New investment models and a dedicated scaleup plan are needed to build up NSW’s industrial “missing middle”, according to the government’s innovation council, which found growing firms are underserved by the current focus on startups.
To support the scaling firms – which deliver outsized economic impact but face high failure rates in NSW – the council has floated European-style indirect equity investment by the state.
The ‘fund the funder’ model would pair with the government co-investing directly in scaling firms or underwriting risk to entice private investors to fill the current capital chasm.
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