A dearth of venture capital in Australia should not hold back startups, according to Commercialisation Australia CEO Doron Ben-Meir.
“It’s not about needing venture capital so we can get innovation,” the government official told the CeBIT Startup conference on Wednesday. “You need innovation if you expect to see venture capital.
“Venture capital is not the driver. It’s the follower.”
Not everyone at the conference agreed. Jonathan Barouch, founder of Sydney startup Local Measure, said he doesn’t think “the stats support some of [Ben-Meir’s] comments.”
“If you look at the VC industry over the last 10 years in Australia, the total funding levels have actually declined year-on-year for three years to a point now where it’s $7.50 per capita in Australia.” By comparison, VC funding is $75 per capita in the US and $170 per capita in Israel, he said.
“Either we don’t have enough capital or they are not actually following quick enough.”
Ben-Meir agreed there are not many traditional VC funds in Australia, but said “that is a complete red herring” and “a lot” of other money is available to startups.
“If the only thing you need to be successful with your business is money, you’ll have money ... I’ve never met a business that only has money and doesn’t have it.”
“The reason you don’t have [money] is because it’s not the only thing you need,” he said.
Brad Lindenberg, founder of the startup BuyReply, concurred with Ben-Meir. “The entrepreneur comes first,” and if the startup has the right idea and is targeting the right market, “the money will follow.”
Those struggling to find funding should “take a real good look at what they’re trying to have funded and make sure that’s something that can demonstrate long-term success,” said Lindenberg.
Ben-Meir said Australia’s startup scene has historically had problems but is “changing for the better.”
“We’ve never had critical mass deal flow in this country where everyone can see and understand and qualify,” he said. “We’ve always had lots of very good entrepreneurs, very good inventors doing things all around the country and pitching to ears left, right and center, but it’s been very ad hoc, it’s been very anecodotal and it’s been very isolated.”
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