After many setbacks, Australia’s venture capital start-up industry started achieving critical mass – “the most important change” in our capital markets.
that Australian start-ups broke the record in the first quarter of 2022 for the most capital raised in a quarter, “banking $3.6 billion in venture capital funding thanks to the enormous amount of dry powder available in the sector”.
Looking back, Australian venture capital pioneer Bill Ferris recalls: “We did our first internet deals [Look Smart] in the ’90s.” But funds dried up after the Nasdaq collapse. Since then, “it’s just gained every year more and more”. “For the government, that growth is really important. It reflects the single strongest area of jobs growth, especially for people under 30.”Private capital as opposed to public capital has become a fundamental pillar of Australia’s capital markets, Ferris says. “That’s something you couldn’t really say before 2010. It’s the most significant and important change in our capital markets in our lifetime.
Now super funds “can make a commitment to a given funds of $200 million or more and provide the long-term capital that you need in these entities. The liquidity is not as obvious as in the public market where you ring up and buy or sell shares”.“In the past the wealth creation industry had been concentrated in real estate [but] investing in a dozen venture capital funds and backing them gives a spread of risk.
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