David Burt, Executive Manager of CSIRO’s ON
Last month KPMG released it’s Venture Pulse report which found Aussie entrepreneurs received a record-high US$630 million in investment last financial year. However, despite the increasing number of resources founders can now access, we continue to fall behind other countries. We’re all familiar with the recent Global Startup Ecosystem Report, which saw Sydney and Melbourne’s ranking fall. So what’s behind the dip?
As a nation, we have a plethora of ingenious early-stage startups in areas such as agriculture, food processing and robotics. These startups are the key to Australia’s future innovation prospects. The missing piece is ensuring these businesses have adequate access to support networks and capital to get off the ground and scale up successfully.
Starting at the beginning
Australia has a high-wage economy but we don’t have a culture of risking the security of salaries to start a new company. According to the 2018 Startup Muster Report, over 70 per cent of founders are paying themselves less than they were earning in their previous job, as many founders treat their startups as a side-hustle to their main career.
Easier access to funding would give startup founders the opportunity to devote themselves entirely to the business and immerse themselves in the industries they are shaping.
Our recent partnership with the Menzies Foundation to launch the Menzies Science Entrepreneurship Fellowships is just one example of why ongoing support is needed for early-stage startups within their respective industries. The Fellowships is about supporting the nation’s most talented science entrepreneurs in the early stages of commercialisation, to help turn their ideas into the industries of the future.
This access to deeper levels of funding also gives these startups the chance to not only see how they can take their businesses in new directions but also examine what parts of the business may need to be altered. As startups mature, founders may identify aspects of the business that are surplus to requirements such as departments that no longer serve a purpose, and pivot accordingly. Ultimately, these means of funding startups enable them to take more risks and embrace growth opportunities by the horns.
Support networks make or break startups
There are now more than 100 different accelerators supporting start-ups across the country, and they play a vital role in helping these companies reach different milestones. However, an issue which doesn’t get enough attention is the support that exists after those programs, or in a lot of cases, a complete lack thereof. By their very nature, accelerator programs are focused on pushing as many startups through the program as possible. This may provide a surface level perception of successfully nurturing startups when in reality this support evaporates after the program concludes.
The period after completing an accelerator program can make or break many startups. The transition away from the round the clock guidance and mentoring offered in an accelerator program can make many founders feel isolated once they graduate, so it’s crucial that these business leaders continue to receive advice and the associated networking support to keep their businesses growing.
Nurture for the future
With so many forward-thinking startups popping up across the country that will inject growth into the economy, we must ensure they have adequate access to capital and support networks throughout the entire process to ensure they can scale successfully.