The Slingshot Venture Fund has been awarded unconditional Early–Stage Venture Capital Limited Partnership (ESVCLP) status by the Federal Government, which will see it exempt from the standard income and capital gains taxes for investors.
Slingshot, a $10 million fund that runs the Slingshot Accelerator program, is just one of 13 funds to have been given ESCVLP status by the Department of Industry since 2007. It is the third managed by Artesian Venture Partners, after BlueChilli and Sydney Angels Sidecar Fund, to be granted this status.
ESVCLP status, which aims to spur investment in the local startup sector, is open to venture capital funds of between $10 million to $100 million. Registration as an ESVCLP entitles a fund’s investors to receive a complete tax exemption on their share of the fund’s income, both revenue and capital, while also entitling a fund to ‘flow-through tax treatment’ – that is, it isn’t a taxing point.
Tim Heasley, COO of Artesian Venture Partners, welcomed the recognition and support from the Government.
“In partnership with companies like NRMA, a fund like the Slingshot Venture Fund could uncover a huge number of innovations that will benefit the Australian private sector and consumers alike,” he said.
Jumpstart, the latest accelerator program coordinated by Slingshot, was sponsored by the NRMA, giving the six participants the chance to have their products taken on board by the NRMA and marketed to its members. Two received seed investment upon graduating from the program, while a number are currently in investment negotiations with the NRMA.
Craig Lambert, co-founder of the Slingshot Accelerator, said the granting of ESVCLP status signifies that the Australian investment community and private sector are beginning to see the potential startups have.
“Organisations such as NRMA recognise the need to innovate in order to stay relevant, deliver new sources of revenue, hedge against technology and market change and discover new ways to get closer to customers and reduce costs. They have identified the startup community as a valuable partner in that journey,” he said.
“A key element in that process is investment capital not only at the initial stage but also as the startup gains momentum by providing follow on funding. Now with the government’s recognition of our ESVCLP status, we will be able to provide further funding opportunities to the sector.”
Image: Tim Heasley, Artesian Venture Partners.