Paul Wallbank's article Tony's partying like it's 1979 paints a depressing future for tech startups in Australia.
...prominent investor Mark Carnegie said: “The truth of the matter is, Australian venture capital as an industry has been an unmitigated disaster. A trained monkey could have done better than the professional venture capital industry in Australia.”
I realised that when I think of the venture capital industry, I think the USA, not Australia. I didn't even consciously consider the fact that there is such an industry here! That's telling.
Key issues working against the next startup:
- The federal government wants to bring in red tape to crowdfunding.
- Australian banks are addicted to lending to real estate, bricks and mortar investments.
- Fear after the 2008 financial crisis locks banks into fearful short term and risk adverse thinking.
- Australian superannuation funds are reluctant to lend to tech startups.
- There's no outstanding local success stories. This is a vicious cycle. Any startup with potential goes overseas and become successful there!
- We lack meaningful reforms such as employee share schemes. This is a failure of the government.
- Relative to what the UK and Ireland are doing, the current Abbott government is focused on resources and roads. "... a strong vision for a nation striding confidently towards the 1970s." Massive vision and leadership fail.
No wonder high tech startups move to more favourable shores like Singapore and the UK. At least one of my clients have done exactly this within the last 5 years. Things are not looking good.
Source image courtesy Shutterstock.
