Innovation Investment Fund Program - Fact sheet

The Minister for Innovation, Industry, Science and Research is calling for applications under the Innovation Investment Fund (IIF) Round 3 Tranche 4.

What is the Innovation Investment Fund?

The Australian Government’s IIF is a venture capital program that supports 10 year innovation funds to develop high growth Australian companies to become globally competitive by commercialising the outcomes of Australia’s strong research capability. The Australian Government has supported venture capital through its IIF program since 1998. Over the three rounds the program has licensed 16 fund managers and has supported more than 100 new companies.

IIF Round 3 Tranche 4 is the final Tranche. The Australian Government will commit up to A$100 million to be matched at least 1:1 with private sector capital.

What are the objectives of the fund?

The Innovation Investment Fund Round 3 objectives are to:

• develop fund managers with experience in the early stage venture capital industry
• by addressing capital constraints and management constraints, encourage the development of new companies that are commercialising research and development
• establish, in the medium term, a ‘revolving’ or self-funding scheme
• develop a self-sustaining, early stage venture capital industry in Australia.

What are the merit criteria?

Competitive assessment of applications is against the following merit criteria:

The fund’s proposed committed capital:

• the proposed size of the fund
• the ratio of privately sourced capital to Commonwealth program capital (subject to the Commonwealth program capital not exceeding a 1:1 ratio to the privately sourced capital and the Commonwealth program capital being no more than $100 million)
• the fund’s proposed investors and the amount of capital to be committed by each
• the amount of capital, if any, to be committed by the proposed key personnel of the fund manager

The applicant’s proposed investment strategy:

• the extent to which the fund’s proposed investment strategy is consistent with the objectives of the IIF program, including the establishment and management of a balanced portfolio of investments in early stage companies
• the number and the size of investments the fund proposes to make and the proposed investment sector by activity
• the level and structure of management fees proposed

The experience of the applicant’s investment team:

• whether the applicant has a balanced management team including relevantly qualified and skilled personnel
• the applicant’s capacity and experience in early stage equity investing giving particular attention to realising returns from investments, sourcing investment opportunities and managing an investment portfolio
• whether the applicant has an understanding of and experience in dealing with issues related to Australian and international investments, products, services and markets
• whether the proposed applicant has effective strategies to contribute to training and developing of Australian based staff in all aspects of making venture capital investments in early stage companies

Intent:

• whether the applicant has a demonstrated willingness to operate within the intent of the IIF program

When do I apply?

The IIF program is currently open to fund manager applications.

Potential applicants can register their interest at iif3@innovation.gov.au.
Applications close 7pm local time, Monday 2 July 2012.

How much will it cost to apply?

To contribute towards due diligence costs there is a A$5,000 application fee. An application is not complete until the application fee is paid. Application fees are not refunded under any circumstances.

Note, if the application is shortlisted and proceeds to the Stage 2 detailed assessment (see the Assessment Framework) there is a second fee of A$5,000.

How will my application be assessed?

The Australian Government has established Innovation Australia as an independent statutory body with non-financial administrative responsibility for the IIF. Innovation Australia’s functions include the technical assessment and merit ranking of applications in accordance with the Ministerial Guidelines.

The Program Delegate decides successful applicants based on the recommendation from Innovation Australia and other advice.

Announcement of successful applicants

The Minister for Innovation, Industry, Science and Research will announce the successful applicants. 

Successful applicants invited to submit an offer to establish an innovation fund will only have six months from notification of success to agree on the fund’s governing documents and confirm their matching private capital.

Companies seeking finance from an IIF

IIF fund managers make all investment decisions.

To be eligible for investment under the IIF program a potential investee company must meet eligibility criteria. The IIF Program Guidelines define an eligible and ineligible investee company.

Note, the IIF does not invest directly in ventures, potential investee companies seeking access to venture finance should contact managers directly.  Please refer to the IIF fund manager contact list.

AusIndustry contact

Graydon Smith
Manager, Venture Capital Funds
Ph:   +61 2 6213 6209
Email: IIF3@innovation.gov.au

 Download a PDF version [240Kb]