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The Australian Investment Council has compiled the following information to provide more background and detail around the investment process - including key guidelines and templates for entrepreneurs and business owners.

How does private capital work?

The Australian Investment Council’s member firms comprise institutional investors, private capital investment firms, as well as leading corporate and strategic advisors. 

Private capital investment firms raise funds from a variety of sources, including institutional investors such as superannuation and pension funds, and invest these funds over a period of around ten years. Different types of private capital firms invest in businesses at varying stages of their development and life cycle. Some firms (such as venture firms) specialise in supporting businesses in their startup or early growth phase, while other firms may specialise in supporting businesses that are in a major growth or expansion phase (growth private equity). 

For businesses that are underperforming or in financial difficulty, specialist investment firms (turnaround private equity funds) can play a valuable role in reviving the operations and re-positioning the businesses for future growth. Other specialist firms (buyout private equity and private credit) invest in larger corporations who may be divesting non-core business units, or seeking to take a publicly-listed corporation back into private ownership. 

One of the key differences in the investment strategy of private capital firms is that the investment is typically accompanied by strategic support to help the business grow, expand and become more profitable in a sustainable and measurable way. Often, this means that private capital investors – as major shareholders – will become involved in supporting the business through appointing one or more representatives to the Board of Directors to assist the management team with developing and executing the business strategy. 

After several years, private capital firms will look to divest all or some of their interest in the business in order to provide capital and returns back to the investors in the fund. Divestments generally occur through disposal of equity or other interests in the business via trade sale, secondary-market sale, share market listing, or a sale to management of the business. 

How does venture capital work?

A detailed explanation on the industry, how the investment process for start-up and early stage businesses works and how to choose the right investor for you. 

Read more

 

Preparing a business plan

When seeking out investment, it’s important your plan is clear and your numbers are watertight. Read our business plan outline.

Read more

 

Venture Capital Entrepreneur Visa

The venture capital entrepreneur stream of the Business Talent visa provides direct permanent entry for migrant entrepreneurs who have successfully sourced venture capital funding through a venture capital member of the Australian Investment Council. Find out more here. To see how we define a venture capital member, see the FAQ below. 

One of the key differences in the investment strategy of private capital firms is that the investment is typically accompanied by strategic support to help the business grow, expand and become more profitable in a sustainable and measurable way.

The benefits of investment from private capital firms

  • Long-term injection of capital 
  • Support from a business partner that shares their skill, expertise, risk and rewards
  • A strong capital base for future growth, with additional funding available if required
  • Business mentorship and strong governance on strategic, operational and financial matters
  • Access to the investor’s alliances and networks to assist with key business priorities such as talent management and recruitment, accessing international markets, and introductions to strategic partners
  • Developing a capital structure strategy that is best suited to the business, including long-term investment and divestment plans.

FAQ's


How do I know if investment from Private Capital is right for me?

The Australian Investment Council has compiled background information and guidelines to assist with your decision making, along with a list of our current members. The Australian Investment Council does not make any recommendations or provide advice about specific investors or investment opportunities. 

I'm a VC investor, can I join the Australian Investment Council?

Venture capital funds are wholesale institutional funds that invest in early-stage companies in innovative industries such as life sciences, information technology, financial technology and communications sectors. They provide finance to incubate, commercialise and grow these companies over the long-term.
The Australian Investment Council defines venture capital funds as those that have Australian-domiciled funds with a minimum of A$15m under management. We reserve the right to assess each membership application on a case-by-case basis before admitting new firms into the membership of the Australian Investment Council.

Do you have a list of venture capital firms which operate in Australia?

Venture capital firms which are members of the Australian Investment Council can be found by searching our Member Directory.

Where can I get more information about sourcing capital?

The following organisations may be helpful in providing more information specific to your needs or location.
Australian Association of Angel Investors
Australian Business Angels
Department of Industry, Innovation, Science, Research and Tertiary Education
NSW Enterprise Workshop
NSW Trade and Investment
Queensland Government
SA Innovation
SA Funding Grants
Tas Government
Venture Capital SA
Vic Department of Business and Innovation
WA Government