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INTERSEKT: There's a $200,000 reason stopping Australia from becoming a global startup hub

Business Insider Australia is the proud media partner for Intersekt, the annual FinTech Australia festival discussing leadership and innovation in the nation’s financial technology sector. The fun begins October 27 in Melbourne, culminating in the Collab/Collide Summit on November 2 and 3.
Buy your tickets now at intersektfestival.com. »
H2 entrepreneurs Gilberto Spencer (MyClaimMate), Francisco Fleming (mPhyt), Marisol Challen (PayNinja) and Alejandro Moran (mPhyt). (Source: supplied)

The local startup industry has urged the government to relax visa restrictions for foreign entrepreneurs wanting to come to Australia to develop their ventures.

Australia currently has an entrepreneur visa that requires the applicant to demonstrate at least $200,000 of investment into their business, which can come from either venture capital or government grants.

Critics from within the startup community say the $200,000 threshold is too onerous and is stopping Australia from becoming an international tech entrepreneurial hub.

“Australia’s startup infrastructure and lifestyle is held in high regard around the world and therefore, with the right policy settings, we should be able to attract many high-quality international entrepreneurs,” said Toby Heap, partner at Sydney accelerator H2 Ventures.

“The high-growth startups that these entrepreneurs establish will be creating jobs in Australia that don’t currently exist – not taking any existing jobs.”

The number of people currently applying for the entrepreneur visa is so low that the department of immigration’s own website states that estimated processing times are “unavailable due to low volume of applications”.

http://www.border.gov.au

Back in June, a joint submission from FinTech Australia, StartupAUS and TechSydney saw a call for the $200,000 requirement to be abolished if a startup is accepted into an Australian incubator or accelerator. Australian Private Equity and Venture Capital Association urged the same in a submission in July.

An ideal destination

H2 Ventures’s latest class of 16 startups have four businesses run by overseas-born founders – three from Latin America and one from Vietnam.

Chilean Francisco Fleming, who has been in Australia for one year, and Mexican-born Alejandro Moran, who has been in the country for six years, co-founded H2 member mPhyt, a digital health platform that helps the elderly stay healthy and independent at home and matches them to carers.

Fleming said Australia is seen by Latin Americans as an ideal destination to grow a startup.

“Australia is seen as a place which is stable and has a good economy, along with being innovative. People also love the quality of life,” he said.

“You have a lot of Latin Americans here, you only need to go to the beach on a Sunday afternoon to see this… What’s more, in our field, Australia has a really good healthcare system.”

MyClaimMate founder Gilberto Spencer said his venture would have been infinitely more difficult to get off the ground in his native Mexico or in the neighbouring USA.

“A few months ago I was working in the Commonwealth Bank, with a dream of helping people when facing a difficult and unexpected life event. I then started to go to events and meeting people,” he said.

“Now I am part of a community here [in H2] – I feel very supported and can’t believe I am here.”

Alex Huynh, who is the founder of H2 startup Inspitrip, was born in Vietnam and attended high school and university in Australia. He regularly travels to Vietnam to develop his travel tech business.

“Vietnam has so much entrepreneurial talent on offer which could be attracted to Australia if the visa policy settings are right,” he said.

“My view is that the $200,000 investment requirement is way too high. Vietnamese entrepreneurs would choose Singapore or Hong Kong instead.”

PayNinja co-founder Marisol Challen, who hails from the Gold Coast with Latin American heritage, was surprised by the size of the international contingent in the latest H2 intake.

“Coming here and seeing all these people with a Spanish background and speaking Spanish, it was like ‘wow’,” she said.

“Everybody here is like a family and supports each other. For us founders having that support is invaluable.”

The entrepreneur visa issue will be discussed at a panel session at the Collab/Collide Summit, held as part of the Intersekt fintech festival on 3 November 2017 in Melbourne. Book your tickets at intersektfestival.com.

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