Early Stage Venture Capital Limited Partnerships (ESVCLP)
Funding Providers
Department of Industry, Science and Resources
Location
Australia WideFunding Type
Cash grant G04621
Primary Category
Business and industryEligible to
- Businesses
Funding
Total pool: UndisclosedRound(s)
Ongoing
Purpose
Early Stage Venture Capital Limited Partnerships provides fund managers and investors with support to help stimulate early stage venture capital investments. Benefits include tax exemptions on an investor's share of a fund's income and tax gains.
Overview
The Early Stage Venture Capital Limited Partnership (ESVCLP) program aims to stimulate the early stage venture capital sector in Australia. The program:
- helps fund managers attract pooled capital, so they can raise new venture capital funds of between $10 million and $200 million to invest in innovative early stage businesses
- offers tax benefits to fund managers and investors
- connects investors with early stage businesses
- helps Australian businesses grow by receiving financial support and guidance from expert advisers
Fund managers can apply to Innovation and Science Australia to register a partnership as an ESVCLP.
The Department of Industry, Science, Energy and Resources and the Australian Taxation Office (ATO) jointly administer the program on behalf of the Australian Government.
How it works
An ESVCLP must be a new partnership rather than a restructured existing partnership.
Applicants must apply to Innovation and Science Australia's Innovation Investment Committee (the Committee) for registration under the Venture Capital Act 2002 (VCA).
The Committee will register a partnership as an ESVCLP if it meets certain eligibility criteria.
If registered, an ESVCLP can then make early stage venture capital investments in companies or unit trusts that are at the following stages of development:
- pre-seed
- seed
- startup
- early expansion
The investments must also meet other criteria and be held for a minimum of 12 months.
An ESVCLP must meet ongoing registration and reporting requirements under the VCA to maintain its registration.
Once registered both investors and fund managers can claim tax benefits. ESVCLP tax benefits differ for investors and fund managers.
Limitations
What are the eligibility criteria?
You can apply to register if you are:
- a new venture capital fund
- a limited partnership or an incorporated limited partnership
- established in Australia or a country that has a double tax agreement with Australia
You must have:
- a general partner (often also the fund manager) who is a resident of either Australia or a country that has a double tax agreement with Australia
- between $10 million and $200 million in committed capital (although a partnership that doesn't satisfy this requirement may be eligible for conditional registration)
To contribute more than 30% of the committed capital, an investor must be a:
- bank
- life insurance entity
- widely held super fund
- widely held foreign venture capital fund of funds
All other investors are not able to contribute more than 30% of the committed capital, without the approval of the Committee.
In addition, you must have a qualifying partnership agreement that:
- ensures the partnership remains in existence for between 5 and 15 years
- requires partners to contribute capital when required
- prohibits adding new partners except as provided for in the agreement
- prohibits increasing committed capital except as provided for in the agreement
- confers on the general partner the right to require partners to contribute their committed capital to the partnership
The partnership agreement must also include a plan that:
- sets out the partnership's intended investment activities
- shows that the investment activities focus on making eligible venture capital investments in early stage venture capital businesses
Your partnership must also have access to the skills and resources needed to implement its approved investment plan.
Applications / Guidelines
Contact Details
- Phone: 13 28 46
- Email: venturecapital@industry.gov.au
We take pride in ensuring our data is up to date and accurate, but you should not rely on our data alone. Please double-check important information on the funder's website before applying.