A leading investment funds advisor has called for reforms that could potentially save Australian start-ups from going under.
Atlas Advisors Australia has proposed an increase in investment threshold for the 188B Investment Visa from $1.5 million to $2.5 million for metropolitan regions, which should include the major cities of Sydney, Melbourne and Brisbane.
The company suggested all three cities should operate under the same investment framework as the Significant Investor Visa stream rather than the current investment allocation to state government bonds.
Atlas Advisors Australia executive chairman Guy Hedley said two new categories should be created for metropolitan and regional venture capital investment for businesses in “urgent need” of stimulus.
“This would ensure maximum economic benefit for metropolitan and regional economies instead of directing investment into liquid or well-supported markets such as property, and mature operating or listed companies,” he said.
“It would also encourage some businesses to relocate from metropolitan centres to regional centres to obtain funding support.”
Investment allocation towards venture capital funds should increase from 10 per cent to 20 per cent under a single complying framework for the Investor Visa and Significant Investor programs, according to the Atlas Advisors statement.
A lower value should be required for investment into regional areas, but with a focus on regional venture capital to encourage “best outcomes” for job creation.
“This could provide a vital boost for venture capital and seed stage startups, which are being hit hard by the economic impact of the COVID-19 pandemic,” Hedley said.
“Supporting and strengthening our local economies will help us create new jobs, accelerate innovation and encourage the development of new technology, businesses and industries.”
Atlas Advisors Australia recently urged the federal government to reopen applications under the SIV program and give priority to fast-track urgent applications.