Commercialisation Australia

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StartupAus calls for creation of federal department of innovation to boost startup ecosystem

8:20AM | Monday, 4 August

StartupAus is urging the federal government to create a dedicated agency responsible for innovation.   Such an agency is one of a number of characteristics of a successful startup ecosystem that Australia lacks, StartupAus says in a submission to an inquiry into Australia’s Innovation System by the Senate Economics References Committee.   It suggests establishing a dedicated agency, responsible for the development of innovation policy and implementation of programs similar to New Zealand’s Callaghan Innovation, the United Kingdom’s Technology Strategy Board, Sweden’s VINNOVA Governmental Agency for Innovation Systems and Singapore’s Standards, Productivity and Innovation Board.   StartupAus says the absence of such an agency is partly responsible for Australia lacking a coherent vision when it comes to innovation, which in turn is contributing to a wide range of market failures hindering the development of successful startups.   “Australia does not currently have all of the required conditions for an ecosystem that supports successful startups,” the submission says.   “Their establishment has been hampered to varying degrees by market failures spanning education, culture, expertise, access to capital and regulatory environments.”   The submission suggests a number of actions targeting those issues, some of which include; implementing a national visiting entrepreneurs program which would give Australian founders better access to mentors, creating an entrepreneur visa, and developing a variety of programs which recruit young people to entrepreneurship and the ICT sector.   Much has been made of the federal government’s decision to scrap Commercialisation Australia and the Innovation Investment Fund, a decision which StartupAus says is of “grave concern”.   “It is highly conspicuous that the Australian government’s support for the startup sector is decreasing at a time when the rest of the world is increasing investment in this sector,” the submission says.   “…the removal of these two programs will undoubtedly lead to a further reduction in the availability of capital to startups in Australia. StartupAus expects that this will result in an acceleration of the existing trend toward Australian startups leaving Australia in search of more favourable funding environments.”   Shortly before the budget was released, the Commission of Audit recommended that CA and the IIF be abolished on the grounds that “skills and finance can be acquired from the private sector” and there was “no clear reason” the government should provide assistance in competition with the private sector.   “That the Commission should come to such a conclusion, or that the government should accept it, is beyond belief,” the submission says.   However, the submission notes there is reason for optimism, as the Australian startup sector has seen a “groundswell of activity” over the past three years and there is a growing number of Australian technology companies that are reaching meaningful global scale including Atlassian, Freelancer, Bigcommerce, 99designs and Halfbrick Studios.   “We believe that Australia has an unprecedented opportunity to transition from an economy based on resources, primary industries and domestically focused businesses to one based on high-growth knowledge-intensive businesses that can compete globally,” the submission says.   The inquiry is set to report its findings in July 2015.   StartupAus’ full submission to the inquiry can be found here.   Follow StartupSmart on Facebook, Twitter, and LinkedIn

Rome2rio scores one of the final Commercialisation grants

7:34PM | Tuesday, 8 July

Travel search engine Rome2rio is one of the final batch of companies to receive a grant from the now defunct Commercialisation Australia.   Rome2rio’s search engine offers air, train, ferry, mass transit and driving options door-to-door from any location.   The startup received a grant for $385,000 from Commercialisation Australia at the beginning of 2013, and has now received an additional $788,000.   The application was examined and approved by the Commercialisation Australia board in February and Rome2Rio was notified of its successful application late last month.   A spokesperson for the Department of Industry says it is not yet able to provide details of the last round of Commercialisation Australian grant recipients because it is still finalising offers and contracts.   Rome2rio CEO Rod Cuthbert says the funds from this latest grant will go towards technology development and hiring more engineers. He says its eight person team will grow to 10.   “It will go towards continued development of our partnership platform, both API and white label programs available for partners to integrate into their own sites and inevitably most of that work also impacts the consumer cycle we operate as well,” he says.   Cuthbert praised the Commercialisation Australia program, saying while it was quite a bureaucratic program, “if you took the time to understand it, it was a valuable process”.   “Our case manager was experienced and added value to the process,” he says.   “We’re sad to see it go, but we’re open to see what they replace it with.”   Cuthbert says Rome2rio’s website had 2.7 million visitors in June and has been growing by 30% each month for the past six months.   He attributes that growth to demand for Rome2rio’s product.   “We’re the first people that have done a global transportation data base,” he says.   “People have always been out there asking questions like ‘How can you get from A to B?’ but there hasn’t been a site that’s stood up to answering those questions, but we can.   “We know how to get from A to B, anywhere in the world.”   The latest round of funding, gives Rome2rio plenty of breathing room funding wise.   “We’ve got probably a couple of years of runway at our current run-rate given we have revenues and we anticipate our revenues will grow on a monthly basis,” Cuthbert says.   “The only thing that would drive us to do more funding is if we wanted to dramatically increase the amount of development we want to do.”   That said, Cuthbert points out the online travel industry is a very inquisitive space, where anything can happen.   “There’s a couple of deals every week in online travel,” he says.   “Small companies that do interesting things get snapped up quickly.   “As we pass through 5 million unique visitors a month on the way to 10 million, the industry notices that type of thing and opportunities surface.”   He says rather than focus on what those opportunities might bring, the team is concentrating on continuing to grow the site’s traffic.

The ‘myth’ of the Australian entrepreneur

5:25AM | Tuesday, 27 May

We are still awaiting the details of the federal government’s Entrepreneurs’ Infrastructure Program, and how this may impact the Australian entrepreneurial ecosystem.   While this program is estimated to provide $484 million of funding, this is only half of what was spent under now-scrapped programs such as Commercialisation Australia, the Innovation Investment Fund and the Industry Innovation Precincts, representing a significant decline in government spending on entrepreneurs and innovation. While many agree that government programs can be improved, the cuts show a lack of understanding of the Australian entrepreneurial ecosystem.   It also places us behind other nations that have put the needs of entrepreneurs at the centre of industry policy, recognising they are a driver of economic growth, prosperity and innovation (for example, as seen by President Obama’s Start-up America initiatives). Many agree that the current budget seems to focus more on SMEs rather than high-growth technology companies, or smart specialisation for the nation.   There is a glimmer of hope that the government will finally address the Employee Share Option Program (ESOP) in Australia, which is considered a crucial way to incentivise early employees to work in a start-up (and a barrier that all stakeholders have been lobbying to change for many years). Development of crowd-sourced equity platforms are not highlighted, however the issue is currently under review by the Federal Government. Yet overall, this budget points to a broader lack of understanding of the Australian entrepreneurial ecosystem and also the nature of entrepreneurship and innovation.   In a recent study completed at ATP Innovations, Australia’s largest technology incubator, we interviewed many entrepreneurs to understand what entrepreneurial life is like in Australia. We learnt of the difficulties in hiring and retaining key employees in the early stages (with taxation around ESOP the main issue), we listened to mixed views on whether it was necessary to go to the US to secure venture capital funding, to overcome the conservatism of the Australian VC market.   We observed the significant impact that R&D tax concessions can provide - not in determining whether to pursue a technological venture, but in keeping start-ups alive. We noted the value of attracting larger technology firms to locate or operate in Australia (through various industry innovation support programs and incentives) due to the spillover effects for the local ecosystem. So what is it like being an entrepreneur in Australia?   Don’t believe the hype   Much of the hype around entrepreneurship today focuses on “hero entrepreneurs” – the stereotypical image of Virgin founder Richard Branson and his extroverted, risk-taking personality. Yet this picture doesn’t accurately reflect day-to-day life as an entrepreneur. This research busts the myth that entrepreneurs succeed because of inherent personality traits – because they are born that way. Sure, they may be determined and passionate, but they also follow processes and patterns of developing and testing ideas, building support networks and developing certain communication and business skills.   Becoming an entrepreneur   The entrepreneurs in this project wanted to solve problems and to use their technical expertise to develop creative solutions.   What was their typical career journey? Many of the younger cohort emerged from university, mainly from technical (science and engineering) faculties, to further develop – at first, at least - their own technologies. Most created start-ups later in their careers, after seeing a problem in their industry and identifying a solution but being unable to implement it within an organisation.   The notion that entrepreneurship is a high-risk/high-reward activity was not prominent. Leaving full-time employment for a start-up is risky, but many do so having been successful in their careers and with the security of a strong professional network and a fall-back position. Entrepreneurs are not necessarily risk takers, but they are seemingly more comfortable with uncertainty.   The study’s participants were determined, resilient and passionate, as well as being sufficiently open to risk to be able to give up a full-time job. However, they were also aware of the need to acquire stronger marketing, networking and social interaction skills – skills they weren’t born with. They needed to learn how to articulate a value proposition, how to understand the needs of the market, how to pitch and sell an idea, and how to persuade investors of the merits of an idea.   More findings of the report are available here and include discussions of how entrepreneurs measure and communicate success (to each other and to investors). It’s not always clear to those on the entrepreneurial journey whether they are moving in the right direction. Determining progress can take a number of forms and is an unstructured process.   We examine the art and science of valuing start-ups (emphasis being on the art), the requirements of early stage networking and the structure of entrepreneurial networks (many cultivating what sociologists describe as “weak ties”). We also explore whether entrepreneurs feel entrepreneurship can be taught and whether you need to go to business school.   A better understanding of the realities of entrepreneurial life in Australia will lead to better informed industry policy, and perhaps increased support for an ecosystem that is a key driver of future growth and development for Australia.   The authors do not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article. They also have no relevant affiliations.   This article was originally published on The Conversation. Read the original article.

Medical Research Future Fund needs commercial bent, say experts

5:37PM | Tuesday, 20 May

The federal government’s new $20 billion Medical Research Future Fund needs to include support for commercialisation to help ensure the benefits of research to flow to patients, according to AusBiotech CEO Dr Anna Lavelle.   “The establishment of the biggest research fund of its kind in the world is welcomed as a great nation-building investment for Australia. However, the lack of detail has left the biotech sector wondering if and how the commercialisation of such research would occur,’’ she says.   “Given the support for commercialisation that has just been removed in this budget, the level of difficulty in translating research into treatments that reach patients just got a whole lot harder.”   That’s consistent with the recommendations of the McKeon Review: Strategic Review of Health and Medical Research report which was released in April last year.   The review highlighted the importance of commercialisation in translating health and medical research into a range of health, economic and social benefits for individuals, communities and governments.   “Commercialisation is a necessary step to deliver research benefits to the community, and has the potential to create economic benefits including high-value jobs,’’ it says.   It also noted that while Australia has a very strong health and medical research capacity, it also has a “relatively poor” record of translating research into health and commercial benefits.   Among its recommendations were that the government “continue to support the Innovation Investment Fund program”.   It also noted that Commercialisation Australia was playing a valuable role, but “much more support is required”.   Both Commercialisation Australia and the Innovation Investment Fund were scrapped in last week’s federal budget.   Combined with the R&D tax incentive being reduced to 1.5%, Lavelle says it’s a triple blow for biotech startups.   She says while that reduction is expected to be neutralised by a 1.5% reduction to the corporate tax rate beginning July next year, that’s not the case for startups.   “This expectation fails to take account of the impact on the many pre-revenue companies that are in tax loss (and therefore don’t pay corporate tax),’’ she says.   “For them, this is a permanent, further and potentially damaging reduction to the support available for R&D as they will not get any benefit from the planned corporate tax reduction.”   AusBiotech also called for the establishment of a Transitional Biotech Fund of around $250 million for early-stage development, another McKeon Review recommendation.   “The removal of the remaining support for commercialisation means that there is now an even greater need for the Translational Biotech Fund, if we are to see benefits flow from the MRFF to real treatments and cures.”

OPINION: How Malcolm Turnbull let startups down

5:42AM | Thursday, 22 May

“Australian startups and Australian entrepreneurs find the American market very, very accessible. We need to do a better job of commercialising technology here in Australia.”   That was what Federal Minister for Communications Malcolm Turnbull said, at an event in February last year, when he was still in the shadow cabinet.   While in opposition, Turnbull talked about better R&D incentives, criticising the Howard government for creating uncertainty by changing eligibility rules on this one; he blasted red tape that slowed down the speed of innovation; and was critical of the fact that the number of startups funded by public organisations had decreased over time.   “As we continue to pursue the important goal of improved productivity, which is closely linked to a better utilisation of technology, we have to ensure that governments are doing everything they can to make it easier for people to innovate,” he said at that time.   So when Turnbull took up his mantle in the Abbott government in September last year, there were high hopes of improved government support for startups. This, thought the startup community, was a man who ‘gets’ what we’re about. Despite the fact that his stance on NBN is a source of much contention (that is another seven columns in itself), most in the startup community still saw Turnbull as the answer to getting some much-needed government attention.   And he continued to say all the right things when in power.   In January this year when conducting a live Facebook Q&A session (while visiting Facebook as part of a tour visiting leading US startups), he praised the potential for crowdfunded equity and said more needed to be done to encourage innovative companies.   “We need to do more to encourage innovative companies in Australia . . . an obvious area is rectifying the anomalous treatment of employee shares and options in Oz,” Turnbull wrote at the time. “There is a lot of potential for crowdfunding-type models for aggregating venture capital. We need to think laterally on this critical issue.”   It was only in March this year when he responded to a conversation between Nitro chief executive Sam Chandler and BlueChilli CEO Sebastien Eckersley-Maslin discussing later stage funding options for Australian startups. Turnbull waded into the conversation and invited both of them to meet and chat about the issue with him. A meeting, by the way, that never happened.   Turnbull also wrote an opinion piece of his own for The Sydney Morning Herald, telling Australian startups that the government can help them.   When it comes to funding, wrote Turnbull, “The role for government here is to foster a framework in which investors are protected and yet start-ups can raise money without hiring teams of lawyers and financial advisers.”   Again he mentioned that the government was investigating ways to simplify rules for crowdfunding.   “And finally, the government has a role in making life easier for start-ups to do business in Australia and stay here, as opposed to moving offshore,” he wrote.   “One of the key priorities for the government is changing employee share schemes so that employees are not taxed on receipt of shares and options.   But hopes were shattered on Tuesday when the federal budget was released. Nothing that Turnbull had floated was mentioned, and the limited support that startups had was effectively abolished.   The budget announced the creation of the Entrepreneurs’ Infrastructure Program with an allowance of $485 million over five years, at the expense of the Innovation Investment Fund, Commercialisation Australia and other smaller support programs, saving $845 million over five years. That means even less public money for startups (about half of what it was), something that Turnbull had us believe was an important issue for him. Details of the new program still remain unclear.   The government also cut the R&D Tax Incentive Scheme, and lo and behold, it appears it will become a more complicated process, as BDO points out “in a practical sense, the change in rates results in a more complex calculation of the benefit of the R&D tax incentive”. That was the very thing that Turnbull was critical of the Howard government for.   But that’s not even where it ends. What about his ideas of better employee share option schemes and changes to rules around crowdfunded investment? Two things Turnbull has consistently argued would make a difference to the Australian startup scene.   It was only a few days before the budget was announced that the government delayed plans to introduce a new regime for the employee share scheme. The delay was meant to be until later this year, but there was no mention of it in the budget.   Ways to liberalise the rules to allow greater involvement from investors to facilitate crowdfunded investment are still under review, but there is no deadline on when the report on that will be delivered.   You’d be forgiven for thinking it's not going to happen.

Budget a significant setback for startups, says industry

5:34AM | Wednesday, 14 May

While pain was expected, yesterday’s budget is a significant setback for Australia’s startup community, according to a number of industry leaders.   The budget offered no clarity on how businesses will be encouraged to transition into a more innovative and internationally competitive economy in the future, says the Australian Private Equity & Venture Capital Association Limited (AVCAL).   “Everyone was expecting to see plenty of short-term pain for businesses in this budget – and that’s exactly what we got,” said AVCAL chief executive Yasser El-Ansary.   “But what we were also expecting to see tonight was a plan which set out the longer-term vision for what the Australian economy will look like in the next five or ten years – the short-term strategy of deep cuts to expenditure only makes sense when you can line it up against a picture of where we are trying to get to.”   El-Ansary says the abolition of the Innovation Investment Fund represents a major set-back to Australia’s capacity to foster a stronger venture capital industry.   “The new Entrepreneurs’ Infrastructure Program will have to be framed around backing Australian businesses with world-class ideas that can be supported by private sector investment from the venture capital industry,” says El-Ansary.   Tank Stream Ventures investment manager Rui Rodrigues says the abolishment of the Innovation Investment Fund and Commercialisation Australia, and the creation of the significantly reduced Entrepreneurs’ Infrastructure Program, was not in line with the budget’s objective of supporting job creation.   “Details on the newly created Entrepreneurs' Infrastructure Programme remain vague,” Rodrigues says.   He says Commercialisation Australia was a huge loss to the community, having supported many successful technologies in the past.   On the IIF, Dr Michelle Deaker from One Ventures says they believed it should continue, but as a “lower government touch model with an audit report annually for Treasury”.   “It is important to note that IIF is a self-generating program, not a grant.” Deaker says.   BDO, which has released a number of reports on the budget, says whilst the government has wielded its axe to a number of grant, industry and incentive programs, it is somewhat comforting to note that more beneficial government programs such as the Export Market Development Grant (EMDG) program will remain, despite the recommendations made by the National Commission of Audit.   “We are disappointed to see the demise of Enterprise Connect which we have seen add significant value to the SME sector. We will, therefore, be interested to see the detail of the Entrepreneurs’ Infrastructure Program,” the report says.   El-Ansary says while a cut to the corporate income tax rate “is a step in the right direction, there is a lot more that needs to be done”, adding that according to the World Economic Forum’s Global Competitiveness Index, Australia currently ranks number 15.   Con Paoliello, director of tax services with RSM Bird Cameron, says the reduction in refundable and non-refundable R&D tax incentives means that companies undertaking R&D will now need to find additional funding for projects to substitute the incentive they were previously receiving.   BDO notes that the change from a tax concession (i.e. additional deduction) to a tax credit (i.e. offset) was intended to decouple the incentive from the corporate tax rate, meaning that the expected reduction in the corporate tax rate would not reduce the incentives provided.   “In a practical sense, the change in rates results in a more complex calculation of the benefit of the R&D tax incentive,” a BDO report says.   Paoliello says the announcement around the Medical Research Fund which will be allocated $20 billion is at the exclusion of other sectors.   “This is a missed opportunity for the budget to provide other initiatives to mobilise the economy on an innovation trajectory,” Paoliello says.   Deaker agrees the Medical Research Fund is an expense to other areas of the innovation economy.   “The government should consider how this medical research will be commercialised effectively to deliver real value for the country,” she says.   “Australia currently does not have the critical mass of resource to deliver on commercialising medical research, so the budget does not appear to be addressing the key bottlenecks in innovation commercialisation.”   Rodrigues says it's perverse to significantly support infrastructure but only consider traditional infrastructure (roads and transport) and not digital infrastructure.   “For instance, a well-executed national rollout of the NBN would be worth a couple of per cent to the economy at probably a much smaller cost than old infrastructure investments,” he says.   “The budget is going to hurt innovation in general and startups in particular.”   El-Ansary says AVCAL will turn its attention over coming weeks towards pressing the government to map out a plan for how it will encourage greater investment into business and innovation in Australia, through the National Industry Investment and Competiveness Agenda, which is due to be released in the coming months.

Budget 2014: Innovation Investment Fund and Commercialisation Australia to go

5:19PM | Tuesday, 13 May

The 2014 budget delivered the news that many startups were expecting, with the abolition of the Innovation Investment Fund and Commercialisation Australia.   Speaking on budget night, Treasurer Joe Hockey said that the government would be abolishing a range of industry assistance programs and would “refocus our effort on innovation and self reliance.”   “Businesses should stand or fall on their ability to produce goods and services that people actually want,” Hockey said.   The government will instead establish a single business service to deliver a Entrepreneurs’ Infrastructure Program, which will supply $484.2 million over five years.   The government claims it will achieve a saving of $845.6 million over five years by ceasing both CA, IIF as well other programs including the Australian Industry Participation, Enterprise Solutions, Industry Innovations Councils, Enterprise Connect and Industry Innovation Precincts.   According to information released on budget night the new program will focus on supporting the commercialisation of good ideas, job creation and lifting the capabilities of small businesses, the provision of market and industry information, and the facilitation of access to business management advice and skills from experienced private sector providers and researchers.   In a statement, Minister for Industry, Ian Macfarlane said industry policy would no longer be an “overlapping plethora of small grants and entitlements.”   “The new programme will bring research and business together to develop and commercialise home-grown ideas and equip small to medium enterprises with the management and business skills to lead change and expansion,” Macfarlane said in a statement.   Shoes of Prey founder Michael Fox responded to rumblings around the abolishment of Commercialisation Australia, prior to the budget announcement, when the grants were frozen until the budget was released.   “That’s already been incredibly frustrating for us. We put in an application for a grant in November,” he told Private Media.   Fox says applying for funding from Commercialisation Australia had been a “huge amount of work”.   “It took two or three weeks full-time for me as the chief executive and that much time again from other people in the business to prepare the application,” he says.   At the time he said it would be very disappointing if Commercialisation Australia was cut.   Since its inception, Commercialisation Australia has invested over $213 million in 503 companies (as of February 2014) and was responsible for helping a number of Australian success stories like Seek.com.

“Short-sighted”: Startup community blasts Commission of Audit’s funding findings

5:39AM | Friday, 2 May

The National Commission of Audit report’s contention that government support of startups provides no real benefit to the community is flat-out wrong, according to a number of startup industry figures and two major reports into the industry.   Rui Rodrigues, investment manager of Tank Stream Ventures, says the commission’s suggestion is ridiculous.   “It’s a very short-sighted view and there isn’t any logic behind it,’’ he says.   “They’re essentially saying that the thousands of jobs created through startups and technology have had no impact on the economy.”   It’s an opinion echoed by Sydney Angels management committee member Richard Dale.   “The verdict’s been in for quite a long time, a startup, as long as it’s a high growth potential venture and not a lifestyle business, is a net creator of jobs,’’ he says.   Last month peak not-for-profit StartupAUS released its report Crossroads: An action plan to develop a vibrant tech startup ecosystem in Australia which highlighted that startups play a big role in job creation – three million new jobs are added to the US economy each year by new firms, while existing firms lose a total of a million jobs per year.   The Crossroads report noted Harvard professor of economics Ricardo Hausmann’s observation that Australia has “an amazingly primitive export basket”, which he says will lead to Australia becoming one of the worst performers in the region in terms of GDP growth.   StartupAUS board member Bill Bartee, who is also a co-founder and managing director of Blackbird Ventures and Southern Cross Venture Partners, believes the commission is taking the wrong position.   “Well I don’t know where they’ve been or where they’re getting their data,’’ he says.   “It’s pretty clear when you look across the OECD and the US that there’s been lots and lots of job growth from startup and tech companies that build real businesses.   “The eBays of the world, all of these very, very large tech companies that drive the US economy in a lot of ways were once very small companies.   “It’s not as if the government is assisting a dying industry.”   artee says he’s a firm believer in the need to support tech startups by providing capital, both human and financial.   Last year, The Startup Economy, a report commissioned by Google and carried out by PricewaterhouseCoopers, found high-growth tech companies have the potential to contribute 4% of the Australia’s GDP by 2033 while adding 540,000 new jobs.   Currently, startups contribute just 0.2% to the nation’s GDP.   The commission’s recommendation that the government abolish Commercialisation Australia and the Innovation Investment Fund would leave Australian startups in a weaker position, says Dale.   “Do they benefit? The answer is yes, these programs are putting experience, talent and money into the startup ecosystem,’’ he says.   “Are they perfect? No. Do they help? Yes. Does taking them away have an impact? Yes, absolutely. Are they the best way of reducing barriers startups and early stage ventures face? Probably not.   “All programs, all solutions can be improved, but we have programs at the moment that are functioning, providing benefit – so don’t turn off the tap.   “The two years it will take to design, approve and implement a new program, that’s two years of lost opportunity.’’   Startup Victoria CEO Lars Lindstrom added to the chorus of startup community voices speaking out against the Commission of Audit’s recommendation.   “In our view CA (Commercialisation Australia) has been doing a good job and the IIF(Innovation Investment Fund) structure of government matching investment 1:1 mirrors successful initiatives elsewhere such as in Singapore,’’ he says.   “I don’t agree that it’s as simple as saying ‘finance can be acquired from the private sector’, VCs have had poor returns and therefore funding is in short supply.”   “It may be short-term cost-saving but in the long run it would be highly damaging to the Australian economy.’’

Leading tech alliance calls for urgent action to unfreeze Commercialisation Australia

4:58AM | Thursday, 10 April

The Australian Information Industry Association has written an open letter raising urgent concerns about the freezing of Commercialisation Australia to Minister for Industry Ian MacFarlane and Treasurer Joe Hockey.   Commercialisation Australia is a venture capital initiative of the Federal Government. Over the last five years, they’ve invested over $200 million in early stage companies.   A freeze on the grants and review was announced in late March.   AIIA is the peak representative body and advocacy group for the ICT industry in Australia. It includes over 400 tech company organisations.   Here is the letter from CEO Suzanne Campbell in full:  It is with urgency that I write to you on behalf of the Australian Information Industry Association (AIIA) in relation to the current review of Commercialisation Australia funding. AIIA has been active in advocating the need for a supportive national eco-system to facilitate innovation and encourage and support new business development – particularly in light of the increasingly competitive global digital economy. Commercialisation Australia, together with arrangements such as Employee Share Options, R&D tax incentives, venture capital and crowd sourced funding initiatives are critical to this eco-system. With uncertainty across many of these issues at present, business confidence in Australia’s innovation and business support system is at serious risk. Commercialisation Australia plays a critical role in supporting the growth of Australia’s future business capability.  The support it provides through funding and access to business and mentoring networks is a key element of the business building process for Australian companies, entrepreneurs, researchers and inventors looking to commercialise innovative intellectual property. In the last four years, Commercialisation Australia has assisted some 503 Australian companies.  On average, for every dollar of grant funds invested in the program, two dollars of private sector capital was invested subsequent to companies being awarded a grant. The leverage effect generated by the program and, in particular, how Commercialisation Australia has provided critical mass deal flow to both domestic and international investors looking for early stage opportunities is clear. Without the support of Commercialisation Australia, companies that have attracted funding would not have been able to commercialise their intellectual property and attract investment. While Commercialisation Australia is important in assisting businesses from all sectors, the fact that some 50 per cent of companies supported by them over the last 4 years were utilizing ICT in their new product and service development is of particular relevance to the ICT sector. The role of ICT driven businesses, especially new, innovative companies that have the potential to drive Australia’s export capability and international competitiveness is imperative to Australia’s ability to compete in a global economy.  Commercialisation Australia is a critical element of the overarching eco-system that Australia needs to drive innovation and business growth.  The future of Commercialisation Australia must be guaranteed to maintain the confidence of existing and aspiring early entry businesses. Members have advised that as of March 2014 Commercialisation Australia is not accepting new applications or requests for funding extensions. I understand this includes requests formerly accepted by Commercialisation Australia for assessment prior to March 2014, and that the decision to review all grant spending across the Department of Industry was made last year. Notwithstanding this decision Commercialisation Australia has continued to canvas for new project submissions until, as recently as February 2014.   As a consequence members have outlaid considerable time and expense preparing submissions for grant assistance and developing commercialisation plans.  In planning for their growth in this way and to manage their limited resources they have forgone shorter term business opportunities.  The fact that no public announcement was made by the Government that grants were suspended has created unnecessary pressure for entrepreneurs who have applied significant investment in good faith, to a process Government had already decided to suspend. This damage will be multiplied across the business eco-system overall should Commercialisation Australia cease to operate. I am seeking open and transparent assurance from the Government that it remains committed to the continuing operation of Commercialisation Australia and that this includes the full scope of activities and support it currently provides.   Yours sincerely, Suzanne Campbell chief executive officer Australian Information Industry Association

Commercialisation Australia grants on hold: where the $200 million+ has gone

4:19AM | Thursday, 10 April

The federal government’s venture capital organisation is on hold, with the Department of Industry announcing applications will not be accepted or processed until after the May 2014 budget.   This is not the first time the Commercialisation Australia grants have been frozen pending a review, with an earlier freeze occurring in late 2012.   StartupSmart understands from several sources that there is concern within the department that a component for startups, rumoured to be the early stage commercialisation funding segment, may be abolished post-May.   To get a sense of the importance of Commercialisation Australia to the industry we took a look at its currents stats.   Commercialisation Australia chief executive Doron Ben-Meir also declined to comment on the speculation.   Since its inception, Commercialisation Australia has invested over $213 million in 503 companies (as of February 2014).   The organisation funds companies at four key stages. These include a grant of up to $50,000 to access specialist advice; up to $350,000 to hire experienced senior executives; up to $250,000 to prove commercial viability of an idea; and between $50,000 and $2 million to assist early stage commercialisation.   Queensland has received the most funding deals with 134, followed by New South Wales at 126, Victoria at 116, Western Australia 63, South Australia 34, Canberra 15, Tasmania 12 and the Northern Territory three.   Almost half of the funding (42%) went to manufacturing and engineering startups, 33% to software and web design, 13% computer systems and hardware and 12% biotechnology.   Government venture capital can be particularly potent in emerging ecosystems. For example, much of the investment in Perth tech companies so far has included backing by Commercialisation Australia.   Recent investments include admin efficiency app Breezedocs, workplace app SafetyCulture, customisable radio app Omny, campus surveillance app CriticalArc, and epublishing software LiquidState.   The full list of grant recipients, amounts and industries is here.

Breezedocs receives $250,000 in Commercialisation Australia funding

3:29AM | Thursday, 13 March

Automated document processing start-up Breezedocs has locked in a $250,000 grant from Commercialisation Australia, the federal government’s venture capital organisation.   The start-up has been developing the product for two years. They launched a beta round as an entity called OneTouch and launched to the market in August 2012.   Co-founder and managing director Hany Pham told StartupSmart they waited until they were sure they met all the criteria before applying.   “Commercialisation Australia is great but it’s a tricky little window you need to be in, post research and development but pre-revenue,” Pham says, adding while they’re making revenue now they had minimal revenue when they applied.   “As an enterprise start-up, you launch quietly and if that doesn’t work as great as you hoped you launch again with the feedback from the users.”   In a statement, Commercialisation Australia chief executive Doron Ben-Meir said their support of Breezedocs went beyond the invested funds.   “In addition to grant funding, Commercialisation Australia provides companies such as Breezedocs with access to our expert network of successful entrepreneurs, domain experts, professional investors and strategic corporates which helps them get to where they need to be faster.”   The funds will go towards building the engineering team and expanding their Australian operations and customer network.   Breezedocs intends to launch an office in the United States in late 2014 and have already begun working with clients.   “We’re already getting started there so we’re up late at night doing phone calls for the US time zone and why we always sign off our emails with the US number,” Pham says.   This is the start-ups second funding round, after raising $250,000 in 2013 private equity investors including Angelcube accelerator co-founder Adrian Stone and economist Nicholas Gruen.

Silicon Valley mentor warns Perth start-up community to unite or collapse

3:15PM | Monday, 10 March

The Perth start-up community has welcomed a warning by leading international start-up mentor to unite or fail, saying they’re already collaborating well.   In an interview with Business News Western Australia, Silicon Valley-based Adeo Ressi said Perth has many things going for it in its bid to become a tech hub.   “I think Perth could go one of two ways. It seems to have a flourishing ecosystem, but the players within it need to make a choice – they either collaborate and grow or they will splinter and things will not develop so well,” Ressi says.   Ressi is the founder of global accelerator program The Founder Institute. Perth was the first chapter it opened in Australia.   He adds the risk of splintering is especially high when there is government money available, as competition between groups slows the pace of development.   “I urge those involved to get together and build the community,” he says.   Startup Weekend Perth coordinator Sam Birmingham told StartupSmart all small ecosystems risk splintering but his local one is fairly united.   “We have quite an established collaborative ecosystem. Spacecubed is the node of most of that. With all the events happening there we tend to all overlap and work with each other,” Birmingham says.   Not only do the Perth chapter of the Founder Institute and the Startup Weekend initiatives share mentors, Birmingham says they’ve developed a bit of a pipeline for the whole community.   “We’re all working together to nudge them in the right direction,” he says. “It’s all about getting them onto the band wagon so we can all roll forward together.”   Non-technical founders are directed towards a breakfast meet-up, Morning Startup, and technical co-founders towards Startup Weekend.   “There are always things that can be improved,” Birmingham says. “My instinct here is one part may grow faster than the other and you’ll end up in a bottle neck. We need to create more success stories so more people want to come in at the entry level and that’s what we’re really looking forward to.”   According to a report published in September last year, Perth now has over 100 tech start-ups and 2,500 people actively involved in the community.   The report found while private and venture capital investment lags behind the national average, it is taking off, largely led by federal government initiatives Commercialisation Australia and the Innovation Investment Fund.   Commercialisation Australia invested $12.6 million in grants in Western Australia last year, which amounted to 18% of their available funds. These funds were matched by $12.6 million in venture capital and private equity funding.   Report publisher Jonah Cacioppe told StartupSmart they were at the cusp of taking off.   “We’re like a baby that’s about to start standing soon. But what we do need is more access to money. Getting from the stage of mates working on an idea to being a funded company is still a tricky path in Perth.”   Perth recently hosted a national app development conference that attracted international investors.

Where to find a government grant

9:13PM | Monday, 30 September

Starting your own business may feel like a daunting, lonely experience, but it doesn’t have to be that way with government support available if you know where to look.   There are hundreds of government funding and assistance schemes available to businesses in Australia.   Mike Boorn Plener, convener of the annual Grants Connector event, says that grant money is just business funding and that the only difference is that business owners don’t need to pay it back, just report how the money was used.   “The government is mainly looking for a return to society rather than a fiscal return on investment,” he says.   Here we look at several ways that businesses can and do use government funding to grow and develop and where to find it.   Proof of concept   Many people have a great idea but do not have the funds to turn that idea into a reality. But if you can show that your idea will benefit society, there is funding available to turn that idea into an actual concept.   A key place for funding is Commercialisation Australia, which offers proof of concept funding of $50,000-$250,000. Participants have to match the grant funding on a 50:50 basis with the participant funding half of the costs. For example $50,000 from the participant and $50,000 from Commercialisation Australia.   Research and development   If you’re doing research and development, you may be eligible for a tax benefit.   The R&D Tax Incentive aims to help more businesses do research and development and innovate. It’s also broad based, meaning it’s open to firms of all sizes in all sectors conducting eligible research and development.   The scheme’s two-core components include:   A 45% refundable tax offset (equivalent to a 150% deduction) to eligible enterprises with a turnover of less than $20 million a year; A non-refundable 40% tax offset (equivalent to 133% deduction) to other eligible businesses.   “One of the beauties of the R&D Tax concessions is the government gives you back a portion of what you’ve spent already,” Plener says.   “Business owners constantly get surprised that what they’d consider to be ‘we’re just developing our product’ is, in the eyes of the government, considered research and development.”   Export   One of the key grant programs available for businesses wanting to improve their markets overseas are Export Market Development Grants.   Administered by Austrade, the scheme supports a wide range of industry sectors and products, including inbound tourism and the export of intellectual property and know-how outside Australia.   Plener suggests that some businesses struggle to attract clients in Australia so they access funding and export their services overseas. This then builds their reputation in Australia as the international experience adds credibility.   Under the scheme, small and medium-sized businesses are encouraged to develop export markets.   It reimburses up to 50% of eligible export promotion expenses above $10,000 provided that the total expenses are at least $20,000. It also provides up to seven grants to each eligible applicant.   To access the scheme for the first time businesses need to have spent $20,000 over two years on eligible export marketing expenses.   Hiring new employees   If your business is growing and you’re considering taking on staff there are several grants available to encourage employers to hire.   “Keeping work in Australia is something that the government likes to support,” Plener says.   If you’re considering taking on an apprentice, you could access the federal government’s Australian Apprenticeships Incentives Program.   There are also a range of subsidies available for hiring long-term unemployed and people with disabilities.   Agriculture and food   Agriculture is being touted as the next big industry to take up the slack of Australia’s slowing mining sector. And with Asia’s middle class set to boom, the opportunities to feed populations to our north with higher incomes is increasingly impossible to ignore.   Food producers may consider seeking export grants or consider funding from Commercialisation Australia if they have a product or idea that can improve agricultural production.   Energy savings   Cutting down on power bills is one way businesses seek to manage their costs. Certain states have energy saving schemes which businesses can tap.   With the National Australian Built Environment Ratings System (Nabers) measuring the environmental performance of buildings, energy saving can have a significant commercial impact.   So if you’d like to improve the Nabers rating of your business, you might want to install LED lighting, which could attract government assistance.   In NSW there’s the Energy Savings Scheme, Victoria has the Energy Saver Incentive Scheme, Queensland has its ecoBiz Queensland, while in South Australia there’s the Business Sustainability Alliance.   Significant event   If you’re planning an event that could bring in people from outside your area, you may be eligible for support.   Large cities and regions are especially aware of the benefits events such as conferences can have for tourism and raising their profiles.   For example, the City of Sydney offers grants for events and, not to be outdone, Melbourne also offers event grants.   Medical devices and developments   Australia has a proud history of innovation in the medical field.   The cochlear implant was invented in Australia while a vaccine for cervical cancer was developed by Australian researchers.   Australia’s National Health and Medical Research Council administers grants for medical research.   Commercialisation Australia may also be a source of funding in this area.   Other support   Ben Cusack, principal at grants consultancy Bulletpoint, has pointed out a number of other government programs that can assist businesses such as:   Enterprise Connect This federal government initiative offers a free comprehensive business review. At the end of the review a business can apply for a Tailored Advisory Service grant for half the cost of engaging a consultant to make improvements up to a maximum of $20,000.   TCF Small Business Program Provides grants of up to $50,000 for projects to improve the business enterprise culture of established small textile, clothing and footwear businesses. The business must make an eligible product in Australia or design an eligible product to be made in the country, have less than 20 employees, a turnover of at least $100,000 and provide a minimum cash contribution to the project of 25% of eligible expenditure.   T-QUAL Matched funding for small-scale tourism projects. These grants provide funding of between $15,000 and $100,000 to support collaborative tourism industry development projects, particularly those that stimulate private sector investment. Its website says that grants are currently on hold following the federal election.

Commercialisation Australia quarterly snapshot reveals $178.1 million going to 430 companies

7:45AM | Friday, 12 July

The latest edition of Commercialisation Australia’s Value Proposition publication has revealed where government funds are going to support start-ups at the commercialisation stage.   New South Wales received the most funding, with $56.8 million going to 110 companies. Queensland has the most businesses and researchers funded, with $36.1 million going to 114 companies.   Businesses focused on health and medical ($44 million), business and communication ($29 million), and energy, mining and resources ($26.1 million) are receiving the majority of the $178.1 million in funding.   The leading industry achieving funding in South Australia ($5.4 million), Victoria ($11.7 million) and New South Wales ($16.1 million) was health and medical.   Mining, energy and resources was the leader of industry investment in Western Australia, at $10 million. Only two companies in the Northern Territory received funding, totalling $650,000.   The defence and security industry received the most investment in the Australian Capital Territory with $2.4 million, and food and agriculture in Tasmania at $887,000.   Of the 430 businesses or researchers receiving funding, 18% are in regional Australia.   Doron Ben-Meir, chief executive of Commercialisation Australia, wrote it was hardly surprising regional small and medium-sized business had more negative views about the economy than metropolitan ones, according to recent findings of the Australian Bureau of Statistics.   “Aspiring entrepreneurs in the vastness of regional Australia confront many challenges not faced by their city contemporaries, from a lack of readily available to expert advice to a plethora of communication and transport issues,” he wrote. “Yet the regions have a critical role to play in keeping the economy vibrant, with primary industries alone making up close to two-thirds of Australia’s exports.”   David Mac Smith, a Commercialisation Australia case manager, described access to capital as especially hard.   “Money is always an issue, because access to funding is significantly worse than in the cities,” Smith says in the magazine.   “One of the consequences of this undercapitalisation is that businesses grow at a slower rate.”   The full report and previous issues can be downloaded here.

Start-ups highlight lessons learnt at Advance Innovation pitch-fest

2:01AM | Monday, 18 February

Entrepreneurs have spoken of their experiences at the “start-up pitch-fests” held for the Advance Innovation Program, highlighting the importance of preparation and the structure of your pitch.

Controlabill pockets $609,000 from Commercialisation Australia

3:13AM | Friday, 15 March

A start-up founded by former bank executives is among the latest round of companies to receive grants from Commercialisation Australia, pocketing $609,000 for its bill payments system.

Government lifts two-month freeze on clean tech programs

3:32AM | Tuesday, 12 March

The Federal Government has resumed its Clean Technology Investment Programs following a two-month freeze, but there are fears that the pause will have had a negative impact on prospective grant recipients.

Start-up gathering TiECON Sydney launches “25 words or less” comp

9:54AM | Monday, 24 September

Entrepreneurial convention TiECon Sydney has launched a “25 words or less” competition, offering the winner a two-hour timeslot at its conference, as Australian start-ups vie for prizes in increasingly unusual ways.

TiECON Sydney to dole out $50,000 through start-up pitch contest

9:34PM | Tuesday, 4 September

Start-ups have been given an 'open door' chance at the TiECON Sydney event to land $50,000 from angel investors, with organisers claiming that the initiative is an opportunity for new ventures to hone their pitches.

Microsoft crowns taxi finder app goGatch as top Asia Pacific start-up

7:25PM | Tuesday, 10 July

Taxi location app goCatch has been named winner of Microsoft’s APAC Startup 2012 Award, after pitching its ambitious international plans to a panel of judges.

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