AS belts tighten across the board and budgets are intensely scrutinised, early stage company executives are finding it harder to attain the necessary capital to progress their projects.
AS belts tighten across the board and budgets are intensely scrutinised, early stage company executives are finding it harder to attain the necessary capital to progress their projects.
A caucus of technology based executives told the WA Business News innovation forum the challenges faced by early stage technology companies had increased as the economy contracted during the past year.
Mobilarm chief executive Lindsay Lyon said a major difficulty was that the nature of the technology sector sometimes scared investors away.
"Very early stage, high-technology business comes with risk," Mr Lyon told the forum.
"What you need are some core investors that'll keep believing the story."
Live Technologies director Roger Plumb said attaining funding had been one of the major barriers to his company reaching its objectives.
"We're just about to go through another round and it remains to be seen how easy that's going to be," he said.
"I think it's becoming apparent that we may well get our funding from industrial partners and it's too difficult to try and get angel investors."
Sensear chief executive Justin Miller said his firm had just completed a $5 million capital raising in difficult market conditions via Sydney firm Exto Partners, which was currently managing a fund raising for Nobel prize winner Barry Marshall's biotechnology company, Ondek.
"It has provided some stability to the business, and I think that the biggest thing that I've learned is that you just don't know what's around the corner," Mr Miller said.
"What's happened in the past 12 months has been the toughest 12 months in my working life, but that said, I couldn't have gotten through it without the team that we had."
Ipernica chief executive Graham Griffiths said innovative techniques had to be employed to pique investor interest, but many of the methods used in other parts of Australia were costly and time consuming.
"It is hard yards. As a company we picked up on the Queensland angel investor model and ran a series of breakfasts," Mr Griffiths said.
"We were herding cats trying to get these guys regularly into the room to listen to pitches and commit to start-up companies to invest in.
"It's all good stuff, but at the end of the day the angel investors typically are very important people and to be in a room with a whole bunch of other people, although it is very efficient, it takes a lot of work to nurture it."
CustomVis chief executive Paul van Saarloos said emerging technology businesses should cast a wide net looking for investors.
"There are people prepared to invest, early stage, all around the world," Dr van Saarloos said.
"Some of them are a lot easier to sell to because they know what you're doing, far better than people locally, who have probably only invested in digging holes in the ground."
Curtin University director of IP commercialisation Rohan McDougall said it was important to note that having to search internationally for funding was not a uniquely Western Australian problem.
"Exposure is important internationally, but the limitation on investors in the early stage space is not a WA-centric thing, it's across Australia," Mr McDougall told the forum.
"There are only really a very small handful of serious investors in the early stage space in Australia.
"Most companies in Australia who are in this space have to look pretty widely to try and get capital, it's not just WA."
To bridge the gap between investor and inventor, Mr McDougall said Curtin University had established a fund to invest in local start-up technology companies.
"The ability to have that early stage money, where you can resource some of these companies at a very early stage to get the right skills in, I think is a very important step," he said.
"But we also are looking at trying to work with the local community to build a focal point for investors who are interested in this innovation space to come together and there's a lot of interest out there.
"There are people who have made their money in the mining boom and want to diversify their investments.
"People around town have got cash and are really interested in investing but they lack this focal point to come together.
"They don't have the time to spend on each individual project either, so I think there's an opportunity there to bring together some of these people."