This is part of a survey of investors focused on Australia and New Zealand. The following responses are from the Australian investors. You can find the New Zealand responses here and the full writeup here.
We spoke with:
- Gabrielle Munzer, partner, Main Sequence
- Dan Krasnostein, partner, Square Peg
- Craig Blair, co-founder and partner, AirTree
- Samantha Wong, partner, Blackbird
The responses have been edited for length and clarity.
Gabrielle Munzer, partner, Main Sequence
Inflation is slowing. Does the possibility of fewer interest rate hikes in the future change your venture capital investing and fundraising strategies in the coming quarters?
Slower inflation and fewer interest rate hikes present a more positive outlook for both public and private equity markets, though it is important to recognize that this may not be an immediate recovery but a gradual improvement. In upcoming quarters, we anticipate valuations of late-stage venture capital in particular will begin to improve, accompanied by the reopening and increased receptiveness of IPO markets.
We’re most excited about increased exit opportunities for maturing companies within the portfolio, in line with our long-term approach.
Both the number and value of venture deals decreased in Q3. Are you expecting the same trend to continue in Q4 2023 and into 2024?
Likely yes, as the end of the year and early new year traditionally bring a slowdown in venture capital activity. But in startup land, limitations often compel founders to rethink their approach and push to new heights of creativity. What we are seeing as a result, is startups adapting by extending their runways in a variety of ways, including rationalizing their resources, entering strategic joint ventures with key customers, adapting business models to realize more revenue upfront, spinning out subsidiaries, and using alternative capital-raising options like convertible notes and venture debt.
That being said, high-quality companies will continue to secure venture equity funding. The ecosystem has ample capital available, especially for startups working on deep tech solutions that address climate or sovereign capability challenges. For us, the responsibility is ensuring that the most impactful and commercially promising of these ventures are connected with the resources they need.
How does declining late-stage venture round velocity in Australia and New Zealand impact your investing strategy? For those who mainly invest in seed and Series A, does this make early stage more crowded?
Recently, the net effect of lower velocity in later-stage venture rounds has been to heighten our criteria and expectations for these earlier-stage investments, and across the board, we are dedicating more time to supporting our portfolio companies in navigating their fundraising efforts. That said, many of Main Sequence’s co-investors are offshore partners, and we are certainly still seeing interest in growth-stage opportunities with promising traction.
Climate tech has been a huge driver of private investment in both Australia and New Zealand. Are any of these players poised to become global leaders? What kinds of incentives, laws, or policies would be helpful?
Looking specifically at deep technology, Regrow, Loam and SunDrive show immense promise, alongside younger but equally impactful ventures like Samsara and MGA Thermal.
To support their growth and reinforce Australia’s position at the avant-garde of climate tech solutions, policies to finance first-of-a-kind climate facilities, such as grants, matched government funding and incentives for more traditional infrastructure-style investors to offer debt and equity, will be instrumental. Equally, policies that promote or mandate the monitoring and reporting of Scope 3 emissions, which are indirectly incurred throughout the whole value chain of a company, would help drive transparency and accelerate the adoption of many climate tech solutions.
Blackbird opened a New Zealand fund, and many New Zealand investors look to Australia for new investments. What is the relationship between the two countries when it comes to funding each other? Does your firm prefer to fund locally?
At Main Sequence, we focus on companies with ties to Australian public research; however, the frequent collaboration between Australian and New Zealand universities and startups means our investments can play a part in nurturing connections across the Tasman. New Zealand has a strong deep tech pedigree, grounded in companies like PowerbyProxi, Rocket Lab and LanzaTech, and we recognize the potential for future growth.
In 2023, we made our first official trip to New Zealand and are excited to collaborate with multiple NZ-based deep tech venture firms and the NZ research commercialization group, KiwiNet.
Funding in AI startups increased this year. What are the challenges that AI startups in Australia/New Zealand face, particularly as they tee up against giants abroad?
The key challenge for AI startups in ANZ is the fierce competition for top AI talent. Startups here are up against deep-pocketed firms that can afford to bid up remuneration to attract the best experts globally. That said, Australia has a strong pool of talent in AI, particularly in natural language processing and computer vision.
In addition, Australian AI startups have a distinct leg up when it comes to applying AI to industries in which we have a natural advantage. Here, the ROI of automation and/or new insights can drive significant tangible value. So with in-depth knowledge of domestic supply chains in industries like agritech, construction, manufacturing and mining tech, we’re well-positioned to tailor solutions. The startups we’ve backed in these sectors understand customer pain points and work closely with customers to improve the productivity, safety and sustainability of their businesses.
Investors are becoming more demanding in the current environment about deal terms to de-risk their investments. Have you found this to be the case? How do you walk the line of de-risking yourself without overdiluting a young company and stifling growth?
It’s true we are seeing investors look for more de-risking provisions in the current climate. However, it’s important not to go overboard in a way that stifles a young company’s growth.
We aim to strike a balance — putting in place reasonable provisions to protect our investment, while ensuring founders retain enough equity and control to stay motivated. Overly diluting founders can be counterproductive down the line if it damages their motivation or commitment.
Ultimately, we want founders to know they have meaningful upside through value creation at exit. That comes from ensuring they have enough capital to hit key milestones that can significantly increase their valuation and grow the pie for all shareholders.
Rather than simply de-risking through restrictive terms, we can seek comfort through establishing an active partnership with founders. For example, taking a board seat enables us to work closely with founders to build the company. With the right alignment, we feel protected through participation rather than by extracting challenging terms.
There has been a decline in mega deals, venture deals worth over $100 million in Australia and New Zealand. Do you think we’ll see an increase in mature startup acquisitions? Shutdowns? A resurgence of substantial funding to sustain growth?
With valuations becoming more sober in the current climate, we expect we’ll see an increase in mature startup acquisitions, strategic mergers, and joint ventures in Australia and New Zealand.
Is there value in seeing international investors on the cap table? How much time do you spend seeking foreign co-investors?
For deep tech startups in particular, having international investors on the cap table can bring significant advantages. Their networks and expertise can be invaluable in helping companies expand into new geographies, where the commercial and regulatory landscape may require different approaches.
Foreign investors tend not to compete directly with local VCs in deep tech — if anything, they prefer having local partners with boots on the ground to support their overseas investments, so it’s often a win-win.
There continues to be strong interest from global VCs looking to tap into Australia’s expertise in research-driven fields like quantum, semiconductors, synthetic biology, agritech and more. We’re seeing foreign VCs eager to co-invest in Australian deep tech alongside local leaders.
What advice are you giving your portcos right now when it comes to raising money? Are you suggesting they sell convertible notes? Or perhaps raise as usual?
Have very clear objectives that demonstrate progress between rounds. Sharpening product-market fit and creating best-in-class solutions that address urgent customer and planetary problems is key to demonstrating strength. In addition, show us a path to profitability and efficiency in how capital will be used.
As for convertible notes, they can selectively make sense in circumstances where the performance metrics needed for a priced round are not yet available, but the company continues to show promise and has definition around how those metrics can be achieved with some additional capital and time.
Overall, it’s about mapping the fundraising approach to the specifics of where the company is at in its journey. Focusing on customer traction and market fit will serve founders well in this fundraising climate.
Venture debt makes up a small portion of deals in Australia, but it can provide a wider range of strategies for startups to navigate the life cycle from seed to scale-up. Are you expecting venture debt to become more widely used in the next year? Also, venture debt has its downsides. Do you think it’s a good thing?
Venture debt currently makes up a small portion of deal flow in Australia, but we do expect it to become more widely used in the coming year as an additional financing strategy for startups. As the venture debt landscape matures, there are more providers entering the market and the terms are also improving so that more companies can service the debt. This will open up the option for more startups.
Overall, debt financing can be a useful tool for deep tech startups when used strategically, but it needs to be carefully considered. The downsides are taking on debt too early without proven traction or using it to mask deeper issues with the business model. However, when used judiciously, venture debt can provide startups with greater flexibility in navigating the life cycle from seed to scale-up.
Dan Krasnostein, partner, Square Peg
Inflation is slowing. Does the possibility of fewer interest rate hikes in the future change your venture capital investing and fundraising strategies in the coming quarters?
Our investment approach remains the same. Top-quartile companies are still being created, and they are able to raise money, albeit in a more challenging market environment.
While the general pace of investing has slowed across the venture capital industry when you compare the data to the period of late 2020 and 2021, if you compare the data to the 2016-2019 period, both funding levels and valuations look very normal.
Over the past few quarters, things have certainly gathered pace. We continue to meet with a growing number of founders across our investment geographies (Australia and New Zealand, Southeast Asia, and Israel) who are building and scaling tech businesses, particularly in the fintech, SaaS and artificial intelligence spaces. Square Peg has invested in a number of these companies recently that are yet to announce their capital raise.
Both the number and value of venture deals decreased in Q3. Are you expecting the same trend to continue in Q4 2023 and into 2024?
Again, it depends on your point of comparison. Compared to 2016 to 2019 period, funding levels and valuations look normal.
In Australia, the first three quarters of 2023 have been relatively stable. And whilst the figures are considerably down when compared to 2021 and 2022, the first nine months of 2023 are actually marginally up on the same period in 2020. I expect the pace to remain stable or slightly up on where we’ve been the last 18 months or so, but not a return to the hyper-growth of 2021/2022.
How does declining late-stage venture round velocity in Australia and New Zealand impact your investing strategy? For those who mainly invest in seed and Series A, does this make early stage more crowded?
It hasn’t impacted our investing strategy or approach. The best companies will continue to get funded, at all stages.
Clearly, there is less late-stage capital around, but this has not resulted in a significant increase in competition at the early stage. This is because the majority of late-stage capital was offshore capital and they have pulled back funding rather than re-allocating it to earlier stages. What we are seeing is more local funds entering the market at the early stage, which is a strong sign of a vibrant tech ecosystem in the region.
Climate tech has been a huge driver of private investment in both Australia and New Zealand. Are any of these players poised to become global leaders? What kinds of incentives, laws, or policies would be helpful?
Aussie and Kiwi companies are without a doubt staking out global leadership positions in emerging climate tech spaces. For example, in the bio space, the future of meat is being created by Vow, farms are being turned into massive carbon sinks by Loam Bio, and Samsara is making plastic recycling a reality. In energy, companies like Neara are enabling utilities to plan for and manage the energy transition.
On the regulatory side, we’ve seen the game change in the last few months as the incentives from the Biden government’s IRA have created more demand for carbon sequestration technologies. We also think that the EU’s Carbon Border Adjustment Mechanism will drive exporters to think more deeply about cutting emissions. One policy area where we believe more certainty is required is around how high-quality, long-term, verifiable removal and storage of carbon will be regulated and priced.
Blackbird opened a New Zealand fund, and many New Zealand investors look to Australia for new investments. What is the relationship between the two countries when it comes to funding each other? Does your firm prefer to fund locally?
At Square Peg, we invest across Australia and New Zealand. Some of the Kiwi companies we’ve invested in include the global auto parts platform Partly, employee feedback tool Joyous, and point of sale system Vend. The Australian and New Zealand tech ecosystems share many characteristics including cultural similarities, small domestic markets, and founders and startups thinking globally from day one.
Fintech has historically been a big sector in Australia/New Zealand, but we’re seeing a dip in funding invested into the sector this year. Why has investor appetite declined?
The cadence of investment has slowed across the tech sector, not just the fintech category. We’re still seeing healthy investment in local fintech businesses. Earlier this year, Square Peg led the seed round for Constantinople, an all-in-one software and operational platform for banks.
Within the fintech category, however, there has been an extra layer of pressure for lending businesses, as the cost of capital has gone up, and the availability of capital has come down. With interest rates increasing, traditional banks have more availability of low-cost capital, giving them a slight advantage compared to startups in the lending space.
Funding in AI startups increased this year. What are the challenges that AI startups in Australia/New Zealand face, particularly as they tee up against giants abroad?
The most considerable challenge AI startups face compared to global competitors is attracting and retaining high-quality local talent. There is, unfortunately, a brain drain when it comes to AI talent across Australia and New Zealand, and to significantly move the needle on research or technical innovation on AI it helps to have a deeply knowledgeable team.
When we speak to the best AI talent in the region they really feel the pull of the United States, particularly with the breadth of roles available there and with companies like OpenAI offering attractive salaries and incentives. That said, Australia and New Zealand continue to have exceptional developer talent and there are many initiatives driving the development of local research groups and AI communities that will hopefully help grow the talent pipeline and encourage talent to remain local.
Investors are becoming more demanding in the current environment about deal terms to de-risk their investments. Have you found this to be the case? How do you walk the line of de-risking yourself without over-diluting a young company and stifling growth?
Unfortunately, we have seen some of these types of deals coming to the market, not just in terms of valuations, but also in the way deals are structured. For example, overly structured deals that demand liquidation preferences, are starting to return again. At Square Peg, our approach and focus in our venture investing remains on backing founders and anchoring to the upside, rather than worrying about downside protection.
Valuations have also changed in the current market environment, but they are at a more stable and healthy point than they were two years ago. Often a reduced valuation is seen as just beneficial to investors, but it can also be more healthy for companies and their longevity. Overpriced rounds make it harder and harder to keep attracting capital, but they can also cause ESOPs to be mispriced, which also has a flow-on impact on attracting and retaining the best talent.
There has been a decline in mega deals, venture deals worth over $100 million in Australia and New Zealand. Do you think we’ll see an increase in mature startup acquisitions? Shutdowns? A resurgence of substantial funding to sustain growth?
This is a trend we have seen globally, not just in this part of the world.
Over the last few years, the tech industry has witnessed a low number of companies that have shut down, far less than historical averages. While no one wants to see companies fail, it is an inevitable part of the startup landscape, and aligned with the nature of venture investing. As the industry resets to more stable valuations and funding levels, we should also expect more companies to fail or be acquired. This is not necessarily a negative thing, as this will likely result in the reallocation of capital and talent being focused on the most disruptive companies that continue to thrive.
Are you seeing value in seeing international investors on the cap table? How much time do you spend seeking foreign co-investors?
For the large majority of Aussie and Kiwi businesses, their main markets are typically offshore. Having investors on the cap table from these markets can be helpful for areas such as growing and building local teams in those markets, or in finding customers. While having offshore investors on your cap table is not a necessity, we find having a mix of local investors who can be high-touch and on the ground with founders and their teams, as well as international investors can be a really powerful combination.
Fortunately, we’ve seen an influx of interest and capital from offshore investors from the United States and Europe, over the last approximately five years. This is a really great signal of a healthy and maturing ecosystem.
What advice are you giving your portcos right now when it comes to raising money? Are you suggesting they sell convertible notes? Or perhaps raise as usual?
The first thing is that no generic advice is good advice, so each of our companies needs to take a nuanced view.
Venture debt makes up a small portion of deals in Australia, but it can provide a wider range of strategies for startups to navigate the lifecycle from seed to scaleup. Are you expecting venture debt to become more widely used in the next year? Also, venture debt has its downsides. Do you think it’s a good thing?
For a long time, there was practically no venture debt available in Australia and that has started to change over the last three to four years. If you look at more mature venture ecosystems like the U.S. or Israel, venture debt is much more common, and I expect it to become more prevalent in Australia. Whether that is next year or over a slightly longer time period remains to be seen.
Venture debt isn’t for all companies, but overall, I think it is a huge positive for Australia and provides an alternative source of capital to businesses at different stages of their growth cycle. I think too often venture debt has a stigma or is seen as an option for companies that aren’t growing at “venture scale”, but I don’t share this view. Some of our fastest-growing and best-performing companies have used venture debt incredibly well as they’ve scaled.
Craig Blair, co-founder and partner, AirTree
Inflation is slowing. Does the possibility of fewer interest rate hikes in the future change your venture capital investing and fundraising strategies in the coming quarters?
The early-stage investment environment in Australia and New Zealand has never been better. Ambitious founders are emerging from our tech success stories, such as Canva, Go1 and Immutable, so more startups are being born than ever before. And we know tough times can catalyze the formation of great startups. Interest rates don’t change this equation.
What has changed is the flow of capital into later-stage companies. Capital efficiency is being rewarded now versus growth at all costs in the bull market. The bright spot is that Aussie and Kiwi entrepreneurs are among the most capital-efficient producers of unicorns in the world, and there’s plenty of evidence to show them bucking the growth stage pullback trend.
Both the number and value of venture deals decreased in Q3. Are you expecting the same trend to continue in Q4 2023 and into 2024?
We saw the value and volume of late-stage deals drop in 2021 as companies looked to extend their runway and delay funding, which has remained steady since. The drop from Q2 2023 to Q3 2023 was small, and to put things into perspective, year-to-date funding is now slightly above the first nine months of 2020, so what we’re seeing is a return to normality.
At AirTree, the number of deals we’ll do this year and capital deployed will be broadly in line with our long-term averages, and we expect this to continue in 2024.
How does declining late-stage venture round velocity in Australia and New Zealand impact your investing strategy? For those who mainly invest in seed and Series A, does this make the early stage more crowded?
The pullback from international mega funds has been a net positive for the sector. Startups are more focused on business fundamentals such as capital efficiency and good companies are still getting funded at attractive multiples.
The early-stage market is more crowded as multistage funds compete with seed funds to be the first check in. Funds with a brand and network to see and win the best deals will benefit. And it’s also great news for founders.
Blackbird opened a New Zealand fund, and many New Zealand investors look to Australia for new investments. What is the relationship between the two countries when it comes to funding each other? Does your firm prefer to fund locally?
We’ve been actively investing in NZ startups since 2016. We’ve invested and reserved around $100 million in companies like Hnry, LawVu, Joyous, Thematic, Solve, 90 seconds and Altered State Machine. We don’t have a preference as to where they’re based — our mandate is Aussie and Kiwi founders with global ambitions.
Fintech has historically been a big sector in Australia/New Zealand, but we’re seeing a dip in funding invested into the sector this year. Why has investor appetite declined?
Globally, fintech was more prone to inflated expectations in the bull market due to the lure of big markets and large rounds, so it had further to fall. Many fintechs thrive in a low inflation market but struggle in normalized times; so the business fundamentals of several have taken a hit. It’s a healthy reminder for investors of the importance of discipline and understanding the market before investing.
Aussie fintech has always punched well above its weight globally, and we’re particularly excited about the next generation of world-class companies emerging in this category, such as Zepto, Constantinople and Hnry (which is a Kiwi company).
Funding in AI startups increased this year. What are the challenges that AI startups in Australia/New Zealand face, particularly as they tee up against giants abroad?
We don’t view AI any different to other platform shifts like mobile or cloud. AI isn’t a sector; it’s an enabler. The key challenge for AI is the same as what we’ve seen in other nascent periods of innovation: talent. Operators with deep experience in AI are hard to come by but will be the unlock to competing globally.
Investors are becoming more demanding in the current environment about deal terms to de-risk their investments. Have you found this to be the case? How do you walk the line of de-risking yourself without overdiluting a young company and stifling growth?
We’ve seen some examples of investors using structuring to overcome valuation gaps. We’re not a fan of this approach. It can create misalignment with the founder and unnecessary complexity. Our approach is to have direct and honest conversations with founders and keep the terms vanilla.
There has been a decline in mega deals, venture deals worth over $100 million in Australia and New Zealand. Do you think we’ll see an increase in mature startup acquisitions? Shutdowns? A resurgence of substantial funding to sustain growth?
If we look at AirTree’s portfolio in isolation, we’re seeing companies defy this narrative with three of our unicorns — Employment Hero, Go1 and Pet Circle — raising rounds in the last six months at or above their valuations from the last supercycle.
Top companies are attracting global investors and commanding premium valuations and we feel this will continue.
Are you seeing value in seeing international investors on the cap table? How much time do you spend seeking foreign co-investors?
International co-investors who bring smart money and complementary skills to the table are good for the companies and great for the ecosystem. Australia is well and truly on the radar of world-class growth funds such as Insight Partners and Greycroft (investors in Go1’s recent round) TCV (invested in Employment Hero’s $263 million Series F), Prysm (invested $75 million in Pet Circle in July 2023) and Coatue and ICONIQ (Canva’s secondary transaction).
What advice are you giving your portcos right now when it comes to raising money? Are you suggesting they sell convertible notes? Or perhaps raise as usual?
Like most investors, we’ve been guiding our portcos to extend runway greater than 18 months and focus on fundamentals. Many of our portfolio companies are in the fortunate position of having solid war chests from raises in 2021/22. We’ve been working closely with them to take advantage of this and focus on business fundamentals to set them up for success when they need to go back out and raise in 2024/25.
Venture debt makes up a small portion of deals in Australia, but it can provide a wider range of strategies for startups to navigate the life cycle from seed to scale-up. Are you expecting venture debt to become more widely used in the next year? Also, venture debt has its downsides. Do you think it’s a good thing?
Venture debt is a valuable form of capital when used the right way (i.e., as nondilutive capital that extends a round). It can be a bad form of capital if it’s used when a company cannot raise equity or to delay tough decisions on burn.
Samantha Wong, partner, Blackbird
Inflation is slowing. Does the possibility of fewer interest rate hikes in the future change your venture capital investing and fundraising strategies in the coming quarters?
We try not to time the markets and keep a steady investment pace. We don’t believe founders decide to start a company because of what interest rates are doing, and we’re ultimately here to back the next generation of great founders who will build big companies on the timeline of a decade or more.
Both the number and value of venture deals decreased in Q3. Are you expecting the same trend to continue in Q4 2023 and into 2024?
Dealflow has been relatively steady throughout most of this year and based on our pipeline, we would expect Q4 and early 2024 to be pretty similar. There is a lot of pre-seed and seed stage activity and this tends to get under-reported in public sources. So I think the true number of venture deals is higher than the reported figures.
How does declining late-stage venture round velocity in Australia and New Zealand impact your investing strategy? For those who mainly invest in seed and Series A, does this make early stage more crowded?
Our growth stage fund has a lot of flexibility to invest from Series A through to pre-IPO. We don’t feel any pressure to invest at a particular stage along that spectrum, so declining deal volume in late stage doesn’t really affect our strategy. Early-stage activity does feel like it has picked up significantly from the beginning of the year. We’ve always done about two-thirds of our investing in pre-revenue companies, so nothing has really changed for us, but we’ve noticed a lot of new micro-funds as well as angel syndicates and larger firms also investing at the seed stage.
Climate tech has been a huge driver of private investment in both Australia and New Zealand. Are any of these players poised to become global leaders? What kinds of incentives, laws, or policies would be helpful?
Blackbird has invested in a number of climate companies that we believe will become global climate tech leaders. In the energy and resources space, Sundrive, Fleet, Open Star, Aquila, Nomad Atomics are developing technologies that will power the renewable energy revolution. We also invest in climate-adjacent industries such as Sumday in carbon accounting, Vow Foods and Fable, animal-free protein and Mint Innovation and Foundry Lab that improve the sustainability of industrial supply chains.
Australia is a pretty supportive environment to grow a climate tech company. On the funding support side, Australia has an efficient and generous R&D reimbursement regime where companies are refunded 44% of eligible R&D spend. The recently announced $15 billion National Reconstruction Fund (NRF) to invest in areas such as renewables and low emission technologies also represents a great opportunity for Aussie climate startups.
Blackbird opened a New Zealand fund, and many New Zealand investors look to Australia for new investments. What is the relationship between the two countries when it comes to funding each other? Does your firm prefer to fund locally?
We have a dedicated Australian early-stage vehicle, and a dedicated New Zealand early-stage vehicle. We can also invest in both Aussie and Kiwi funds from our Follow-on Fund.
Fintech has historically been a big sector in Australia/New Zealand, but we’re seeing a dip in funding invested into the sector this year. Why has investor appetite declined?
Investor appetite to invest in fintech is still strong but the overall numbers are affected by the absence of mega rounds that we’ve had in the past. The shift away from blockchain would also be contributing to the decline.
Investors are becoming more demanding in the current environment about deal terms to de-risk their investments. Have you found this to be the case? How do you walk the line of de-risking yourself without overdiluting a young company and stifling growth?
We haven’t seen a lot of highly structured deals or unusual deal terms. That said, everyone has heard that they’re out there and if growth milestones are off track, founders are generally more cautious about spending and know what levers they have to get to break even and not have to need to take on capital on punitive terms. When companies do raise, we encourage them to run a competitive process for their rounds to ensure they get the best terms that the market can offer at that time.
Are you seeing value in seeing international investors on the cap table? How much time do you spend seeking foreign co-investors?
It’s a big stamp of approval and part of the growing up process for an Aussie or Kiwi company to take on capital from a global investor. They often have different networks, experience and downstream capital relationships that are important for our companies to have as they mature. We all have active relationships with foreign co-investors and some of the team are actually in the U.S. putting on events in San Francisco, New York and London across November to help solidify and grow these networks.
Venture debt makes up a small portion of deals in Australia, but it can provide a wider range of strategies for startups to navigate the life cycle from seed to scale-up. Are you expecting venture debt to become more widely used in the next year? Also, venture debt has its downsides. Do you think it’s a good thing?
Building understanding and familiarity with venture debt as well as the variety of providers in Australia and New Zealand means I think this will continue to grow. It is a very good option for extending runway in companies that have a good handle on their unit economics, allowing them to focus VC dollars on true risk activities like R&D, exploring new markets and new distribution strategies.