Wan, V., Development of the Venture Capital Market in Australia, School of Accounting & Finance, University of Wollongong, Working Paper 7, 1988.
To remedy a shortage of venture capital for the development of emerging technology businesses, the Australian Government in 1984 initiated a Management and Investment Companies (MIC) Program. Under the Program, 11 MICs were licensed to raise venture capital from investors who are allowed to claim 100 per cent of their investments as a tax deduction. Apart from the 11 MICs, there are other venture capital organisations currently operating in Australia. This study identified a total of 47 venture capital organisations of different ownership structures and investment preferences. Undoubtedly, the MIC Program has played a catalytic role in the rapid development of this market to its current capital base of $353 million. However, there are still segments within the market where venture capital supply is deficient. Further, the recent stock market downturn has dampened the venture capital supply generally. The Government's initiatives in reviewing its policy framework at this juncture are crucial in order to remove the impediments and create a positive environment conducive to the long term development of the venture capital market in Australia.