WHERE HAS ALL THE CAPITAL GONE?

I am approached at least twice a week by companies and entrepreneurs trying to obtain capital. There is nothing new about this.

In 1994 I founded Corporation Builders because the lack of available venture capital was starving SME’s and technology companies. They could not develop. Most of them needed early stage equity. Hence the founding of enterpriseangels with the assistance of the Queensland Government in 1996. Since those times, Corporation Builders, with strong Australian Federal Government, State Governments, NZ Government and Singapore Government support, operated in all of those countries and states. The need for capital was universal and constrained the SME sector.

The 2000’s saw more capital flowing and more credit availability. Governments in all these countries supported the growth the venture capital sector.

That cycle stopped in 2009 and has not restarted. We are back to where we were in 1991. Private investors do not have the discretionary capital they once did, governments are tightening the seat belts apart from some headline projects like the NBN in Australia, and pension fund trustees are under increasing pressure not to approve investments in unlisted assets, although it is common practice in the United States. Hence Silicon Valley.

It is also true that many project proponents are woefully unprepared to raise capital. They can come back to Corporation Builders for some one-on-one coaching. No promises of capital, but at least it minimises the opportunity cost of valuable entrepreneurial time.

ABOUT DAVID MILLHOUSE:

An international entrepreneur based in Brisbane, with more than 30 years in venture capital and private equity internationally, David Millhouse is a specialist in venture financing and capitalisation. He is renowned for his management of high growth companies, many of which proceed to IPO and he has conducted business in the UK, Germany, Switzerland, USA, Canada, Singapore, Hong Kong, Australia and New Zealand. David is a scientist by original profession, with an MBA and LLM from Bond University in Australia.