Industry minister, Senator Kim Carr, has announced that the Australian Government will provide up to $83 million to early stage start-up companies — who have been starved of funds due to the global financial crisis.
“The Innovation Investment Follow-on Fund (IIFF) is about ensuring a future beyond the financial crisis for our best and brightest start-up companies.
“These firms are the next Cochlear, Gekko Systems and ResMed. They are doing ground-breaking work in cutting edge areas like clean energy, biotechnology and ICT.
“If we lose these innovative companies we will never get them back.
“The companies that could benefit from this fund employ at least 1000 people in high-skill, high-wage jobs.
“In order to help these firms ride out the financial storm, $83 million will be offered in follow-on funding to over twenty venture capital fund managers licensed by the Commonwealth under existing programs.
“The fund managers will use this money to invest in innovative firms bringing promising new technologies and services to market.”
Carr said, the IIFF is one of a number of initiatives the Government has announced to assist the flow of capital into Australian firms.
“Making money available for reinvestment will boost confidence and help shake loose additional private sector capital.
“The Review of the National Innovation System called for action to improve the supply of venture capital in Australia.
“The Review emphasised the importance of a functioning venture capital market to a healthy innovation system.
“The Government has been actively consulting with the venture capital sector about the impact of the financial crisis and their message has been clear: without access to capital now, good prospects will fail, and venture capital funds will have no capacity to support companies with great ideas and technologies.
“The Government will be providing a full response to the Review of the National Innovation System as part of the budget process, but today’s announcement is an important part of building a stronger national innovation system.
“It is essential that we help these fledgling companies ride out the crisis,” Carr said.
The Government plan to finance the IIFF by reinvesting money that has been returned to the Innovation Investment Fund when firms it supported were floated or sold. Funds will flow to companies as soon as possible.