Revamping criteria under the 188B Investment Visa Australia could fill critically needed gaps in venture capital funding for metropolitan and regional areas, helping to avert impending disaster for entrepreneurs and their startups, whose early stage venture capital funding sources are drying up.
Executive Chairman of Atlas Advisors Australia, Guy Hedley said encouraging venture capital investment in metropolitan cities and especially regional areas was critical to boosting the resilience of employment and tax-generating entrepreneurs and their innovative businesses.
Mr Hedley said two new categories should be created under the 188B Investment Visa, for metropolitan and regional venture capital investment, to stimulate the flow of funds towards business ecosystems in urgent need of stimulus.
“This would ensure maximum economic benefit for metropolitan and regional economies instead of directing investment into liquid or well-supported markets such as property, and mature operating or listed companies,” Mr Hedley said.
“It would also encourage some businesses to relocate from metropolitan centres to regional centres to obtain funding support.”
The investment threshold for the 188B Investment Visa should be increased from $1.5 million to $2.5 million for metropolitan regions including major cities of Sydney, Melbourne and Brisbane using the same complying investment framework as the Significant Investor Visa stream, rather than the current investment allocation to State Government Bonds.
A lower value should be required for investment into regional areas but with a focus on regional venture capital to create the best outcomes on job creation.
Meanwhile the complying investment framework for the Investor Visa and Significant Investor Visa programs should be adjusted to increase the allocation of investment towards venture capital funds from 10 per cent to 20 per cent.
“This could provide a vital boost for venture capital and seed stage startups, which are being hit hard by the economic impact of the COVID-19 pandemic,” Mr Hedley said.
“Supporting and strengthening our local economies will help us create new jobs, accelerate innovation and encourage the development of new technology, businesses and industries.
“Atlas Advisors Australia already has significant capital invested in regional businesses through our partnerships with venture capital funds.”