With Aussie venture capitalists reeling and several start-ups bolting overseas, the Australian government is going to provide up to AUS$83 million to early stage start-up companies in response to what it sees as a lack of funding due to the global financial crisis.
Dubbed Innovation Investment Follow-on Fund’s (IIFF), their aim is to ensure a future beyond the financial crisis for outstanding start-up companies that are doing groundbreaking work in cutting-edge areas like clean energy, biotechnology and ICT. The follow-on funding will go to over 20 venture capital fund managers licensed by the Commonwealth under existing programmes.
The move is partly in response to the call for action by the Review of the National Innovation System 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.
A far cry from Thomas Friedman’s flawed idea of giving the top 20 VC’s in American a billion dollars each.