In light of the upcoming Entrepreneurs’ Infrastructure Program, which is slated to be launched on November 1, StartupAUS has penned an open letter to government, co-signed by AIIA and AVCAL, which calls on the new program to take three major factors into consideration:
- The grants cap should be at least $1million;
- All sectors should be equally open to consideration for grants; and
- All grants should be considered solely on merit, with letters of support from investors and advisors an essential requirement.
Here is the open letter in full:
An open letter regarding Australia’s Entrepreneurs’ Infrastructure Programme (EIP) Commercialisation Grants.
With the launch of the new EIP Commercialisation Grants expected in the coming months, the board of StartupAUS and our industry partners call upon the Government to take advantage of a once in a generation opportunity.
We urge Government to support a programme that provides the funding runway that young companies require to achieve success. Getting this right can deliver a projected 540,000 new jobs and add $109 billion to the economy by 2033.
Digital disruption is changing the face of global markets and new business models are challenging traditional industries. Now, more than ever, Australia needs to invest in the commercialisation of innovative ideas.
On a per capita basis, Australia is amongst the lowest in the developed world when it comes to both angel investment and venture capital. Investment in young companies creates value-adding jobs and aids wealth creation, and promises to generate a considerable return on investment for the Australian economy.
The new EIP Commercialisation Grants have the potential to create a platform upon which Australia can build a vibrant innovation-led economy. We believe the new EIP programme will help to build the industry networks that young businesses need to succeed and provide the appropriate levels of funding to deliver enough time for these high growth companies to make effective use of these networks.
Hence, we call upon the architects of the upcoming EIP Commercialisation Grants programme to take three vital steps to provide appropriate infrastructure for Australian entrepreneurs:
1. Ensure grants are available to all sectors
The EIP should fund the most promising companies without any bias for particular sectors. Startups invent new sectors that didn’t exist ten years ago, from social media to the internet of things. If we are going to see more successes such as Atlassian, Seek and OzForex, we should not confine support for innovation to specific industries.
2. Ensure grants are awarded on merit
We believe it is critical that grants are allocated on merit, based on the quality of the IP and support from the private sector. In particular, letters of support from reputable advisors and investors should be an essential requirement.
3. Extend the upper limit of funding from $250,000 to a minimum of $1,000,000
The reduction in grant funding available through the Commercialisation Grants is a backward step that could lead to the further reduction in the availability of capital in Australia. Young businesses need capital to provide the appropriate runway, and give them time to deliver success. Capital needs to support the best ideas – and sometimes the best innovation needs significant level of backing. In fact, capital heavy industries can result in the strongest return on investment.
Therefore we recommend that an upper limit of at least $1 million be allocated.
This is not merely a call for funding from Government, our concerns here are not just in cash being made available for startups. As both the StartupAUS EIP submission and the Crossroads report make clear, as a nation we need to take immediate and far-reaching steps to address market failures that are impeding growth and productivity gains.
The EIP Commercialisation Grants represent a real opportunity to fund companies that are key to our current and future economy, and make Australia a great place to start and grow businesses. Over the past few years we have seen the emergence of vibrant tech startups that are developing leading-edge technologies. Several of these high growth companies are making an impact on the global scene. As a nation we need to continue to support – and accelerate this trend.
We look forward to working with the government and industry to grow more companies, create more jobs, and create an environment that supports more high growth companies.
The letter is signed by StartupAUS Board: Alan Noble, Peter Bradd, Bill Bartee, Steve Baxter, Dr Jane Matthews, Glenn Smith, Suzanne Campbell and Yasser El-Ansary.