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Startup dynamics have changed, but industry associations have not kept pace

Australian Private Equity and Venture Capital Association Ltd (AVCAL) and theAustralian Association of Angel Investors (AAAI) were formed long before the occurrence of the dynamic shifts democratising how and where startups are formed.

In contrast to 15 years ago when large amounts of capital were required to pay for a startup’s infrastructure requirements, today the cost of starting up and the lifetime capital required by technology startups has decreased dramatically (see illustration).

To date, industry associations have been unable or unwilling to adapt and cater to the key participants in the thriving seed/angel stages of a new high growth venture’s life cycle.

Unfortunately, this means that government attempts to assist in creating a thriving startup/innovation culture in Australia are often misdirected as they are seeking advice from organisations that espouse models that have not adapted to the new industry dynamics.

At the same time, no new comprehensive champion has emerged representing the disparate and dynamic constituents of the broader Australian startup ecosystem – universities, seed and angel investors, equity crowdfunding platforms, micro VCs, accelerators, incubators, co-working spaces, entrepreneurs, startups.

Although StartupAus is a welcome, and more recently formed, lobby group/association representing the  interests of entrepreneurs within the startup community there is no similar group that properly represents the rapidly emerging early stage investors, including individual seed/angel investors, micro VCs, equity crowdfunding platforms and university/corporate platforms.

Maybe AVCAL or AAAI can adapt, although most incumbents find it challenging to self-disrupt. It is more likely to be a new, innovative, broadly representative, practioner-led group.

Twitter: artesianvc