The 2nd quarterly Artesian Investor Update and Early-Stage Innovation Briefing was held at KPMG offices in Melbourne on 9 July 2015.
The focus of the meeting was the future of innovation in Australia from the perspective of each startup ecosystem participant: investors, corporations, government and incubators/accelerators. Corporate presenters included HOSTPLUS Super, STC Australia, ICT Innovation (VIC Department State Development and Business Innovation) and BlueChilli. Startups included VenueMob, CriticalArc, Zapala Go and Fame and Partners.
The three key trends shaping the future of the Australian startup landscape discussed are:
- Rise in corporate venturing: Corporate venturing in early stage startups, is a combination of financial and strategic return. It is distributed research and development capturing the benefits of open innovation. Decreasing startup costs coupled with the low barriers of entry has led to technology and innovation disruption across all sectors albeit with a far bigger pipeline requiring a scalable pre-screening strategy. Corporates are increasingly interested in the diversity of opportunities offered by the startup ecosystem and will increasingly be a key partner, customer and exit alternative for startups.
- Adoption of equity crowd funding: Equity crowd funding has the potential to make a material impact on the amount of capital available to entrepreneurs in Australia. With legislative changes and deregulation, the pool of “wholesale” investors is expected to increase dramatically, positively affecting how startups access capital resources. We expect that over the next 5 years equity crowd funding could double the current amount of capital available to early stage ventures.
- Building the ecosystem from bottom up: To date, governments have tended to adopt a top down approach towards creating the venture capital industry, for example, the now discontinued IIF program. Only a very small percentage of startups scale and achieve trade sale exits, IPOs or international venture capital growth trajectories. To increase the number of these successes, it is imperative to have a pipeline or funnel with an extremely broad base. We believe that by taking thousands of small bets across a highly diversified range of startup opportunities, there is a far greater chance of nurturing a larger number of successful late stage exits. A virtuous circle of exits and reinvestments are the key to fuel a sustainable startup ecosystem in Australia.
Artesian & KPMG Early-Stage Innovation Briefings are special events reserved for Artesian Venture Capital Fund investors only. To find more about how you can become an investor and gain access to exclusive events and research, visit our product page or request a follow up.