Victorian Startup Capital Fund Overview
The Victorian Government has announced it will invest $60.5 million in a new Fund of Funds (FOF) for Victoria – the Victorian Startup Capital Fund (VSCF).
A Fund of Funds (FOF) is a fund that aggregates capital from a number of investors and invests capital in other funds as opposed to investing directly into companies. In the case of the VSCF, funds will be targeted at investing in early-stage venture capital funds located in Victoria.
The Fund will leverage up to $180 million of private sector investment for early-stage startups.
It will also inject investment capital into the Victorian startup ecosystem to support innovative early-stage startups to scale, create jobs and contribute to the State’s economic recovery.
Background
LaunchVic commissioned an Operational Plan in December 2019, that informed the Victorian Government’s decision to allocate $60.5m to establish the Victorian Startup Capital Fund.
With funding announced, plans will progress on a detailed Business and Implementation Plan in consultation with the VC community, and startup sector more broadly with the intention of raising capital and starting investments in the second half of 2021.
In supporting the development of a detailed Business and Implementation Plan LaunchVic will continue to advocate for the following principles:
- The VSCF will focus on supporting early-stage VC funds based in Victoria
- The VSCF must be market-competitive in order to catalyse early-stage investments
- The VSCF must be independent of Government control, while recognising the important role Government has as a cornerstone investor
- VC Funds in which the VSCF invests will be required to invest in startups based in Victoria
Objectives
The key performance metrics of the VSCF are yet to be determined but are expected to include:
- An increase in early stage funding for Victorian startups
- Increase in job creation in Victoria
- An increase in active angel and early-stage venture capital investors in Victoria
- An increase in skilled VC talent in Victoria
- Return on Investment
- Contributing to Victoria’s economic recovery
Funding
The Victorian Startup Capital Fund (VSCF) is the first VC Fund of Funds established by a State Government in Australia.
The Victorian Government will invest $60.5M as a Limited Partner (LP) into the Victorian Startup Capital Fund of Funds (VSCF). These funds will be matched 1:1 by new private sector LPs investors including superfunds, family offices and high net worth individuals.
The total fund size of the VSCF will be up to $120M.
