Venture Capital

Investments in Fintech Businesses

Amendments have been made to income tax law and the Venture Capital Act 2002 to ensure that venture capital investment tax concessions are available for investments in fintech businesses. These amendments allow VCLPs and ESVCLPs to invest in entities which are:

  • developing technology for use in relation to finance, insurance or making investments; or
  • undertaking an activity that is ancillary or incidental to developing technology in relation to finance, insurance or making investments; or
  • covered by a finding from Innovation and Science Australia, in force at the time of investment, that their specified activity is a substantially novel application of technology.

These amendments commence on 1 January 2019 and apply in relation to investments made on or after 1 July 2018. Information on this website is currently being updated to incorporate these amendments.

Overview

The Australian Government has a range of venture capital programs designed to attract domestic and foreign investment. This investment is vital to help innovative Australian businesses commercialise technologies and turn research into new products.

Commercialising innovation can be high risk. As well as access to capital, these programs give early stage companies access to skilled and experienced people, improving the chances of success.

This content is primarily for fund managers but also useful for Australian businesses seeking investment and investors looking to take advantage of the Australian venture capital market.

The suite of venture capital programs includes:

Early Stage Venture Capital Limited Partnerships

Fund managers seeking to raise a venture capital fund of between $10 million and $200 million to invest in Australian businesses may be able to register an ESVCLP. This structure offers tax benefits for fund managers and domestic and foreign investors.

An ESVCLP must make early stage venture capital investments in companies or unit trusts and hold those investments for at least 12 months.

To find out more and to apply for registration, go to:

Early Stage Venture Capital Limited Partnerships

Venture Capital Limited Partnerships

Fund managers seeking to raise a venture capital fund of at least $10 million to invest in Australian businesses at various stages of development and with assets of up to $250 million may be able to register as a VCLP. This structure offers tax benefits for fund managers and investors.

A VCLP can invest in unlisted Australian businesses by acquiring shares, options or units. It may also invest in companies or unit trusts that will delist within 12 months. The VCLP must hold these investments for at least 12 months.

To find out more and to apply for registration, go to:

Venture Capital Limited Partnerships

Australian Venture Capital Fund of Funds

Fund managers seeking to invest in a portfolio of venture capital funds, including ESVCLPs and VCLPs, may be able to register as an AFOF.

This structure provides diversification and flexibility for the fund and its investors. It may also help manage investment risk.

To find out more, go to:

Australian Venture Capital Fund of Funds

Pooled Development Funds

PDFs raise capital and make equity investments in small and medium-sized Australian enterprises to increase their supply of capital.

A fund manager cannot register as a new PDF. Existing funds invest in small and medium-sized Australian companies.

To find out more, go to:

Pooled Development Funds

Biomedical Translation Fund

The BTF is a joint Australian Government and private sector fund worth $500 million. Companies with promising biomedical innovations with commercial potential can seek funding through three private sector venture capital fund managers to develop and commercialise these discoveries in Australia.

This support can be vital in translating biomedical discoveries into potentially high-growth businesses that can deliver long-term health benefits and achieve national economic outcomes.

To find out more, go to:

Biomedical Translation Fund

Seeking venture capital

The Australian Government and the private sector both provide venture capital. Many people are looking for funding and fund managers will want to know why your proposal deserves support. Before contacting a fund manager, you should consider who they are, discover what they specialise in and understand what investments they have made.

For more information on sourcing venture capital and tips on how to pitch, go to:

Seeking venture capital

Looking to invest in Australia's venture capital market

The ESVCLP, VCLP and AFOF programs are designed to attract domestic and foreign investment in Australian start-ups and early stage businesses. This investment plays a crucial role in cultivating innovation and entrepreneurship.

If you would like to learn about the benefits of investing in the Australian venture capital market, and the regulatory requirements and channels for doing so, go to:

Looking to invest in Australia's venture capital market

Customer stories

Many successful Australian businesses began as start-ups or early stage firms with limited funds. Their access to venture capital and people with commercialisation skills helped them turn their ideas, research or innovation into commercial successes. Venture capital funds and partnerships have also been able to grow and prosper as a result of government venture capital initiatives.

To see how Australian businesses and venture capital funds and partnerships have benefited, read our:

Customer stories

Venture capital statistics

Find out about our venture capital statistics.

The Australian Private Equity and Venture Capital Association Limited (AVCAL) also publishes statistics and research on the Australian venture capital industry.

Registered venture capital funds

The following are lists of venture capital funds supported by Australian Government programs:

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