Businesses transitioning from start-ups to established companies need more support from the federal government, according to the Australian Private Equity and Venture Capital Association (AVCAL).
Current funding arrangements and foreign investment rules are limiting the growth capability of ‘scale-up’ businesses, ie, those businesses that have "graduated from the start-up phase and now need further capital and expertise to compete on the world stage", said AVCAL.
Commenting on the release of a number of policy recommendations, AVCAL chief executive Yasser El-Ansary said current regulation didn't adequately "balance" the need for foreign investment with protection on Australian interests.
"The reality is that foreign investment is crucial to the funding of small and medium-size businesses," he said.
The recommendations made by AVCAL to support these scale-up businesses include relaxing foreign investment rules and creating a limited partnership vehicle to encourage offshore investors, shifting the focus of superannuation toward long-term growth, and introducing tax credits and government funding for innovative scale-ups.
"We could do a much better job of re-casting our superannuation policy and regulatory framework to drive more meaningful economic outcomes for Australia – the opportunity to unleash the power of superannuation is right in front of us. Super funds are telling us they want to invest more in PE and VC as they see value for members," Mr El-Ansary said.
While the National Innovation and Science Agenda will greatly assist start-ups nationwide, Mr El-Ansary says the "next phase" of this support needs to be targeted towards "boosting the availability of later-stage capital" in order to develop a "high-tech Australian economy".
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