Venture Capitalist Named Head of Innovation Australia
18 November 2015 at 11:07 am
Philanthropist and one of Australia’s best known venture capitalists, Bill Ferris, has been appointed by the Federal Government as the new Chair of Innovation Australia, and he has started his new job by warning that Australia needs to shake off its “fear of failure”.
At the announcement of the top job by Minister for Innovation Christopher Pyne, Ferris said, “I think we all do work, in a cultural sense, on perhaps too big a play of the fear of failure, as opposed to the excitement of gain”.
“And it’s the latter that ultimately drives innovation right through the system.”
Pyne described Bill Ferris as the father of venture capital. He started the first Australian start-up venture capital business in 1970, and is currently executive chairman of CHAMP Equities.
“Everyone across this sector will see Bill Ferris’ appointment as a very strong indication from the Government that we want Innovation Australia to have a substantial role in the implementation of the national innovation and science agenda that will be announced in December,” Pyne said.
“We also want people to recognise that we are appointing a businessman, a philanthropist, somebody who will continue to bring the higher education sector and the business sector together, to bring researchers and business together, to match up funds with great, groundbreaking research, to commercialise research.
“Innovation Australia will have a revamped part of the national innovation and science agenda. We will be giving it a beefed up role that will include advice, evaluation, and reviewing of the agenda.”
Ferris told the audience that Australia needed to do a lot more activity in the start-ups part of the “food chain”.
“The more we get happening in that area with seed capital and very early stage venturing will be a good thing. You’ve got to accept failure as well as successes in that end of it. But without more of it happening, without more collaboration between entrepreneurs, academics, here and abroad, we won't get it,” he said.
“And part of that will be fuelled by raw risk capital. And a chunk of that, and a chunk more of it, needs to come from private investors, including high net worth investors to your question.
“I think that the Government will be looking at whether the income tax deduction scheme can be more aggressively offered to compensate for that early risk, and also whether a capital gains tax, if people hold investments long enough, should that be relooked at?
"But certainly, I would expect and hope that in this whole process we will see more activity, more money coming from private high net worth investors into start-ups, into the accelerator incubator ecosystem that is surrounding that and growing rapidly in a very sophisticated way now in Australia.”
He said another problem at the start-up end was how to attract skills onto the boards, and as mentors to these early ventures, when the risk is at its highest in the profile between the start-up and a major public company, for example.
“So the test – trading while insolvent – obviously is not something anybody should try to say isn't a very strict and necessary discipline to watch. But the Americans, for example, have laws which really at the start-up stage put the focus on the companies' responsibilities in that, not individuals and especially individual independent directors coming on to try and mentor and help,” Ferris said.
“The whole SME, the whole expanding small manufacturing public, the big end of town, greater engagement in innovation – it’s right through our whole system that we’ve got to charge if we can over the years – to turbo charge.”