Blanking female founders: Labor kills off grants program for women in startups

The federal government’s Boosting Female Founders (BFF) grant program was secretly killed off in the federal budget, with only two-thirds of the $52 million allocated spent.

The program’s end with $17 million still in the kitty was reportedly the result of an internal review by the federal Department of Industry, Science, and Resources (DISR) that decided the program had a “lack of measurable impact on the wider startup sector”.

The department did not define what it meant by the notion of funding women needing to support the sector more broadly.

There were three rounds of Boosting Female Founders Initiative (BFF), which began life in 2020 under the former Coalition government and was due to run for five years.

But way it operated has been fraught, and riddled with mistakes and delays that caused deep concern for the women who applied.

In mid 2021, DISR mistakenly told 1000 female founders they’d successfully made it through to the next stage of the grants process in round 2, only to send out apology emails a few hours later saying there had been an error.

SmartCompany’s Tegan Jones detailed the ongoing angst caused by the program’s delays in March this year.

The demise of the program following delays to round 3 came just days after the May budget, which offered no new initiatives for a local startup sector still waiting for federal Labor to act at grassroots level 27 months into its 3-year term.

A Freedom of Information Act application by InnovationAus unearthed Senate Estimates documents that revealed the federal government decided the BFF program would “wrap up early in view of its lack of measurable impact”.

Certainly there was no shortage of demand. Round 3 received nearly 700 applications for grants worth between $100,000 and $400,000 to help female-founded startups expand their business.

After the change of government in May 2022, the grants process had concluded stage two by July 2022, and decisions on the grant recipients were due by February 2023.

But Labor launched a review of existing funding, and despite the program receiving the all clear, the process dragged on for another 15 months amid a broader downturn in funding for the startup sector. Recipients were told late last year that they’d be notified in Janaury 2024, but that update again blew out by another four months.

In the end, 34 startups were told they’d receive $11.6 million in May 2024, two years after the process began and just 48 hours after the federal budget was handed down, revealing a $9.3 billion surplus, a second for Labor, which also handed over $466 million to US quantum computing firm PsiQuantum.

A notable detail to emerge in the Budget was that federal bureaucrats will spend $28 million over 10 years simply administering the money it’s giving to PsiQuantum, which last week struck a similar deal in the US, with similar promises, blindsiding the Australian government.

In the end, Labor will spend $35.2 million of $52.2 million BFF budget. Existing grant recipients will receive their promised funding.

But news of the program’s cancellation enraged startup advocate Anne-Marie Elias, who helped design the program as a senior policy adviser to the then minister and took to LinkedIn to say she “devastated” by its end.

“It’s totally heartbreaking – total lack of understanding of the ecosystem & the purpose of such a program,” she wrote.

“The whole point of these grants were to support women across regional and remote as well as urban – grant awardees are diverse and reflect the underfunded startups.”

Startup Daily contacted science and industry minister Ed Husic’s office for comment on the closure of Boosting Female Founders, but did not receive a response.

The killing off of this program for women founders follows the NSW government’s shelving of a $10 million venture fund to back female-founded startups in the state, modelled on LaunchVic’s highly successful Alice Anderson Fund.

In contrast, the $10 million Victorian sidecar fund has backed 36 startups founded or cofounded by women, attracting matching co-investment from VC funds. The latest was Nikki Tugano’s workplace talent management platform SeenCulture.

Meanwhile, it’s now six months since minister Husic and his department, were given the final recommendations of the Pathway to Diversity in STEM Review, chaired by Cicada Innovations boss Sally-Ann Williams.

In May, minister Husic implemented the first change in the wake of the report, ending the Women in STEM ambassador program, a former Coalition government initiative launched in 2018.

Husic said back in February that the government will “respond in due course”. The minister’s office has not responded to Startup Daily’s request for clarification on a time frame, once again leaving the tech sector waiting for a formal response from the government.