In his March 18th 2009 press release, Australian Federal Minister for Innovation, Industry, Science and Research announced a (and I quote) “Boost for Start-up Companies and Jobs – Securing the Future Beyond the Financial Storm”.

The Innovation Investment Follow-on Fund (IIFF) was to be all about ensuring a future for innovative companies beyond the global financial crisis for companies that have watched venture capital investment dry up with the Government’s withdrawal of the Commercial Ready R&D grants in May 2008. In March, a figure of $83 million was announced to fund investment fund managers that wanted to make follow-on investments in their qualifying portfolio companies.

Two months later, the date on which even the details are to be released to the licensed investment fund managers is still a closely-guarded secret.

There’s some terrific quotes in the release:

Making money available for reinvestment will boost confidence and help shake loose additional private sector capital.

and this one:

It is essential that we help these fledgling companies ride out the crisis.

But it is really bittersweet to re-read this release now. In the last two months, I suspect that dozens of companies have either had to raise emergency “down rounds” (usually to the delight of rapacious VCs and angel investors) or worse, had to lay off staff to survive. This has a major impact on the psyche of employees – there could well be a generation of educated, intelligent innovators who may never want to work for an emerging company again as a result of being laid off in such a manner.

I want to be clear and state that I support Government programs that stimulate and assist the commercialisation sector. We have to help ourselves. As an entrepreneur, I get disappointed when I hear about companies who simply ride the grant “gravy train”, and don’t get me started on the percentage of grant money that ends up in the hands of “grant consultants” as a result.

But I run  a focused, emerging company that is developing and commercialising technologies here in Australia, employing Australians, and – importantly – gaining customers and revenue. We’ve been surviving despite the lack of breadth in venture capital in this country, even before the global dowturn. We aren’t sitting on the gravy train – we’re running on revenues. And yes, various happenings in the telecoms industry in 2009 have really hurt us. Yet just as Government programs emerge, or we’ve grown to the size where they are relevant (such as our ill-fated Commercial Ready effort last year) they are withdrawn. Or worse – delayed. Indefinitely. 

The closing sentence of the press release just cracks me up:

Funds will flow to companies as soon as possible.

There’s an old adage that says “those who can, do”. We will just have to keep “doing”, because Minister Carr’s department seems unable to follow through with its announced commitments. And because, in the real world, “soon” just doesn’t make the grade.