summary from article by Jason Clout
Investors are again looking to invest in young companies from the private sector, as the wealthy realise that the stock market and property market is fully valued. The BSI Investort Forum is the place wqhere these investors can get first hand information on the opportunities tyhat are available.
The hot areas for investor interest are devices, applied software and wireless telecommunications.
Most of the new breed of private equity investors have run successful businesses, they require a lot more than just a good idea before they will outlay any cash.
BSI director Alan Milwidsky says the new investors seek four things in a potential investee company.
It must have a sound business model, technology which is ready to be commercialised, three to 10 existing customers and an ability to rapidly take the product overseas, he says.
"The Australian market is rarely big enough. They need to be able to quickly get into other markets."
Nor is the other market always the United States. Milwidsky says China is trying to take a generational leap and wants access to the world's best technology.
Private equity has generally been known as patient capital, because of the time investors were prepared to wait for a return. But Milwidsky says more investors now want a return along the way.
"They want regular dividends. The structure of the deals has changed with increasing use of convertible notes, which can be converted to equity."
Mulquiney of Nanyang ventures points out some venture capital firms are very active in locating investments, with Nanyang making three deals in the past three months.
One of these was a $5million investment in the South Australian-based irrigation company Micromet, and a $3m deal in Emailcash.
"There are still a lot of early stage VC funds who have money to invest," Mulquiney says.
"There may be fewer of the pure start-up businesses being funded - those which have little more than a concept - but venture capitalists were looking at more established businesses."