Investors still backing Australian entrepreneurs and start-ups

26 August 2011

MEDIA RELEASE

The investment environment remains competitive but favourable for Australian start-ups, according to speakers at business incubator ilab’s Annual Investment Summit.

The Summit was held in Brisbane yesterday and brought together investors from the angel and venture capital communities to explain the process of raising capital for entrepreneurs.

Keynote speaker and RedFlow Limited Chief Executive Officer, Phil Hutchings said Australian investors were still more than willing to fund start-ups with promising new technologies.

“There is more money available for investment in Australia than people credit, but you need to have a strong business case, an experienced management team and a good market position,” said Mr Hutchings.

“If you, as an entrepreneur, find yourself saying ‘this is not a good environment to be raising money’, then to be honest the problem rests with your business proposition and not with the market,” he said.

“People have to stop making excuses for failing to secure investment because it’s just not true that Australian investors don’t like risk. The reality is that if a start-up couldn’t secure investment then the company probably wasn’t worth investing in. The market’s a very good filtering system.”

The experienced clean-tech CEO told entrepreneurs at the ilab Summit that there was “no magic bullet” to ensure a start-up’s success. However, he shared his practical experience in securing more than $25 million investment for RedFlow (an energy storage company and graduate of ilab’s incubation program) in both its unlisted and listed phases of growth.

ilab Chief Executive Officer Colin Kinner, said the Summit provided valuable insights into the investment strategies of angel and venture capital investors as well as perspectives from successful entrepreneurs.

“ilab’s role as a business incubator is help accelerate the growth of emerging technology-based ventures into successful businesses,” said Mr Kinner.

“Raising money is one of the most crucial and the most difficult parts of a new business venture, and the reality is that most start-ups don’t get funded, but there is money around,” he said.

“It’s highly competitive and entrepreneurs need to know how to position their companies: their technology needs to be exceptional, their business has to be scalable, and they have to be planning for an exit.”

One of the world’s leading experts on exit strategies for high growth enterprises, Dr Tom McKaskill, also spoke at the Summit. A serial entrepreneur and angel investor, Dr McKaskill is an authority on how entrepreneurs start, develop and harvest their ventures.

“A critical element of a start-up is to figure out what you want to achieve through the venture, and for most it’s to create a good exit,” said Dr McKaskill.

“The highest exit values are generated through the creation of strategic value, that is, when a very large corporation is able to exploit significant new revenue potential through the acquisition of a smaller business. Understanding what creates strategic value and how to develop, package and execute a strategic value exit is essential education for a start-up entrepreneur,” he said.

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Media: Colin Kinner, ilab CEO, +61 7 3327 9802 / +61 (0) 411 122 976, ckinner@ilab.com.au

About ilab: ilab is a business incubator that works with the founders of technology start-ups to help them create successful global ventures. ilab immerses the founders of new businesses in an entrepreneurial community, and provides them with support from a team of experienced entrepreneurs, facilitators and business coaches. Companies that have benefited directly from ilab membership include ASX-listed RedFlow Ltd, Charm Health and Codesion. ilab is owned by The University of Queensland and supported by the Queensland Government.       

www.ilab.com.au