startup ecosystems and compound interest - australia
TRANSCRIPT
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Building Technology Ecosystems and the
Importance of Compound Interest
Mick Liubinskasmuru-D, Pollenizer, Startmate
2014
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“The most powerful force in the universe is compound interest.”
Albert Einstein
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What is compound interest?
Where the returns increases the size of the base, which then increases the size of returns, which increases the size of
the base, and so on
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What happens when a company gets capital outside Australia or moves overseas?
Founders
Company started in Australia
Founders
Capital & Help
Australia
They need capital and help, but can’t find it in Australia
Founders
Capital & Help
Australia
They find it overseas and often move near the capital
Overseas Investors
Founders
Capital & Help
They find it overseas and often move near the capital
Overseas InvestorsAustralia
Founders
Capital & Help
Grow & Succeed
With the help, they grow and succeed
Overseas InvestorsAustralia
Founders
Capital & Help
Grow & Succeed
Cash Out
Through dividends or trade sale, they get cash out
Overseas InvestorsAustralia
They play golf, go to Mexico, get bored, get back in the
game
https://flic.kr/p/5Re1Bo
Founders
Capital & Help
Grow & Succeed
Cash Out
Because of connections and experience, they are often likely to become overseas investors, more than Australian investors
Overseas InvestorsAustralia
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What happens when a company gets capital
from Australia and stays here?
Founders
Australia
Company Started In Australia
Founders
Capital & Help
Australia
The start growing and need help and capital
Founders
Capital & Help
Smart Investors
Australia
They find an experienced, local investor
Founders
Capital & Help
Grow & Succeed
Smart Investors
Australia
With help, they grow and succeed
Founders
Capital & Help
Grow & Succeed
Cash Out
Smart Investors
Australia
Through dividends or trade sale, they get cash out
Play golf, go to Croatia, get bored, want the thrill again
https://flic.kr/p/6YLTkE Creative Commons
Founders
Capital & Help
Grow & Succeed
Cash Out
Smart Investors
Australia
Then they become experienced investors. The ecosystem grows at a
faster rate
Triple Compound Interest
1. Local investors get returns and base grows
2. Founders become local investors and base grows
3. Share options give employees returns and base grows
So what is the priority?
Startups are hard.
The priority of the founders is to succeed.
The priority of the industry is to help them succeed by staying here.
What can you do?
Invest in an Australian Startup. Even $5,000 and one day per month will make a massive difference.
Help connect Australian startups to Australian investors.
Lobby government to change ESVCLP to apply to all startup investing.
If you’re a co-founder, try extra hard to find the right investor in Australia. But, do what you need to do.
How’s my driving?
Email me with feedback at [email protected]
Mick LiubinskasEntrepreneur in Residence at muru-D
Co-Founder of PollenizerInvestor at Startmate
http://liubinskas.com