01/07/2003 - 22:00

Venture funds moving east

01/07/2003 - 22:00

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WESTERN Australia’s venture capital industry is experiencing a burst of change, with two local venture capital providers restructuring their business and a ‘business angels’ group holding its first Perth meeting.

Venture funds moving east

WESTERN Australia’s venture capital industry is experiencing a burst of change, with two local venture capital providers restructuring their business and a ‘business angels’ group holding its first Perth meeting.

The Harold Clough-backed Tech-Start Fund Managers has been sold to Sydney-based firm VentureAxess.

VentureAxess also will assume control of local venture capital fund Add Venture Capital, which has been managed by TechStart since its inception in 2001.

These changes coincide with a major initiative by another local venture capital manager Evandale House Group.

Floreat-based Evandale will be the WA representative of the new Copenicus Capital venture capital fund.

Melbourne-based Copernicus has recently launched a prospectus to raise $20 million for investment in ‘early stage’ companies and expanding businesses.

Both TechStart and Evandale believe these changes will give WA entrepreneurs access to a larger pool of venture capital funds.

The price is that final management control of the funds will reside on the east coast.

TechStart launched Add Venture Capital two years ago in order to gain access to a larger pool of funds for seed or ‘early stage’ technology investments.

However, Add Venture fell well short of its $4 million fund raising target, raising only $1 million.

Add Venture has called an extraordinary general meeting next week to approve a change of name to VentureAxess Capital and confirm the appointment of VentureAxess chairman Geoff Mullins as a director.

The Perth-based directors of TechStart, Greg Johnston and Conrad Crisafulli, plan to continue with the group on a consultancy basis.

Mr Johnston said the fund was expected to seek additional funds from both private investors and institutions once the restructuring was completed.

The changes at TechStart Fund Managers will not affect its parent company TechStart Australia, which will continue to hold its current portfolio of venture capital investments.

These include stakes in Alzhyme, which is researching Alzheimer's disease, software developer XempleX and toy maker Oi! Toys.

Like TechStart, Evandale has also been working with ‘start up’ technology businesses in WA, providing financial backing and management expertise.

“It’s a niche that is in desperate need of support,” Evandale chief executive Peter Snow said.

He believes the link with Copernicus will be good news for local companies.

“Once the fund raising is completed, we will have a fund that can handle the deal flow,” Mr Snow said.

Copernicus will be managed by Intrinsic Investment Management, whose managing director is Glenn Woolley, a former chief investment officer of ANZ Funds Management and a director of IOOF.

The organisers of this week’s inaugural Perth meeting of Founders Forum hope its success on the Gold Coast and Brisbane will be repeated here.

Founders Forum is a not-for-profit network of ‘angel’ investors looking to support early stage businesses with financial backing and mentoring support.

Since its inception in early 2000, entrepreneurs involved with Founders Forum have raised $13.5 million in capital for their businesses.

At its monthly meetings, three entrepreneurs are invited to pitch for support from the investors.

The speakers at this week’s breakfast function, held on July 3, included Rick McElhinney, the chairman of Founders Forum in Queensland, Evandale director Sciona Browne, who has studied angel networks overseas, and QPSX general manager Matt Callahan, who is interim chairman of Founders Forum in WA.

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