meant to be complementary to Commercialisation Australia. It’s very focused,” Cardew-Hall says.
ANU Connect Ventures also manages a $27 million seed investment fund as part of the ANU-MTAA Super Venture Capital Partnership.
With regard to the DTF, Cardew-Hall estimates around 31% of the investments are made in biotech or healthcare, 15% in manufacturing and transport, 44% in ICT and 8% in engineering.
“A lot of the activity is in the ICT sector – the general scope seems to be in the ICT industry,” he says.
“Historically, the focus of many start-ups would have been with governments – either public service or defence. There are a lot of neat defence start-ups around here.”
“Now, most are looking for opportunities that will go global. The government is not seen as the panacea of the marketplace. The projects I’m seeing are not focused on government.”
“The general trend is to try and build companies that are global.”
Catherine Prosser, who founded Canberra-based start-up StageBitz, recently returned from the United States, where she spent time drumming up business.
According to Prosser, there are pros and cons of starting a business in Canberra.
“When you’re up in Sydney, it’s very much [about] getting all the tech start-ups together,” she says.
“Whether you’re a tech start-up or you’re setting up a new retail shop or a new professional consulting business, it’s all regarded as the same kind of thing [in Canberra].”
“I think that’s probably where we could improve – more targeted support to specialist areas of start-ups.”
Having said that, Prosser says the Discovery Translation Fund is particularly impressive.
“That’s the kind of thing that lots of people kill for outside of Canberra, so to have that kind of opportunity available is excellent,” she says.
“As far as accessing Federal Government programs, there’s something about being able to pop into the office that does make a difference.”
“As much as people malign Canberra as a public service city at times, it’s certainly been an advantage for me on that front.”