The tight venture capital market, brought on by the global financial crisis, and the withdrawal of the Federal Government’s Commercial Ready grant last year have threatened the viability of start-ups with research and development projects.
Spokesperson for GBS Ventures Brigitte Smith says the majority of companies in the life sciences sector have less than a year of cash left and, unless an injection of capital occurs, these companies could fold.
“There will be tremendous attrition in the innovative life science space; they can’t just cut costs and scale back because they’re cash-consuming and trying to build an asset so instead, many will perish,” she said.
The government will replace Commercial Ready with other initiatives. The Department of Innovation plans to open two innovation centres in Newcastle and Bendigo, which will allow for $20,000 matching grants. Other programs will provide funds on a smaller scale and the department has indicated there will be further grants development soon.
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