Update

So I real­ly didn’t do much this week. I have always suf­fered from occa­sion­al days where my pro­duc­tiv­i­ty drops off and I achieve vir­tu­al­ly noth­ing. I found that work­ing solo this was much hard­er to arrest and con­trol.

In the spir­it of full dis­clo­sure it was more like two weeks. With a fair­ly sharp decline in the sec­ond half of week 4, the entire loss of week 5 and the first half of week 6. I had over­run set aside in the sched­ule, I had hoped that if it was need­ed it would be due to exter­nal fac­tors… but it means the impact isn’t as bad as it could have been.


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Grants

Rather than leave this entry com­plete­ly depress­ing­ly emp­ty I’ll pad it out with an infor­ma­tive rant on grants.

Pri­or to my move to the Gee­long region every time I heard the city men­tioned in the news it seemed to be attached to anoth­er bun­dle of mon­ey. Espe­cial­ly around the Fed­er­al elec­tion it seemed like politi­cians were deter­mined to drown Gee­long in largess.

So when I hatched this deranged plan and moved to the region look­ing into these buck­ets of cash was always on my todo list. I’m start­ing a busi­ness, it’s new and inno­v­a­tive, in the right area and I may even have to employ peo­ple one day. It is some­thing a num­ber of peo­ple I have talked to have also men­tioned.

I will fore­shad­ow slight­ly by say­ing that every­body who raised it was from out of the region. None of the local accoun­tants I talked to raised it, the one I brought it up with is well con­nect­ed with the region­al com­mu­ni­ty and knew noth­ing about them.

Grants are award­ed by the Fed­er­al and State Gov­ern­ment depart­ments, coun­cils as well as pri­vate busi­ness­es. I sus­pect in the past being aware of a grant was a big prob­lem so the gov­ern­ment has made that part of the process much eas­i­er, with their Grant Find­er web­site.

Using the Grant Find­er you select your region by state, indus­try and a few oth­er ele­ments. It then pro­vides a list of rel­e­vant grants to look up the details of. My list was rough­ly 220 items long. I man­aged to cull this down to about ten worth look­ing in to. I will men­tion though that the City of Mel­bourne has an impres­sive col­lec­tion of grants if you a start­ing a small busi­ness in the Mel­bourne CBD.

GRIIF

The big dad­dy of grant funds is the Gee­long Region Inno­va­tion & Invest­ment Fund (GRIIF), prob­a­bly bet­ter known as the Ford fund. Mon­ey was tipped in by the Fed­er­al Gov­ern­ment, the Vic­to­ri­an Gov­ern­ment, Ford and lat­er Alcoa. Rough­ly half the mon­ey is for North­ern Mel­bourne where the Ford sup­pli­ers and trick­le down employ­ment is actu­al­ly locat­ed. $29.5M is allo­cat­ed for Gee­long.

So far $18M has been spent in two fund­ing rounds. Mon­ey is pro­vid­ed on the basis of cre­at­ing per­ma­nent jobs, all funds must be matched by the receiv­ing com­pa­ny. The grants must be at least $50k but in prac­tice most are well over $1M, the small­est award­ed is $230k. This cor­re­sponds to rough­ly $30k per job. From the grant sum­maries it seems like the grants are bring­ing for­ward planned expan­sion and invest­ment, not nec­es­sar­i­ly bad but use­ful to note in eval­u­at­ing the scheme.

What I found inter­est­ing is that the last round closed on the 29th of May 2014. There has been no announce­ment of a third round, when I inquired as to when a third round was like­ly to occur I was told “at this stage no future rounds or poten­tial dates have been announced.”

All mon­ey from the grant must be spent by the end of the 2015/2016 finan­cial year, this is an impor­tant ele­ment of the fund because it cor­re­sponds to the time­line of the Ford job loss­es. Assum­ing you want a grant to expand your com­pa­ny with a new man­u­fac­tur­ing facil­i­ty I see a crude time­line of:
* 2 months to pre­pare the grant
* 1 month to eval­u­ate the grants
* 1 month to plan the details of the expan­sion
* 6 months to buy the equip­ment, prob­a­bly cus­tom built and sea freight­ed
* 1 month to install and com­mis­sion

With this very ambi­tious time­line you are look­ing at 11 months to fin­ish the grant based works and get the fund­ing. Giv­en that the mon­ey must be spent in the next 15 months it seems like they are run­ning low on time. I know account­ing games can be played to bring the spend­ing for­ward but I assume the gov­ern­ment wouldn’t run the pro­gram plan­ning for this.

The cyn­ic in me sus­pects that the gov­ern­ment could not pro­vide any updates until too late, then qui­et­ly close it. I don’t know the details of how the remain­ing mon­ey would be divid­ed and returned but I believe all of the par­ties would be hap­py to pock­et the funds.

GAF

The Gee­long Advance­ment Fund (GAF) is a Vic­to­ri­an Gov­ern­ment ini­tia­tive run out of the Region­al Devel­op­ment Vic­to­ria depart­ment. GAF has $11M to “dri­ve jobs growth, increase skills and inno­va­tion and deliv­er eco­nom­ic and com­mu­ni­ty infra­struc­ture in Gee­long.”.

So far two rounds of fund­ing have been run, the most recent closed on the 30th of May 2014. The first round spent $3.65M on two projects, I can’t find details on the sec­ond round actu­al­ly being award­ed. It cer­tain­ly seems as if the fund has not been exhaust­ed but no fur­ther fund­ing rounds have been announced.

GGIF

The con­sis­tent­ly named Greater Gee­long Indus­try Fund (GGIF) is anoth­er Vic­to­ri­an Gov­ern­ment ini­tia­tive. Often lumped in with the GAF, togeth­er they are called the Gee­long Devel­op­ment Fund.

One round of fund­ing has been run and award­ed, there are ref­er­ences to IXL get­ting $180k for exam­ple. The fund seems to have dis­ap­peared though, links to it are dead, there are just lots of announce­ments on its cre­ation. The Depart­ment of State Devel­op­ment, Busi­ness and Inno­va­tion (DSDBI) now the Depart­ment of Eco­nom­ic Devel­op­ment, Jobs, Trans­port and Resources (DEDJTR?), which admin­is­ters the fund only men­tion it in old finan­cial reports.

The Depart­ment Annu­al Report (page 173) lists grant recip­i­ents and shows IXL get­ting $60k, not the $180k announced in the bud­get speech. There are six recip­i­ents list­ed for a total of $695k.

I don’t know the details of gov­ern­ment grant award­ing but it looks like the gov­ern­ment announced a $4M fund, award­ed $700k with lots of nice press releas­es all along the way and have since pock­et­ed the remain­ing $3.3M with­out any­one say­ing boo.

R&D Tax Concession

The R&D tax con­ces­sion is list­ed on the grant find­er, it isn’t a grant but worth men­tion­ing any­way.

This tax deduc­tion has been around for a while and was sig­nif­i­cant­ly reworked in 2011. The leg­is­la­tion is actu­al­ly one of the bet­ter ref­er­ences, the AusIn­dus­try web design­ers sim­ply point at the leg­is­la­tion (with­out links) when­ev­er you look for details such as who is eli­gi­ble. The ATO web­site also has good infor­ma­tion.

To sum­marise (my sim­pli­fied under­stand­ing):
* You must be a com­pa­ny doing R&D work
* You must pre-reg­is­ter for the tax con­ces­sion
* You receive a tax deduc­tion of 45% of your R&D expen­di­ture
* You must have deduc­tions of at least $20k on R&D (at least $45k expen­di­ture)

The tax con­ces­sion seems to be designed for estab­lished com­pa­nies not ear­ly phase star­tups such as myself. With­out pay­ing a salary I prob­a­bly won’t reach $45k, I am cer­tain­ly not plan­ning to spend that much. My expen­di­ture is also going to be split across two finan­cial years.

As a tax deduc­tion it is also far more use­ful for busi­ness­es that make a prof­it, which I don’t have, yet.

Optus-Innov8 Seed

This Optus/SingTel fund­ed “grant” looks like stan­dard VC seed fund­ing (mon­ey for equi­ty) that they have some­how got­ten list­ed on grant web­sites. It is the kind of decep­tive amoral manoeu­vre that VCs spe­cialise in, I am sur­prised more haven’t list­ed them­selves.

Industries for Today and Tomorrow

Indus­tries for Today and Tomor­row is a Vic­to­ri­an Gov­ern­ment pro­gram run out of the Region­al Devel­op­ment Vic­to­ria office. It is designed to assist medi­um to large busi­ness­es grow and increase employ­ment.

Technology Development Voucher

The Tech­nol­o­gy Devel­op­ment Vouch­er is a small grant up to $50k for small to medi­um sized tech­nol­o­gy based busi­ness­es. It is designed for dis­crete work with a sup­pli­er such as a design firm. I was hop­ing to use it to help fund the required prod­uct cer­ti­fi­ca­tions. How­ev­er the pro­gram was sus­pend­ed after the recent Vic­to­ri­an change of gov­ern­ment and there is no indi­ca­tion of if it will resume or be replaced.

EIP

The Entre­pre­neurs’ Infra­struc­ture Pro­gramme is a sub­stan­tial Fed­er­al busi­ness assis­tance pro­gram intro­duced in 2014. It replaces eight pre­vi­ous indus­try par­tic­i­pa­tion pro­grams and is designed to be a one stop shop for busi­ness sup­port and growth. A pri­vate grant con­sult­ing group pro­vides a sol­id sum­ma­ry.

The EIP has three branch­es which seem to oper­ate inde­pen­dent­ly.
* Busi­ness Man­age­ment — Breaks down into four offer­ings, par­tial­ly fund­ed con­sul­tant run eval­u­a­tions which can then lead to assis­tance with sup­ply chain, growth ser­vices or growth grants.
* Research Con­nec­tions — Link­ing busi­ness­es with uni­ver­si­ties and CRCs with fund­ing for the col­lab­o­ra­tion.
* Accel­er­at­ing Com­mer­cial­i­sa­tion — Assist­ing and fund­ing busi­ness­es to com­mer­cialise their con­cept.

Of the three the branch I am inter­est­ed in is Accel­er­at­ing Com­mer­cial­i­sa­tion. This has sev­er­al offer­ings, the port­fo­lio, com­mer­cial­i­sa­tion advis­ers, the expert net­work and grant fund­ing.

The port­fo­lio is a list of busi­ness­es who have applied, 554 so far. Not much more to it but we can run up some quick inter­est­ing stats, I have includ­ed some tables at the end of this sec­tion. In par­tic­u­lar the num­ber of reg­is­tered busi­ness­es rel­a­tive to pop­u­la­tion shows some sur­pris­ing growth areas.

The Com­mer­cial­i­sa­tion Advis­ers are a small group of indi­vid­u­als with pri­or senior expe­ri­ence in grow­ing com­pa­nies, most are either prac­tis­ing con­sul­tants or VCs. All port­fo­lio mem­bers are assigned an advi­sor to assist them with high lev­el advice, they also assist with the appli­ca­tion process. There is also an RFT process which hasn’t yet been com­plet­ed for com­mer­cial­i­sa­tion advis­ers, it isn’t clear how this relates to the exist­ing group.

The Expert Net­work is a larg­er group of expe­ri­enced advi­sors, either domain experts or indi­vid­u­als with expe­ri­ence grow­ing com­pa­nies. The list of experts is con­fi­den­tial, the com­mer­cial­i­sa­tion advis­er arranges the link between the par­tic­i­pant and the expert. Inter­est­ing­ly experts aren’t paid, which sug­gests that the com­mer­cial­i­sa­tion advis­er prob­a­bly is.

In addi­tion to join­ing the port­fo­lio an appli­cant can apply for grant fund­ing. This has a stricter assess­ment process and lim­i­ta­tions on what the grant mon­ey can be used for. All grant fund­ing must be matched.

I am con­sid­er­ing apply­ing to join the port­fo­lio, I don’t think apply­ing for fund­ing is like­ly to be suc­cess­ful or worth­while at this point. Assis­tance in nav­i­gat­ing the busi­ness world would be rather use­ful though.

Tech­nol­o­gy  
Man­u­fac­tur­ing, Engi­neer­ing & Design 228
Soft­ware & Web Design 185
Com­put­er Sys­tems & Hard­ware 72
Biotech­nol­o­gy 69
Mar­ket  
Health & Med­ical 122
Busi­ness & Com­mu­ni­ca­tions 93
Agri­cul­ture & Food 78
Ener­gy, Min­ing & Resources 69
Infra­struc­ture & Build­ing 54
Defence, Secu­ri­ty & Safe­ty 40
Enter­tain­ment, Tourism & Sport 31
Auto­mo­tive, Avi­a­tion, Marine & TCF 24
Edu­ca­tion & Train­ing 21
OEM 20
Tex­tiles, Cloth­ing & Footwear 2
Region Count Pop­u­la­tion (k) Count per 100k
QLD 150 4676 3.2
VIC 133 5769 2.3
NSW 131 7439 1.8
WA 68 2526 2.7
SA 38 1675 2.3
ACT 17 383 4.4
TAS 14 513 2.7
NT 3 242 1.2
Surf Coast 3 26 11.5
Greater Gee­long 1 222 0.5