The federal government should introduce “fast-path” grant applications for tech startups and treat accelerators as consultants for the purposes of grant funding under the new Entrepreneurs’ Infrastructure Program (EIP), according to AngelCube co-founders Nathan Sampimon and Adrian Stone.
The recommendations form part of AngelCube’s submission to the government’s policy review of the recently announced Entrepreneurs’ Infrastructure Program.
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“These recommendations have to be taken up if the government wants the EIP to be useful for tech startups as well as ordinary businesses,” Stone says.
He says the normal grant application process might work fine for small businesses, but for startups it takes far too much time.
“Startups don’t want access to consultants; they don’t want access to funds where it takes three to six months before you’ve got access.
“We can take a startup from an idea to a fully functioning business in three months.”
AngelCube’s submission touched on the same point, highlighting the “lengthy, time-consuming and costly process” required to understand if a technology business is eligible for government assistance, and compared it to the rigorous but much shorter process used by accelerators during their selection processes.
It made six specific recommendations:
- Venture accelerators are recognised as a new category to apply for Business Management Grants.
- Venture accelerators can apply directly under the three year rule for business management grants.
- Venture accelerators should be recognised as an ‘expert network’ for the nomination of Commercialising Ideas grants.
- The government should allow “Business management” grants of up to $100,000 for venture accelerators to support between 6-10 companies.
- Business Management Grants should be preapproved based on the venture accelerators’ initial commitment to provide a minimum of $20,000 to each accepted company, indicating an initial investment from the accelerator of $120,000 to $200,000.
- Allow a rapid process approval of the Commercialising Ideas Grant based on the due diligence conducted by Venture Accelerator and co-investors.
Venture accelerators are a valuable part of innovation ecosystems and government can capitalise on this by recognising their existence as a category and supporting them, the submission concluded.
“Venture accelerators provide an avenue for government to make a rapid impact and support the new technology businesses of the future,” it says.