Capital and fundraising: how Australia's startup funding pathways changed

Before funding pathways became repeatable

SEEK's own history dates its founding in Melbourne to 1997. Paul Bassat remembers that environment as one with few accelerators, limited venture funds and only scattered early-stage investors. A Commonwealth record from the same period shows that government was also trying to build a pathway: the Innovation Investment Fund was introduced in 1997 to help technology companies access venture capital and to foster a self-sustaining early-stage venture-capital industry. The record establishes the program's intent, not that the market was already mature or that the program achieved its ambition.

“There were very few people specifically. There wasn't accelerators, there wasn't really anything the way of venture capital funds. And there were some people that did a little bit of early-stage investing, either as angel investors or funds that had a sort of a slight technology lens to them.”

Angel investing depended on confidence and access

Rachael Neumann describes angel investing as more than a question of willingness to write a cheque. In her account, prospective investors wanted competence, confidence and access to enough deal flow to make informed choices. Flying Fox emerged from that practical problem: people were interested in early-stage investing but did not necessarily know how to evaluate opportunities or reach them.

“Then Flying Fox came about because I was a very active angel myself, and I had lots of people coming up to me saying, "Hey, how do you do what you do? How do you learn how to do it? How do you have either the competence or the confidence?" Then they said, "Maybe if I know how to do it, how do you get access to all those deals?"”

Accelerators created structure — but not neutral advice

Startmate dates its founding to 2010, when successful founders pooled money into a micro-fund and supported the next generation of early-stage companies. That structure brought capital, mentorship and a visible entry point together. Kylie Frazer nevertheless draws a boundary around the investor's role: founders may need help understanding a transaction, but the investor negotiating it is not an independent teacher. Her argument is for funding literacy that does not depend solely on the party seeking the investment deal.

“We are on opposite ends of the table when we come to the pointy end of an investment transaction. You know, you don't ask me to teach you because I'm obliged to act in the best interests of my investors. It's my job to get a good deal.”

Policy settings and local funds accumulated over time

The institutional pathway developed through multiple legal and organisational milestones. Federal legislation enacted in 2002 gave Australian venture-capital limited partnerships flow-through tax treatment and broadened concessions for eligible foreign investors. Amendments in 2007 created the Early Stage Venture Capital Limited Partnership regime and related exemptions for eligible investments. These are policy milestones, not proof that legislation alone produced later fund growth.

Fund histories supply further chronology. Blackbird dates its inception to 2012 and describes its first fund as a difficult, contrarian raise. AirTree lists 2014 as its founding year. By the time Melissa Widner was interviewed, her concern was not the complete absence of an asset class but the extent of institutional participation in it. She saw further room for Australian superannuation funds to invest in venture capital, while stopping short of establishing a preferred allocation or return expectation.

“There's still a lot of room to get more superannuation funds investing in this asset class.”

Global ambition did not require a single headquarters choice

LaunchVic was incorporated on 11 March 2016 as the Victorian Government's startup agency, with a remit that included expanding startup-support and accelerator capacity. Its chief executive, Kate Cornick, argues that internationally ambitious companies can build a strong overseas presence without automatically moving their headquarters out of Australia. That is her ecosystem view, not a measured claim about how often companies stayed or left.

“At Launch Vic, we're not particularly interested in startups that don't have that, that international trajectory. We recognise that there will be strong presence internationally for these companies, but the fact that headquarters aren't jumping ship and moving to the US or the UK is really fantastic.”

More pathways did not make the system equally legible

The Australian Government opened the Boosting Female Founders initiative in 2020 with the stated aim of helping women founders access early-stage capital and grow their startups. The announcement records policy intent, not the size of the gap or whether the program reduced it. Lucinda Hartley identifies a related but broader barrier: capable problem experts may not recognise themselves in the prevailing founder archetype or understand the conventions that make the ecosystem feel navigable to insiders.

“I think that there are a lot of experts, problem experts out there who wouldn't see themselves as startup founders. And I've been one of those, but I think there are thousands of others who they would actually be brilliant founders, but they wouldn't see the startup ecosystem as accessible to them because they perhaps don't understand all of the different dynamics of how it works.”

Capital also creates a long relationship

Brendan Hill frames early-stage investment as a long relationship in which conviction in the founders matters alongside the business idea. His reference to a ten-year relationship is a way of expressing the durability of that commitment, not a verified average holding period. It shifts the fundraising question from how to obtain any cheque to whether investor and founder want to remain aligned through years of uncertainty.

“So you really need to get to know the founders really well. Like, do you want to enter into a relationship with these founders for the next 10 years? Do you want to give them your money?”

Specialist capital did not remove specialist risk

CSIRO founded Main Sequence in 2017 to address the gap between research and commercialisation and to manage specialist deep-technology investment funds. The existence of that pathway does not erase the difficulty described by Dharmica Mistry. In her company's experience, long development timelines made it difficult to bring a venture investor into the raise. Her account is a sector-specific counterpoint to any claim that greater capital availability was felt evenly across business models.

“And, you know, getting a VC to jump ship and come on board with us was, it was a bit of a challenge because it was a long-term project. And I think a lot of deep tech and med tech and biotech projects find raising capital can be like that.”