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Start-ups feel shunned by the government, report finds

Adrian Flores
Adrian Flores
19 August 2020 1 minute readShare
Start-ups feel shunned by the government

A new report has found that a significant portion of Australian start-up founders feel ignored by governments and policymakers amid growing difficulty and uncertainty around capital raising.

The research from business and creativity festival Pause Fest found that more than half (53 per cent) of Australian start-ups felt the government was not listening to their concerns or perspectives, and almost a third (28 per cent) cited Australia’s communications and privacy laws making it harder to start a business.

It also found 43 per cent said Australia does not have a regulatory advantage to Asia, the US or Europe, while 44 per cent identified data privacy and management as requiring urgent attention, closely followed by artificial intelligence (38 per cent) and intermediary liability (38 per cent).

The inaugural survey is based on almost 400 start-up founders across Australia.

Another area raising potential alarm bells for start-ups was capital raising, with a quarter of start-ups in Australia saying they are about to engage in fundraising.

However, they also stated feeling uncertain around how fruitful capital raising efforts would be, with 37 per cent saying capital raising was harder today than in 2019.

Further, half of respondents said they were bootstrapped and not intending to raise capital in the year ahead, suggesting plans might be to stay afloat rather than pursue growth.

“Clearly, we need to examine the barriers start-ups face and listen to their concerns if we want to maximise the benefits the industry has to the nation,” said Pause Fest founder and CEO George Hedon.

“There have been some significant raises in Australia in the past year, but we continue to see not much happening in the early-stage investment space.

“This is impacting the vibrancy of our ecosystem and the formation of new start-ups. It will, in fact, be even harder to start, build and maintain a small business in the very near future.”

Mental health and wellbeing was also cited as an issue among start-up founders, with 46 per cent saying they felt “lonely at the top”.

Mr Hedon said the conversation around mental health had made huge leaps and bounds in recent years, but we still have quite a way to go.

“Australian start-up founders are under enormous pressure. One in two told us they felt lonely at the top, and our data shows a third say their personal financial situation has worsened since founding their business,” he said.

“Two in three founders said they would value support from their board or investors in managing mental health, yet half (47 per cent) said they had not received support to date.

“However, it goes both ways. A third of founders say they would not feel comfortable discussing their mental health with their board or investors. It’s on all of us in the start-up community to encourage and facilitate two-way debates on this issue.”

Start-ups feel shunned by the government, report finds
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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