Just how contentious is government venturing? “Government money is toxic,” declared one delegate on the sidelines of the recent Global Corporate Venturing Symposium in London. Really? Why? “Because of the corruption. We don’t touch it.”
Such a decided viewpoint has to considered in the context of the particular government in question, which will go unnamed. Other comments, with respect to other governments, made less use of the bargepole.
One visitor to the symposium – a corporate venturing investor from the Benelux region – said government venturing efforts were most effective where they had most focus, as in Israel and Norway, where government venturing investments surround the oil industry, the country’s core, sectoral strength. Government venturing investments back home suffered a comparative lack of focus, he suggested.
This conversation soon slipped into a debate among fellow Benelux‐based delegates regarding the political challenges of dredging Rotterdam’s harbour. However, visitors from around the world were in attendance at the symposium.
Husband and wife team Andrew Kelly and Margot Bethell, executive directors of Bio Pacific Partners – innovation scouts covering the Association of South‐east Asian Nations region – brought with them unsettling news that Australia was ceasing government venture capital activity. Australia’s co‐investment approach, as pointed out in my last editorial comment, has been a poster child for government venturing. In the annals of academic research into the efficacy of government venture capital investments, Australian data provides a turning point from dubious to positive results.
But they are right. On the Ausindustry.gov.au website is a corroborating statement: “As part of the 2014‐15 federal budget, the government has decided not to proceed with the fourth round of the Innovation Investment Fund (IIF) programme that was announced by the previous government. The venture capital funds that were established under previous rounds of the IIF programme are unaffected.”
The static information about the IIF remains in place, describing how the programme was established in 1998 and that it “co-invests with private sector investors in venture capital funds to grow early-stage companies to commercialise the outcomes of Australia’s strong research capability”. However, the “program status” field now reads: “Closed”.
I leave Andrew and Margot discussing the eerie landscape of Saskatchewan – where they once lived for two years – with Canadian citizen Tony Stanco, executive director of DC‐based National Council of Entrepreneurial Tech Transfer. And I soon find views on another possible poster child of government venture capital investment, Germany’s High‐Tech Gründerfonds (HTGF), first established in 2005.
But the general response to HTGF, here at the symposium and beyond, is mixed – on the negative side, that it has too many portfolio investments, that the amounts invested by the private sector, as part of its public-private structure, are actually quite small, and that it is too restricted to Germany in its scope; on the positive side, that HTGF provides expertise networking, and that the top executives really do reach down to grass-roots level, at events such as HTGF’s annual Family Day.
No, HTGF does not come across as a model that should be, or is yet ready to be, exported to other countries. On the other hand, one delegate was looking to translate a certain government venturing model from the UK to Germany. Hanno Hepke, a partner at Warth & Klein Grant Thornton (WKGT), believes the UK’s Growth Accelerator, a partnership between WKGT, Pera, Oxford Innovation and Winning Pitch backed by the UK government through its Department for Business, Innovation and Skills, is exportable. Consultancy, more than finance, is what the GrowthAccelerator provides, and according to www.growthaccelerator.com, 10,000 businesses have already signed up and are accelerating away.
Among all this sideline chat about government venturing, there was also real government presence on stage. Rwandan high commissioner Williams Nkurunziza – who graciously waved away my mispronunciation – did not come to the symposium loaded with any particular scheme or programme for start ups, but he did make a compelling case for recognising the country’s fast-developing capital Kigali as an east African regional hub. I am sure that his parting personal invitation to visit Rwanda – “Africa’s Switzerland” – is open to all.