The Commonwealth Government’s Pre-Seed program has as its target the commercialization of research outcomes that are generated by Australian Universities and Commonwealth-owned research agencies.

SciVentures believes that Australian researchers often do produce globally competitive outcomes. However, there is a perception that these outcomes may not be able to achieve their deserved commercial potential because of lack of funding and resources available in Australia to support very early stage opportunities. This is due to the combination of the associated risk and the effort required.

Too often, it seems that the result is early licensing of a research outcome, before its full potential has been explored.

The Commonwealth Government has aimed to address these risk and value creation issues through the structure of the Pre-Seed Fund program. The program has been designed to be attractive to the private sector, which is able to leverage the Commonwealth investment and thus participate advantageously in the excess returns that may be generated.

Key Features

The pre-seed fund has been designed to bridge the gap that exists between current forms of private capital investment in Australia and the point at which breakthrough technology outcomes are recognized within eligible institutions.

Overall, the purpose of the PSF program is to permit the development of significant Australian start-up businesses from University and Federal government owned research institutions.

Thus the Federal Government has licensed four pre-seed fund managers and has offered each of them the leverage of significant Federal investment in support of private capital.

The four funds are set up as ten-year, closed end Trusts.

Differentiating Features of the SciVentures PSF

The SciVentures pre-seed fund is a true pre-seed fund that has been designed to invest in the earliest recognized potential of a research outcome.

Thus the fund is designed to avoid the issue of valuation prior to investment. Avoidance of valuation before pre-seed investment overcomes the conundrum of requiring a premature valuation in order to invest in pre-seed activities, which of their very nature will better define the value of the investment.

Thus the fund invests small amounts early, when the risk is greatest, increasing investment as information is obtained which reduces risk.

SciVentures invests in three sub-stages during its pre-seed process. These are described in greater detail here.