VC-backed companies lead the way in Australia R&D - study

In addition, despite accounting for just 0.01% of national GDP, VC-backed companies are responsible for around 10% of overall business R&D expenditure.

"It is clear from the report that the VC industry is vital for true innovation in Australia," said Dr Katherine Woodthorpe, AVCAL's CEO, in a statement. "VC-backing has been the catalyst for ideas being transformed into commercial realities, creating new highly-skilled jobs and creating new and innovative companies that have become market leaders in their own right."

The report, which states that around 500 companies in Australia have been backed by VC compared to in 24,000 in the US, is intended to highlight the positive economic contribution of an asset class that has struggled since the global financial crisis.

According to AVCJ Research, VC investors attracted $137 million in 2012, the highest level in six years, but the majority of this capital went into one fund - Carnegie Private Opportunities Fund - which is expected to make a mixture of growth and venture investments. Entrepreneurs have also criticized the industry for its perceived conservatism.

However, there have been some encouraging signs in recent months. In February, the Australian government announced it would provide A$350 million ($360 million) in new funding for the Innovation Investment Fund to support small- and medium-sized enterprises (SMEs).

Improvements have also been made to the early stage and venture capital limited partnership (ES/VCLP) structures through which funds investing in SMEs qualify for flow-through tax treatment.

In March, start-up GP Blackbird Ventures reached a first close of A$20 million on its A$30 million internet-focused venture capital fund. The firm leveraged a network comprising Silicon Valley- and Australia-based super angels.

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• Topics
• Venture
• Australasia
• Australia
• Venture
• AVCAL