The Victorian government will seed as many as 50 startups through an Australia-first fellowship program that gives university students and PhD candidates the opportunity to commercialise early-stage research.
The $7.5 million Breakthrough Victoria University Innovation Platform Fellowship Program, announced on Friday, will offer pre-seed funding to founders in or just out of university.
It is part of the $100 million University Innovation Platform partnership between the $2 billion government-backed venture capital fund and universities like Monash, RMIT and Swinburne.
Treasurer and Minister for Growth Tim Pallas said the fellowship program would give a leg up to entrepreneurs, grow local innovation and create at least 50 new jobs in the process.
“This new program is going to help more brilliant Victorian researchers take their research to the next level and get products into market – boosting jobs and supporting business growth in the state while cementing Victoria as a world-class startup hub,” he said.
The multi-year pre-seed funding program aims to help overcome the financial barriers undergraduates, postgraduates and recent graduates from all Victorian universities and medical research institutes face when starting a company.
It follows a a post-program review of University of Melbourne’s PhD Innovators Program that found 89 per cent of participants were interested in becoming founders but that investment opportunities were scarce.
Professor Colin McLeod, who led the review and heads up the Melbourne Entrepreneurial Centre, said the new fellowship program would foster a “new wave of startups” by providing recent graduates with “crucial support” to transform their ideas into ventures.
“When we engage with leading international universities and investors, we consistently hear that many thriving founders are fresh graduates, both at the undergraduate and postgraduate levels,” he said.
“However, after spending three to five years immersed in their studies, these many new graduates can struggle to find the time and financial resources to bring their ideas to market.”
Under the program, each recipient will receive up to $150,000 for research commercialisation, with up to $90,000 of the invested capital to be drawn as a salary. The remaining funds will support hiring or product development.
Breakthrough Victoria will evaluate applications based on the “commercial potential of the research, co-investment from university or industry partners, the founder’s prior startup experience or participation in university accelerator programs, and a business plan demonstrating the ability to reach critical investment milestones”.
Breakthrough Victoria’s acting chief executive Lauren Morrey said the program former part of a broader strategy to “back high-potential research and ensure it doesn’t lose momentum in the critical early stages”.
Last month, the fund posted a $3 million loss — its first since inception — due in part to the firm jettisoning operating grant income that had previously boosted its finances.
But returns have started to pick up, with investment income from Breakthrough Victoria’s $261.8 million portfolio growing almost 60 per cent last year, while direct operational costs have also fallen with fewer staff employed.
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