9th December 2020 | Business
A Venture Growth Fund will provide funding to co-invest into a venture debt facility with a private investor to inject more capital into the scale-up sector and support companies to grow that do not meet the requirements of traditional lenders. Low-interest loans will also be available for eligible Victorian enterprises to assist with cash flow and support vital research and development work programs. The budget will also fund the $40 million LaunchVic Accelerate Initiative aimed at boosting support for Victoria’s start-up ecosystem.
If you are a startup seeking funding you will need to engage with VC funds as the VSCF will not invest directly into your startup without VC backing.
• Most startups require investments to grow but without significant traction or assets, traditional financing models such as small business lending or private equity investments are inaccessible.
• Early-stage startup capital is the finance that enables startups to grow. It is generally provided by:
– Angel Investors – people who invest individually or through syndicates providing capital, advice and mentorship.
– Early-Stage Venture Capital (VC) Funds – independently-managed pools of capital run by a fund manager that raises capital from Limited Partner (LP) investors to invest in early-stage startups.
• Angel investors and venture capital funds seek exits to realise investment returns, including trade sales, Initial Public Offerings (IPO) or through Mergers and Acquisitions (M&A).
A Fund of Funds is a fund that invests in other funds. Benefits include:
• Injecting investment capital into the local startup ecosystem.
• Supporting startups to create jobs and contribute to economic recovery.
• Growing local VC capabilities by attracting new funds to build talent and invest locally.
• Expanding the early-stage investor community by exposing new investors to the early-stage startup asset class, and building their confidence to invest directly in startups or VC funds in the future.
• Enabling investors to access a more diversified portfolio (limiting risk). Small LPs can access quality VCs that they might otherwise be inaccessible, and large LPs avoid the need to due diligence multiple VC firms.
• Saving investors time and expense by providing access to FOF professional back-office services (including tax and compliance reporting).
Contact us to register your interest info@Ax3.com.au