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Putting the Aussie “VC Gold Rush” in perspective

There is excitement to be felt among Aussie entrepreneurs about a proclaimed “Gold Rush in venture capital investment for Aussie start-ups”. Indeed, there have been some exciting announcements lately, but let’s put it all in perspective. The article in The Age linked to above mentions a number of investments in recent months that amount to approximately $22m in Q3.  Dow Jones estimated US VC investment amounted to $8.4bn in Q3, where $1.3bn was in the same tech space as the companies mentioned by The Age.

If you do a straight per capita comparison, that should have meant that Aussie investments should have been >$100m in the same period, but the level is instead is 1/4th of that (or 1/27th of the total 8.4bn). Considering that $15m of the $22m came from a US VC, not a local one, I would be somewhat hesitant using the superlatives here.

Also, what most of the tech start-ups in this country have to realize, their competition is not in Sydney or Melbourne, your competition will come from the Silicon Valley. Guaranteed. Any start-up in Sydney with a global value proposition needs to be looking across the pond the moment you start creating the first page of your business plan. You will not find gold here, but you may find some seed capital to get you started.

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