The following information provides an overview of the major ICT programs established and supported by the Australian Government arranged according to the development stage of a business.
The Commonwealth Government announced the Pre-seed Fund program as part of the Backing Australia’s Ability initiative.
The objectives of the Pre-seed Fund are:
- To encourage commercialisation and private sector investment in university and public sector research.
- To build linkages between universities and public sector research agencies and the finance community.
- To build entrepreneurial and intellectual property management skills in universities and public sector research agencies.
- To encourage researchers to consider the commercial potential of their research.
Under the program, four fund managers – Allen and Buckeridge, GBS Venture Partners, SciVentures and Starfish Ventures – were selected to invest more than $100 million in projects or companies spun off from universities or Commonwealth-funded public sector research agencies. The Commonwealth is providing $72.7 million of the capital, with the balance provided by private investors and the universities and public research bodies themselves.
The fund managers take a financial interest in each project or company and provide management and technical advice to develop the commercial potential of the R&D. The maximum investment in any project or company is $1 million. Ultimately, the fund managers will divest their interest in the project or company to later-stage investors once it has reached maturity.
Researchers seeking pre-seed funding should approach fund managers directly, as each maintains its own operating arrangements. For further information, including fund manager contact details, visit AusIndustry.
Launched in 1999, Building on IT Strengths (BITS) was a five-year, $158 million program designed to build the strength and competitiveness of the Australian information and communications technologies sector. Its aims included fostering much stronger linkages between R&D organisations and commercial ICT businesses and the creation of clusters of innovative IT&T businesses. The programme was extended in 2004 and will continue through to 2007–08 with extra funding of $36 million over four years. This builds on $86 million in funding for eleven incubators to date, for a total of $122 million.
Launched in November 1999, the Commercialising Emerging Technologies (COMET) program focuses on innovation and its commercialisation.
COMET is designed to increase the commercialisation of innovative products, processes and services, by providing individuals, early-stage growth firms and spin-off companies with a tailored package of support to improve their potential for successful commercialisation.
Help for successful applicants will include supporting paths to commercialisation such as:
COMET supports activities in the areas of management skills, business planning, market research, intellectual property strategy, working prototypes and proven technology.
The Innovation Investment Fund (IIF) program aims to increase access to equity capital (venture capital) to encourage new technology companies to commercialise Australian research and development.
IIF invests in nine private sector venture capital funds that work with small companies in the early stages of commercialisation and product development. These nine IIF-licensed fund managers make all investment decisions in relation to the final use of IIF funds. Full details of the nine IIF-licensed funds are available on the AusIndustry website.
The Pooled Development Funds (PDF) program is designed to increase the supply of equity capital for growing Australian small and medium-sized enterprises. It aims to increase the supply of equity capital for early-stage companies through pooled development funds (PDFs).
PDFs are private companies, established by legislation, that raise capital from investors and use it to take equity in Australian SMEs. In return, PDFs and their shareholders are taxed at a lower rate on income generated through PDF activities.
The PDF program provides opportunities for venture capitalists, investors and early-stage companies as vehicles for investment.
PDFs may be a source of finance for Australian technology companies seeking to grow through external finance.
R&D Start Grant is a competitive, merit-based grants and loans program that supports businesses to undertake research and development and commercialisation. Projects must involve R&D, but can also include related product development and market research. Projects should have clearly identified commercial potential and applicants need to be able to demonstrate that they are able to fund their share of project costs. Grants up to $15 million are available, however, they typically range between $100,000 and $5 million. The scheme has recently been reviewed and new applications will be accepted from 28 November 2003.
Export Finance and Insurance Corporation (EFIC), a specialised financial services organisation, has helped Australian exporters and investors for 50 years by providing finance, guarantees, insurance and bonding facilities. EFIC is a self-funding statutory corporation and operates beyond the limits of the commercial market, providing support when financial, country or industry risks exceed the capacity available in financial markets.
EFIC Headway can help small to medium-sized exporters access more working capital for export growth. EFIC Headway is a guarantee from EFIC to a bank that allows the bank to extend existing lending facilities to their SME clients without requiring additional security. The guarantee supports general export funding rather than a specific export transaction.