Australian govt grants for startups: Is it really so hard?

Commercialisation Australia (CA) is one of the Federal government's initiatives to help entrepreneurs build successful businesses and is better known for its Early Stage Commercialisation grant.

Like a number of government initiatives aimed at providing funding or tax breaks, CA has been criticised for not doing enough, or for grant application processes being too onerous on businesses to apply for.

At the SlatteryIT's Tech Connect 2013 event in Sydney on Thursday, Radiata founder, former NICTA CEO David Skellern, and former Radiata CEO Chris Beare further criticised the government grants process as being bureaucratic and difficult to apply for.

"The present funds that are available for companies are hard to get and are not very much. If you put the same effort into other areas of business, you'll probably do better, and I think that's the problem with the current Commercialisation Australia," Skellern said.

"The amount of time and effort it takes a small company to cope with government requests, including applying for government grants, is horrendous," Beare said.

"We [Radiata] could have had a team of 10 people just satisfying all the requests for things we had to do to satisfy government."

Radiata was fortunate enough to have a knowledgeable finance guru who was able to direct the startup on which government requests needed a detailed response, a single line dismissal, or that could be ignored completely, but Beare warned that not everyone would be as fortunate.

But speaking later in the day as part of a panel, Commercialisation Australia CEO Doron Ben-Meir said that if government grants were the only thing that CA was about, he wouldn't have taken up the position.

"Personally, if CA were just a grants program, I wouldn't be involved. It's as simple as that. I have no interest in grant programs for sale. The real interest they have in this is the human capital that they're building around the program. In aggregate, the assistance that is being provided by experienced business people being at the interface with the applicants and participants is really delivering dividends."

Ben-Muir said that CA's long term vision was instead to create a "machine" or ecosystem where help from experienced entrepreneurs flows back into helping others, and that in 5 years time, he expected to have a database of 1,000 to 2,000 people to do so.

"In that way, we start to self-fulfil, generate some quality deal flow at scale, and that's when the investors start coming in greater numbers because there's a better case to raise money, to invest in those sort of companies because it's more obvious what the deal flow is and the quality of [it]."

He also said that CA's role was to help entrepreneurs make connections with others that they simply would have a hard time doing so alone.

"We'll put you straight to the case manager responsible for that business. You can talk to them and organise a session with the company," he said.

"All we're trying to do is like eHarmony for entrepreneurs. We will bring you together; we won't get involved."

Ben-Meir also highlighted that in cases where entrepreneurs had approached CA seeking grants, but had been turned away, this wasn't the end of the story. CA, in many cases, advises these startups as to why they are unsuitable for funding and what their next steps should be to ensure they are in a better position next time.

"We don't say, 'You haven't got enough ducks in a row. Haha, go away!' — we help people. The whole point of the case manager role is to give people useful, constructive advice — take it or leave it — but useful, constructive advice, and people make of it what they will."

Ben-Meir additionally addressed the task of applying for CA's grants, stating that they should not be as time consuming as others have made them out to be. He said that the application process really covers the basics of business, such as the startup's market opportunity, value proposition, execution plan, and management capability.

"There is nothing we ask for that you wouldn't want to know for yourself anyway, and certainly, if you're looking at getting anyone else involved in your business from an investment point of view, they'll want to know that and a whole lot more."