Venture capitalists disagreed whether high-tech Australian startups need to move to Silicon Valley to find success. The issue was debated at the Microsoft Asia-Pacific Entrepreneur Summit in Sydney.
A lack of venture capital funding in Australia forces startups to look to Silicon Valley, said Southern Cross Ventures managing director, Bill Bartee. Large companies that already have revenue in Australia don’t have to move to Silicon Valley, but the same is not true for smaller companies, he said. “If you are a raw startup, yes, you’ve got to move. End of story.”
Some smaller companies “start something here, prove it here, and then go,” Bartee said. Others move half their team to Silicon Valley and keep the other half in Australia, he said.
Hall Capital director, Vivian Stewart, disagreed that startups can’t stay in Australia. It’s “incorrect” that “there’s no funding here [and] you have to move to the US to get funding,” he said.
“There is a perfectly good ecosystem now,” with funding available from incubators, seed accelerators, government grants and angel funds, Stewart said. Government funding is easier to come by in Australia because the market is less competitive, he added. Companies should “just make the effort” and “you’ll get support in a whole number of ways.”
“You can do it from Australia,” said One Venture executive director, Michelle Deaker. The venture capital firm “often set[s] up a US operation, but we don’t necessarily jettison people straight off to the States.” Some businesses “might have an advantage” moving to Silicon Valley, “but I don’t think you need to necessarily move immediately.”
Don’t forget about Asia, Deaker added. “I don’t think we should forget about the fact that the Asian market is very interested in Australia [and] people are happy to invest in Australia.”
Bartee said he does see a growing spirit of entrepreneurship in Australia. In the past five years, more Australian students are graduating with the desire to start a business rather than join an existing one, he said. “That had been lacking for a while.”
Click here for ten tips to success offered by the venture capitalists and Australian startups.
Follow Adam Bender on Twitter: @WatchAdam
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.