The Federal Government has announced a new $23 million Incubator Support Initiative as part of its National Innovation and Science Agenda (NISA). Industry, Innovation and Science Minister Greg Hunt launched the Commonwealth-backed venture fund to support high growth startups and innovators.
What is the Innovation Fund?
As part of the announcement, an Innovation Fund will be set up and available to startup founders and entrepreneurs. It is expected to be provide over $500 million in funding and will be launched in early 2017. The fund will be managed by Innovation and Science Australia, the same organisation that manages the current Biomedical Translation Fund.
What is the Incubator Support Initiative?
The Federal Government Incubator Support Initiative will support companies by allowing access to grants between $10,000 and $500,000 over 12 to 24 months for the creation of new startup incubators in regions or business sectors with strong link to international trade. The initiative will also provide an opportunity for existing high-performance incubators to expand their services.
Unlike other government grants available for startups, the Incubator Support Initiative also includes a component where startup incubators will be able to apply for a dollar-for-dollar funding up to $25,000 over 12 months to bring on board experts-in-residence from Australia and overseas (thought leaders and experienced business leaders to assist the growth of the business).
In order to be eligible for the grant, incubators must have 30 per cent of their component of the cash up front and 20 per cent raised through state government grants or capital raising activities. Thus, 50 per cent of the total amount of the grants will be responsible by incubators in order to receive matching grants from the government.
The government has recognised the strong growth in the startup sector. Originally committing $8 million to the incubator initiative as part of NISA, the government has committed a further $15 million boost over four years.
Types of Support Initiatives
There are two support initiatives available to access the funding from the Incubator Support Initiative. In order to receive the funding, incubator applicants must also match the funding dollar for dollar. The New and Existing Incubators initiative aims to develop new incubators in regions with high potential for success in international trade and boost the performance of successful incubators. The Expert-in-Residence initiative aims to provide access to top quality research, managerial and technical talent through the advice of expert advisers with a background in successful commercial startups. The grant will be 50 per cent of the total project value.
The Incubator Support Initiative is now accepting application on the business.gov.au website. Incubators must have a valid Australian Business Number (ABN) to apply. Individuals, partnerships and trusts are ineligible to apply. New or existing incubators must have a project at least $20,000 in total project value. For expert-in-residence grants, the threshold is $2,000 in total project value.
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