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 manœuvre 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