Australia’s peak representative body for the startup community is set to receive up to $360,000 in funding from the federal government for a series of research reports in a move that could jeopardise the group’s independence, a leading Sydney entrepreneur says.
The department of industry, innovation and science will be contributing $120,000 annually for two years with the option of extending this for another year for StartupAUS to conduct research projects that “explore areas of key interest in the sector”.
One of StartupAUS’ key roles is to lobby the government on innovation and startup issues, and Tidy Me co-founder Riley Batchelor says it could be a conflict of interest for the organisation to accept funding from the government as well.
“How can they effectively lobby the government and position themselves as a representative of the startup community if they’re getting paid by them?” Batchelor tells StartupSmart.
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“How can they claim independence if they’re government-supported in such a way?”
Independence “without fear”
These are concerns shared by shadow parliamentary secretary assisting with startups Ed Husic, who says the funding could mean StartupAUS no longer feels it can criticise the government.
“Turnbull government should give StartupAUS an absolute guarantee it can speak frankly about government policy, without fear,” Husic tweeted.
“The Coalition is very ‘anti’ funded groups being activists or critical of government. StartupAUS should remain able to provide independent views.”
StartupAUS receives funding from corporate partners including Google and Salesforce, as well as the likes of venture capital veteran Bill Ferris.
Other members of the Australian startup sector are also concerned about the government funding, with Signal Ventures general partner Atlanta Daniel saying she finds the move “hard to understand”.
“I’m a long-time supporter and advocate for StartupAUS. I think this type of research can be valuable for the community but I find it hard to understand a move to take funding from the organisation they’re supposed to lobby,” Daniel tells StartupSmart.
“It’s hard to be objective towards or even critical of your financial supporter.”
But StartupAUS CEO Alex McCauley says he has been guaranteed independence and the funding is a positive development for the sector.
“We were very clear when we agreed to take on the work that StartupAUS would have complete editorial control over the report themselves, and that the funds were directly linked to the reports and nothing else,” McCauley tells StartupSmart.
“StartupAUS has always called it how we see it and we’ve always worked with anyone that wants to work with us. There’s never been a conflict there and there isn’t one now.
“The proof will be in the pudding. We’ll continue to advocate strongly for startups and now we’ll have more resources to develop leading thinking on how to make the best Australian ecosystem.”
McCauley says the funding is on a contract-basis and covers the writing of four reports over two years.
“The government is looking to get credibly research commissioned in an area we think is really important – how to develop entrepreneurship in Australia,” he says.
“It’s fantastic that policy-makers are asking industry to help them come up with credible policies that are actually going to work. It’s much better for startups that the government has engaged us to do research than them just going off and doing it themselves.”
McCauley says that he insisted on the third year of funding being optional in order to give StartupAUS “flexibility”.
“We’re a young organisation and didn’t want to commit us to work three years out,” he says.
“The funding is directly related to the reports. If we don’t get the funding then we don’t write the reports.
“The idea that somehow the government will have influence over what we do because of this arrangement I think is missing the point.”
The government has already commissioned two reports with the themes of culture and entrepreneurship, and international analysis of entrepreneurial programs. The first of these research studies is expected to be released in October.
It’s not the first StartupAUS has been commissioned by a government, with the group currently completing research into agriculture technology in partnership with the Queensland government, as well as KPMG and the Commonwealth Bank.
The lobby group will also be releasing its third annual Crossroads report later this year, providing a “comprehensive analysis of the environment that affects startups both in Australia and overseas, as well as key recommendations to help our nation get to where we need to be”.
Assistant minister for innovation Wyatt Roy says he hopes the reports complement the government’s own innovation movements.
“I’m conscious there is so much more we could learn about what makes entrepreneurs tick and there are many angles to be examined to complement the innovation agenda,” Roy says in a statement.