Three Australian VC firms receive IIF backing

Carnegie will receive A$40 million, while GBS and Innovation Capital will get A$30 million each.

"This is a huge boost for Australian start-ups," Greg Combet, minister for climate change, industry and innovation, said in a statement. "These new fund managers will provide crucial equity capital and essential management expertise to a whole range of promising companies across the economy."

The IIF was set up in 1997 as a co-investment scheme whereby the government licenses fund managers and provides capital for investment to support small- and medium-sized enterprises (SMEs). It has established 16 funds through three rounds of funding since 1998. In the previous round of funding, which took place in 2006, A$200 million was made available to create up to 10 new funds.

Last month, the government said it would provide a further A$350 million in new funding to IFF as part of a wider initiative that will see A$1 billion committed to spur job creation. It also pledged to recycle any money returned by the sponsored funds back into the program.

In a further boost to the VC community, the government clarified the tax treatment available to funds using the early stage and venture capital limited partnership (ES/VCLP) structure. Any gains arising from the disposal of an eligible venture capital investment - held for at least 12 months - will be treated as a capital gain rather than business income, which means eligible domestic LPs won't be liable for local tax.

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• Australia
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