VENTURE CAPITALIST: Hey David Gonski, Here’s One Thing You Could Do Address Those Investment Concerns Of Yours

Stuart Richardson is the founder and managing partner of Adventure Capital and the iconic York Butter Factory.

David Gonski seems to be walking around with blinders on, perhaps oblivious to the rapidly growing entrepreneurial movement in Australia.

Earlier this week, Gonski – one of Australia’s most well-connected directors and chancellor of the University of NSW – told a Sydney conference that local investors were too focused on short-term gains to support a sufficient pool of early-stage funds for innovation.

He has been very hypocritical: as chairman of Australia’s Future Fund Gonski is in the ideal position to lead by example and allocate capital from funds to Australian venture capital firms.

Gonski and super fund managers need to stop their penny wise, pound foolish modus operandi, and demonstrate leadership through action not just words.

Australia is a very clever, and innovative nation. Some revolutionary technologies that have come out of Australia include: the refrigerator, the Blackbox flight recorder, ultrasound scanner, Cochlear implant, ResMed sleep disorder, CSIRO WiFi, Google Maps, and the Axiflux electrical machine.

We also lead the world in multi-sided marketplaces with 99designs, Freelancer, Realestate.com.au, Carsales, Seek, PepperstoneFX and OzForex just to name a few.

It is clear we have the human capital and create the intellectual property needed to build (multi-)billion dollar, world changing companies. Billion-dollar companies are not geographically challenged, they can be built in any country – not just in the US.

In recent years, Australia has culturally lacked the confidence needed to take moon-shots, with our aspirations dulled by the moniker of being in the lucky country. The success and wealth accrued has created a foundation wherein the moon is getting closer. Fortunately what we lack in confidence, we make up for with tenacity.

Over the last few years the Australian Government and the economy has been volatile, creating a massive innovation deficit.

Whilst our government provides a world-class economic infrastructure to entrepreneurs in the form of tax-free returns, R&D incentives, the travesty is that Commercialisation Australia now boasts being the most active Venture Capitalist in Australia, and the entrepreneurial ecosystem is grossly under-capitalised.

Whispers from the shadows about ineffective portfolio allocation by the Australian superannuation industry and Future Fund are now resonating across Australia.

But spare a thought to the fund managers responsible for your retirement as they struggle to deploy 9.25% of everyone’s salary month-in and month-out (circa $87 billion a year), and divvy up in excess of a $1.5 billion in ‘management’ fees regardless of performance.

The default option for this huge quantum of cash is straight back into the ASX, wherein the top 10% companies trade with ~62% of the market cap valued at almost $900 billion.

This problem of allocating the money isn’t getting smaller either – with superannuation contributions to grow annually to 12% by 1 July 2019.

Here’s hoping this money is allocated to alternative assets in lieu of that which is subject to 30-, 60-, 90-day time horizons which are ineffective at accurately gauging the performance of innovative initiatives and the moon-shots we should be backing ourselves to take.

Gonski has one of the largest caches of capital at his fingertips, intended to invest in Australia’s future, and influence to match; yet he is only encouraging others do something about it rather than leading from the front.

Instead of just talking-the-talk, why doesn’t he start walking-the-walk by allocating the Future Fund into venture capital in Australia?

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