AVCAL welcomes government innovation support
9 June 2011
The Australian Private Equity and Venture Capital Association (AVCAL) welcomes the independent evaluation of the Commonwealth Government’s Innovation Investment Fund (IIF) program and the government’s support for an ongoing commitment to a “national innovation system”.
AVCAL CEO Dr Katherine Woodthorpe said government support for early stage and start-up businesses with innovative ideas is crucial for Australia, in order to grow entrepreneurial and venture capital successes such as Seek, LookSmart and numerous medical companies.
“Without the IIF enabling equity investments to younger and smaller companies in Australia, we would not have had some of the successful new companies now operating in the technology and medical fields,” she said.
Dr Woodthorpe said the two IIF assessment reports released this week by the Government found the IIF program filled a funding gap and then led to subsequent funding for those firms by private sources of capital , thus promoting a cycle of “follow-on financing” independent of the program.
“I applaud Innovation Minister Senator Kim Carr’s acknowledgement that an innovation fund ‘is essential’ and look forward to further policy discussion around how to achieve this with the final round of IIF program money being allocated this year,” she said.
“Unfortunately there has been no indication of on-going support once the IIF program concludes this year.”
The IIF was designed to promote and support the development of young enterprises in the Australian economy and to help in the parallel development and establishment of a venture capital industry. Today, the Minister announced the recipients of the latest round of IIF funding.
The independent assessment “has found that the rationale for the three rounds of financing for the IIF program remains valid”. However, there is uncertainty surrounding the future of the program after the current funding round is fully disbursed.
To date the IIF program has enabled a pool of $524 million of government and private capital to invest in over 100 promising early-stage companies since 1997. Other IIF successes include the respiratory diseases drug maker Pharmaxis, therapeutic product manufacturer Alchemia, pain management drug maker QRxPharma, online mortgage broker eChoice, and mining services company Gekko Systems.
Media contact: Stuart Snell ph +61 (0)2 8243 7001, (0)416 650 906, email@example.com.
Author: Adrian O’Shannessy, Director, Greenwoods & Herbert Smith Freehills