Western Australia’s venture capital industry has formed a new networking group to tackle the perennial issue of funding for ‘early stage’ technology companies.
Western Australia’s venture capital industry has formed a new networking group to tackle the perennial issue of funding for ‘early stage’ technology companies.
Venture Capital Network will hold its first meeting later this month when three established technology companies, each seeking about $500,000, will make presentations to investors.
The meeting has been convened by corporate lawyer Rob Garton Smith, who says Perth suffers from a “very immature” seed capital market.
“Capital is enormously difficult to raise if you are not a listed company,” Mr Garton Smith told WA Business News.
The formation of VCN coincides with moves by Strattica Group’s Michael Kyriacou to establish a similar networking group, known as Commercial Technology Network.
Mr Kyriacou, who is working on behalf of Engineers Australia, said his aim was to help turn good innovations into good investments.
He said it was possible the two groups could end up working together as their goals were similar.
The people behind the two new groups will be hoping they last longer than Founders Forum, which was set up last year to help ‘early stage’ ventures pitch for backing from ‘angel’ investors.
QPSX general manager Matt Callahan, who was one of the organisers of Founders Forum, said the group held just two meetings.
“The quantity of ventures that we could put into that network were limited,” he said.
He believes the State Government needs to deliver more tangible support to help early stage technology companies become investor ready.
“We need a program to deliver investor-ready ventures,” Mr Callahan said.
Mr Callahan contrasted the plethora of industry strategies in WA with the more decisive action of the Queensland Government, which recently released a five-year review of its achievements in the biotechnology sector.
The WA Government this week released a draft biotechnology industry initiatives program for public comment.
A Government spokesman also confirmed that application for grants under its Innovation Capability Development Scheme, announced last January, would commence on November 30.
Its $750,000 Innovation Centre at Technology Park is also due to open on that date.
Mr Garton Smith expects VCN will appeal to companies seeking to expand their number of shareholders in preparation for a stock market float. It can also be used by companies seeking money from venture capital funds.
His financial services company, Primary Securities, will administer VCN, which aims to hold meetings every two months, with three companies presenting at each meeting.
Companies presenting at the initial meeting on November 15 will be: QV Pumping Technologies, which has developed a new type of pump; business intelligence software developer XempleX; and SpecTerra Services, which provides airborne remote sensing technology.
Mr Garton Smith expects each company to attract financial backing from a range of investors rather than a single ‘business angel’.
“There is a myth that there are angels out there willing to place large amounts into small companies. That is not so,” he said.
