Entrepreneurs welcome $60 million startup fund, but hungry for more detail

The startup community has welcomed the Victorian government’s first budget but would like more details on the proposed innovation funds Labor says will drive economic growth.

The 2015 Victorian budget includes a $60 million “startup initiative” in order to match local entrepreneurs with business mentors to help get their ideas off the ground.

This is the first step towards the fulfilment of an election commitment made by Labor while in opposition last year to establish an independent authority to support startups.

The government is also looking to transition the local economies in Geelong and Melbourne’s north away from manufacturing through multi-million dollar innovation funds.

Victoria’s Minister for Industry, Lily D’Ambrosio, said in a statement the future industries funds will help support people transition out of car manufacturing.

“We will support the transition of the Victorian economy through targeted sector strategies, helping businesses find ways to use their skills to create new products and reach new markets,” she said.

“This will help secure today’s jobs and create the jobs of tomorrow.”

Scott Handsaker, co-founder of Startup Victoria, told StartupSmart the mentorship initiative will be a significant boost for the local startup ecosystem.

“Startup Victoria remains very supportive of the $60 million startup initiative proposed by the state government, although we are keen to see the finer details once they have been worked out,” he says.

“We have met with Minister (for Small Business, Innovation and Trade) Adem Somyurek as part of his extensive consultation efforts, and we are optimistic that when the package is revealed that there will be something in there for high growth startups in Victoria.”

Handsaker says the government should be focusing on helping entrepreneurs start a new business or grow an early one for the sake of the economy.

“The Kauffman Foundation have shown that in the US, almost all new job growth comes from businesses that are less than five years old,” he says.

“On average, businesses that were five years or older were net job destroyers. It is likely that the same dynamic applies to the Australian economy, which makes the support of new high growth startups a critical part of Victoria’s economic future.”

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