AVCAL Submission to the Review of the National Innovation System

AVCAL Submission to the Review of the National Innovation System • • • • • • • Author: Dr. Katherine Woodthorpe Working Group: Comprised of various early-stage AVCAL board members, with representation from; GBS Venture Partners, Kestrel Capital, Lend Lease Ventures, Starfish Ventures and Technology Venture Partners Organisation: Australian Private Equity & Venture Capital Association Limited (AVCAL ) Type of organisation: Industry Association Address: Level 41 Gateway Building, 1 Macquarie Place, Sydney, NSW Email: katherine.woodthorpe@avcal.com.au Phone: +61 2 8243 7000 Declaration of Interest The Australian Private Equity & Venture Capital Association Limited (AVCAL) is the national association that represents the Private Equity and Venture Capital industry's participants, promotes the industry and encourages investment in growing business enterprises. Summary AVCAL is the voice of the Australian Venture Capital (VC) industry, with the great majority of VC funds as members. AVCAL has canvassed these VC members, through both a formal survey and from feedback gathered by VC Representatives on its Council, to prepare this submission. The foundation of this submission is the indisputable fact that VC underpins a significant proportion of innovation in Australia, particularly in enabling emerging companies to achieve sustainability. The VC industry, with its measured appetite for risk, is often the only substantial financing mechanism that early stage companies can access. Coupled with Government grants, VC investment is vital to national innovation. The continued growth of the VC industry is fundamental to the commercialisation of new innovative products within Australia. As seen in Appendix A, VC members of AVCAL have over $2.5 billion in funds under management. From these organisations alone, there have been well over 200 unique investments which have provided capital to a range of intellectual property ideas at different stages in their commercialisation life cycles. Yet the VC industry in Australia has not achieved the success of more mature counterparts in economies such as the US. The key challenges to national innovation identified by AVCAL include attracting talent, attracting capital, and assisting early stage companies through to viability. This submission provides a short list of recommendations to address these challenges, rather than give a broad-brush response to the seven deceptively simple questions posed by the Innovation Review Panel. The three most important recommendations are: 1. Retain and bolster the highly successful Commercial Ready and Commercial Ready Plus programs. These programs have played a critical role in assisting early stage companies through to viability. We note the emergence of Cleantech as a new sector; however, we believe it should be retained as a competitive program within the suite of Commercial Ready programs. 2. Change the time at which a tax event occurs on shares and options held by entrepreneurs and their employees to the time when actual capital gains are crystallised. We believe this will remove a major and long-standing financial disincentive to attracting talent to commercialise innovation. 3. Double the Government commitment to an individual licence within the Innovation Investment Fund (IIF) Program, even if this reduces the overall number of licenses. We believe this modification to the application of critical Government funds will enhance the performance of new VC operators to better support national innovation. The main body of this document provides further details behind each of these recommendations, under the major categories of Attracting Talent, Attracting Capital, and Assisting Early Stage Companies Through to Viability. Other secondary recommendations are also provided under each category. AVCAL firmly believes these recommendations will help shape an improved National Innovation System. We welcome the opportunity to discuss each recommendation and their potential benefits further with the Review Panel. 1 Innovation and the VC Sector AVCAL defines innovation as qualitative change in products and processes – it generates new products, or changes existing products, to create new performance characteristics. Sometimes the changes are sharp and radical; more often they are incremental. Either way, over the long run, the array of techniques available to society improves dramatically in performance and functionality with major effects on the quality of human life and on human welfare. Innovation matters. Innovation may lead to new companies, or companies expanding to implement or commercialise new ideas. At these stages in a company’s evolution, VC may be the only means by which they can achieve the necessary financing. The Innovation Map below is but one of many ways to illustrate the progress of an idea through to an innovation and into a sustainable enterprise. AVCAL has used it to identify the key intersects between our industry and the national innovation system. The map provides a focus on three key issues facing companies that are supported by VC: attracting skills and talent, be they entrepreneurs or employees; attracting capital to the investment class; and means of assisting early stage entities to achieve sustainability. 2 1. Attracting Talent Employees One of the key components of a successful early stage company that crosses the chasm into sustainability is the quality of its management team. In VC-backed companies these are usually people with a combination of technical and business skills who, ideally, have worked in the sector before, preferably overseas. Finding such skilled employees is a major headache for VCs and the companies they back. The pool of talent in Australia is very shallow and so companies are often looking to attract people from overseas, either migrants or Australian returnees. We often rely on lifestyle issues to attract talented people to Australia but that is not enough. We need to be on a level playing field in terms of key career opportunities and remuneration. Small, early stage companies, even with VC funding find it difficult to match salary expectations and therefore equity opportunities become a major component of a remuneration package. This is in line with overseas approaches to compensation. Recommendation 1: Establish a Government program to track Australian Diaspora, to assist early stage companies to locate skilled Australian expatriates. We believe that Austrade would be the appropriate Government organisation to oversee the program. Tax issue for immigrants/returnees A large number of migrants (temporary or permanent) or returnees come from the US. A few of the various tax issues which strongly deter them from becoming resident in Australia include: • If their retirement pension is held through an Individual Retirement Account (IRA) which in the US is a tax-sheltered vehicle much like Australian super, it is not considered as in the same way by the ATO and is fully taxed annually as if they are a brokerage account. • Capital gains complications can occur with assets held overseas by immigrants/returnees to Australia. VCs have had Senior Executives turn down positions with Australian companies because these inconsistencies are too expensive and complex to make it worth their while. So during these times of extreme skills shortages, the very best talent is deterred from coming or returning to Australia. Recommendation 2: Review tax and remuneration structures for migrants or returnees to ensure there is no disincentive to them coming to Australia. Employee Share Ownership Plan Issues Taxation of employees’ equity is a major and continuing problem for both attracting skilled employees and for incentivising entrepreneurs to take the risk of setting up a company and raising capital. For founders, a key problem is that a tax event occurs when they receive equity (equal to more than 5%) for services he or she provides to the company in relation to their employment. This is despite the fact that their asset is not realisable, hard to set a value on, the value cannot be captured by the founder and indeed that value may well go down to zero if the company does not succeed. To make matters worse, the initial asset value is taxed as income but, if the company fails, the asset becomes worthless. It is deemed a capital loss but cannot be reconciled with initial taxed income. This is a major disincentive for an academic with new IP to set up a spin-off 3 venture in which they have equity, only to be faced with a burdensome tax bill on uncrystallised assets. For an employee, it has been acknowledged that the current system governing the taxation of Employee Share Ownership Plans (ESOPs) has numerous problems and is in need of reform. The system is a major barrier to achieving many of the essential policy goals of ESOPs, and in the context of the VC industry, impedes its growth and efficient operation. Recommendation 3: Change the time at which at tax event occurs to when an actual capital gain is crystallised. 2. Attracting Capital Structure of Innovation Investment Funds (IIFs) The IIFs are far less attractive in 2008 than when they were originally put into place. At the time of the first round a $40m fund was a viable option, based on management fees received and the costs that needed to be covered. Ten years on this is no longer true and a viable fund is generally considered to be over $80m. There are two reasons, one is the number of investment staff that you can support on the management fees and the second is the need to be able to do follow-on funding in order not to be diluted out as an investee evolves. An average VC fund receives 2-2.5% per annum in management fees. For a 1:1 matched IIF fund of $40 million, this would represent $800,000 - $1,000,000 a year. This amount is no longer considered sufficient to pay staff, pay overheads, and pay for the due diligence, investment and investee management activities. In response to this IIF funds have gone on to raise additional private sector funding, which is allowed. The larger funds have gone on to create funds of $100 million. This provides management fees of $2 – 2.5 million per year. The Government contribution requires roughly 10% of profits be returned to the Government. The additional 90% of the profit is left to be distributed amongst the general and limited partners as the general partners determine. As the fund increases in size, the positive stimulus of the Governments contribution is significantly diluted. Additionally, these funds are taking longer to form, given the need to attract more private sector funding. While this is not restricted, it essentially removes the incentive effect the IIF program is supposed to provide for capital formation for early stage ventures. Recommendation 4: Double the Government commitment to an individual IIF licence. We believe this modification to the application of critical Government funds will enhance the performance of new VC operators to better support national innovation. Investment Vehicles for the VC Sector There are two Government initiatives to provide tax effective vehicles for investment into VC, the Venture Capital Limited Partnership (VCLP) and the Early Stage Venture Capital Limited Partnership (ESVCLP). Both have struggled to reach their expectations due to complications with their structures. There are structural issues with both the VCLP and ESVCLP which have resulted in a very low level of take up of both by VC investors. The former Government introduced these vehicles to improve investment in Australian VC. However, restrictions on both vehicles make them unable to fulfil their desired outcomes to their best potential. We would direct the review panel to the New Zealand Limited Partnership which we believe is much more user friendly to VC investors. ACVAL is concerned these advantages in the New Zealand vehicle may lead to members of the Australian VC and PE industry relocating their funds to the New Zealand vehicle, which has no restrictions on investment back into Australia. 4 Specific Issues with VCLP: A key issue with VCLPs, which should be rectified is the constraint on investing in ‘roll-ups’. For example the VCLP may invest in Company A which then wants to buy Company B to augment their business, but they cannot take an investment from the VCLP to do so. This doesn’t make business sense, as companies often will buy others to make a viable enterprise model with critical mass. Specific Issues with ESVCLP There are two key issues with the ESVCLP – forced divestment and the foreign activities restrictions. 1. Divestment: insisting that a fund divest an asset when it reaches $250m is artificial and problematic. Up to that point the asset attracts no capital gain. In order to preserve the intention of the legislation it should be possible to simply tax all gains after a $250m base. No complex structures would then be required to divest an asset between funds to comply. 2. Foreign investment: the issue with foreign investment restrictions is that many early stage companies move a significant part of their operations to the US or Europe. In order for the Australian VC to participate in further series of investment, they may need to do so outside the original vehicle because the company is no longer eligible to be considered an Australian enterprise. The alternatives are (a) get diluted out as further investment series proceed or (b) come up with an additional vehicle through which they can invest – complex, costly and ultimately a disincentive to investors. Recommendation 5: The VC industry would welcome the opportunity to provide consultation with the Government to overcome complications with the implementation of new (i.e. ESVCLP issues) policy and the effects of a changing environment on existing VC programs (i.e., IIF issues). Increasing of Superannuation Support As at June 2007, only 0.06% of superannuation funds under management were invested in Australian ‘early stage’ venture capital, representing 39% of funding to the sector. Australia is listed near the median of countries’ level of total commitment to VC. Compared to the leader, the USA, we are well behind. By level of total Gross Domestic Product (GDP), VC in the United States had 13.6 times more investment in the last two years compared to Australia. The industry needs to increase the level of investment from super funds but faces the struggle of proving returns from investments which have a long gestation period. Even large Australian VCs, with a substantial track record have had difficulty raising funds from superannuation funds. Recommendation 6: Assistance is needed in publicising the success of Australian VC investments. Greater profiling of investment returns is required to secure support from superannuation funds to invest in domestic VC, particularly against that of equivalent asset classes which have comparable levels of risk and return. 5 3. Assisting high growth innovation based firms through to viability Why Equity Investment and Governments Grants are both necessary Early stage firms need to access a number of sources and types of capital to achieve sustainability. Government grants for R&D are one of the most important sources of support for an early stage company. However, the Government expects (quite reasonably) that the company will source a supply of matching funds. Many of them do not have the resources or cash flow to match the grant funding. VC provides an important source of finance to ensure these companies can carry out their R&D projects through to commercialisation. The VC investment is into equity in the company and as such is dilutive for the entrepreneur. Coupling VC with Government grants increases the funding for an enterprise whilst reducing the dilution for the founder. The combination of grants and VC investment is therefore beneficial to entrepreneurs and is a powerful engine for assisting early stage companies through to sustainability. Government support programs There are a number of Government support programs that effectively assist early stage companies to grow to a sustainable stage. For VC fund managers the most useful of these are: Commercial Ready & Commercial Ready Plus The Commercial Ready program has been a stand-out success in fostering innovative young companies and AVCAL believes it should remain a competitive program across all sectors. The combination of Commercial Ready Grants with VC funds has played an important role in the success of many Australian technology firms. In our survey of AVCAL VC’s, Commercial Ready was seen as the most important Government program for investee organisations. Over 80% placed it in the top three of 15 different Government programs. AVCAL is also particularly supportive of the Commercial Ready Plus program, for smaller innovation grants of $50,000 to $250,000. We believe this targets a sector of the industry where the companies are very early stage and may be years away from a reliable revenue stream. In addition the ability of firms to apply for Commercial Ready Plus before they incorporate is a valuable feature of the program. An expansion of Commercial Ready Plus from $250,000 to $500,000 would be beneficial. Recommendation 7: Retain and expand funding for Commercial Ready and Commercial Ready Plus. Consider increasing Commercial Ready Plus range from $250,000 to $500,000. Area of Concern AVCAL understands that $50 million of funding has been allocated out of the Commercial Ready programs and designated to go to the Cleantech sector. Cleantech is an emerging and valid sector for innovation but AVCAL believes the Commercial Ready program should remain competitive across all eligible sectors. Cleantech should therefore be part of the established Commercial Ready program sectors and assessed competitively within the current framework. Based on interest levels, it might be useful to consider a separate committee to assess Cleantech applications. If the Government believes the Cleantech sector needs special treatment to seed the industry, then an additional $50 million should be provided to support this initiative in preference to carving funds out of the current allocation. Recommendation 8: Include Cleantech as a new competitive sector within Commercial Ready, possibly with its own Committee. 6 R&D Tax offset for small companies and the Premium tax concession The introduction of the offset for the tax concession for small companies has been a valuable benefit to small R&D focussed entities. One issue though is the cap on the offset of $1m of grouped up R&D expenditure. This has the effect of ensuring companies try to stay under the limit and do not increase their R&D as they might otherwise have done. One way to overcome this is to have the offset up to the first $1 million expenditure in a small loss-making company but any expenditure above that simply reverts to the standard tax concession through which tax losses would be accumulated. The 175% Premium tax concession for ongoing increased expenditure in R&D has been also been of value to early stage companies who are often growing their R&D expenditure year on year. Recommendation 9: Amend implementation of the cap to allow firms in tax loss to claim R&D expenditure over $1million once they are profitable, with the rebate itself continuing to be payable for expenditure up to $1million. Government procurement Government procurement has been demonstrated to be a powerful tool for growing local technology industries in countries such as the UK, USA, Israel, Singapore and Japan. In the USA programs such as SBIR and STTR provide assistance across multiple Government departments (11 in the case of SBIR and 5 in the case of STTR) to provide grant funding and access to qualifying research. The US DARPA program associated funding and interaction with the defence sector is particularly useful for companies servicing defence, electronics and energy related industries. Australia’s domestic market in a number of technology sectors is underpinned by Government and infrastructure based procurement. An inability to sell to one’s own Government and agencies is looked upon unfavourably overseas. Programs such as Partnerships for Development (which existed in the mid-‘90’s) have been very useful in fostering the growth of local industry and access to international markets by eligible companies. Recommendation 10: Review program options (by comparison with overseas best practice) for Government procurement support programs which would be applicable under the prevailing WTO environment. 7 Appendix A: AVCAL Australian Venture Capital Members VENTURE MEMBERS Accede Capital Allen & Buckeridge Pty Ltd ANU Connect Pty Ltd CHAMP Ventures Pty Limited Cleantech Ventures CM Capital GBS Venture Partners Innovation Capital Associates Pty Limited Kestrel Capital Pty Ltd Lend Lease Ventures Netus Pty Ltd Neo Technology Ventures Queensland BioCapital Fund SciVentures Investments Pty Ltd Southern Cross Venture Partners Pty Ltd Starfish Ventures Pty Ltd Technology Venture Partners Uniseed Management Pty Ltd Source: AVCAL analysis *Only ~3% of the FUM is classified as ‘early stage’ FUM (A$M) 90 280 30 667* 80 260 390 90 50 200 40 74 100 29 170 350 190 61 Investments by AVCAL Venture Capital Firms Company Name 4G Vaccines 5th Finger International 80-20 Software 90East Active Reactor Company Active Torque "Innovative step of the Investee Company" Developer of new vaccine candidates for the prophylactic and therapeutic treatment of breast cancer Mobile marketing technology creates and executes marketing campaigns on mobile consumer electronics devices Developer of software-based enterprise governance, risk management and compliance (GRC) solutions Managed security networks and services, provided services to federal government agencies Electronic device designed to continuously control the power supplied to High Intensity Discharge lamps Commercialising an engine management technology that has the potential to significantly reduce greenhouse gas and toxic emissions from motor vehicle engines Online advertising marketplace to monetise international traffic on premium publishing sites Designed and developing a novel, multidose inhaler drug delivery device for respiratory diseases Conversion of old Asian telco to digital services on wireless platform Novel carbohydrate technology applied to the development of new drugs Publisher of professional niche blog sites Developing a commercial ready biosensor platform Supplier of analytical testing services to the minerals, industrial, environmental and food sectors AdGent 007 Advent AGN International Alchemia Allure Media Ambri Amdel 8 Aqua Diagnostics Aqua-Sciences AquaSpy Group Aruspex Audinate Audio Nomad Aurema Austhink Authentic8 Avand Avipep bCODE Biocomm BioLayer Corporation BioPower Systems Bluefish Wireless Bluegum Group BT Imaging BTF Calibre Call Time Solutions Cap-XX Catapult Genetics CathRx Ceram Polymerik Cerylid Biosciences Chirogen Classic Solutions CNSBio Cohda Wireless Colloidal Dynamics Columna Combinomics Communicator Interactive Continence Control Systems (Colocare) Cool Energy Novel nanotechnology electrodes that uniquely permit fully quantitative, on-line analysis of organic contamination in water Non-invasive method of reducing the build up of deposits in the food processing industry Developed a range of next-generation water saving devices Specialist software suite for business intelligence Developing and implementing technology that allows for high quality, low latency media across an TCP/IP network Software technology which delivers location-triggered content on a PC, PDA, phone or other mobile device Server resource allocation software operating within operating system kernel Software graphically maps analytical thinking to improve arguments and reasoning Authentication software for smart card systems A leading Australian provider of business-critical Enterprise Content Management solutions Novel next generation antibody replacement technology for disease markers and therapeutic use Developed a unique mobile ticket scanning device and system to allow tickets and coupons to be sent to mobile phones Life sciences technology management and commercial development company Patented materials science technology applied to the development of medical diagnostic tests Biomimetic ocean energy conversion technologies Application of Bluetooth wireless technology Conversion of electronics manufacturing plants to contract electronics manufacturing service with total systems overhaul Imaging tools and software for solar cell design and manufacturing Development of precise microbiological controls Development of growth factor mimetics and inhibitors, applications for which include Parkinson's disease, arthritis, and cancer Design, implementation and support of multi-media contact centre and converged IP Telephony Solutions High-power, high-energy storage devices to make smaller, thinner and longer-running products such as mobile phones DNA testing for livestock industries Range of novel catheters to diagnose and treat heart arrythmias Developed new polymers which turn into ceramics for fire protection Developed new drug molecules from natural products Novel free radical chemistry synthetic route to prepare many chiral intermediates for use in pharmaceutical preparations Financial risk modelling applications for the insurance industry New therapies are developed by combining and repositioning marketed drugs and drugs in late stage clinical development Developed next generation mobile WiFi and WiMax enhancements Instruments measure nano-scale particle size and charge Developing the next generation of minimally invasive non-fusion spinal implants DNA sequencing technology (NOVOSEQ™) opening up previously unmapped regions of the genomes to DNA sequencing and analysis Interactive agency which specialises in providing organisations with mobile and web marketing solutions New faecal management device which substantially improves the way in which colostomates manage their stomas and their quality of life Developed a new cryogenic gas 'sweetening' technology which 9 Cryptopharma Dilithium Networks Distra Dspace Dtecht Dynamic Hearing Eastern Telecommunications EcoNova eKit Elanti Systems Emotiv Employment Services Holdings Engana EnGeneIC Enikos Enterix Entigen Epitactix eServGlobal Eurekster Execom Group Fiberom Fultec Semiconductor g2 Microsystems G2 Therapies Gekko Gelesis Genera Gentraks Genvax Glutagen Hardwear Hatchtech removes carbon dioxide and other contaminants Development of drugs for anti-inflammatory diseases with a focus on pulmonary fibrosis Novel transcoding technology applied to video content for online and mobile environments Software payments switch forms part of the core payments infrastructure used by banks, credit cards schemes and payments processors Development of high performance mobile satellite platforms to support high speed data to mobile satellite terminal devices Real time surveillance systems to automatically assess health insurance claims for anomalies before payment to control fraud Production of digital software for hearing aids Full service telco offering data and voice products to corporate and government Water recycling and waste water treatment Communications applications service provider (ASP) providing calling and unified messaging services to travellers The application of AI technology to allow dynamic traffic optimisation across a telecommunications MPLS network Peripheral device and system to control electronic games using brainwaves Provider of job network services Dynamic wavelength processor platform Developer of gene / drug delivery biotechnology Develops and supplies software services for next-generation multimedia applications based on the MPEG-21 standard Commericalised an FDA approved 'at home' kit to provide population screening for colorectal cancer Online bioinformatics aggregation website Developed novel approaches to lower cost compound semiconductor electronics fabrication for GaAs-based radio frequency electronics Specialised in integrated solutions to the global telecommunications Community powered search and advertising technology -- the SWICKI -- for large and small online publishers Database conversion software supplier Solid state optical memory enabling ultra-low cost, non-volatile highdensity ROM and RAM memory solutions Innovative electronic components designed to protect complex electronic circuits such as high speed communications interfaces Developed ultra-low power WiFi integrated circuits help track assets through enterprises and supply chains Biotechnology firm developing therapeutic monoclonal antibody treatments Mineral recovery equipment manufacturer Developing biomaterials and device solutions for treatment of obesity and other related conditions Innovative and clinically effective human molecular diagnostics with a focus on women's health Bioinformatics for race horses Developer of a melanoma vaccine technology Discoverer and developer of novel pharmaceutical products for the treatment of Gluten Intolerance and/or Coeliac Disease In Situ Laser Surfacing' technology which reduces the cost and time to repair of power station turbine blades Low-toxicity insecticides for controlling ectoparasitessuch as human head lice 10 Health Systems Exports Heard HEARD Systems Hepitope Hitwise Holly Connects’ Hydrexia Hypertec iCiX IGaVax Impedance Cardiology Systems ImpediMed Ingenero Integrated Silicon Design Intellection IntelliGuard inter-touch Lighthouse Technologies Looksmart Loyalty Magic ManageSoft Corporation Mantara Maxamine International Medi-Stream Medsaic Medtamic Mesaplexx Metastatix MicroForte Micromet MIG33 MIGfast Millenium IP Training content for health workers in China, based on Australian eLearning platform Novel use of acoustic signal detection and processing algorithms to provide real time and reliable pregnancy diagnosis for farm animals Signal detection algorithms to provide real time and reliable pregnancy diagnosis Novel DNA vaccine technology that promotes both humoral and cell mediated immune responses World-leading web analytics service provider, based on novel analyses of ISP web traffic Interactive voice response technology offers multi-tenancy, sophisticated reporting and speech recognition logging and call recording capabilities Metal hydride based systems to safely and simply store, transport and use hydrogen gas for industrial and fuel applications DRAM assembler & distributor Web based compliance information management system has digitised and networked numerous paper-constrained supply chains Research is targeting an efficacious vaccine for Respiratory Syncytial Virustechnology Helping diagnose and manage cardiac health with its bio-impedance based medical devices Medical devices diagnose and manage lymphedema, a common chronic illness of cancer survivors Integrator of clean energy solutions for delivery of power Developed RFID tagging systems based on proprietary integrated circuits Integrated solutions for the automated, quantitative evaluation of minerals, rocks and man-made materials Internet security solutions protect against Distributed Denial of Service (DDoS) attacks High speed internet access (wireless and fixed) to business travellers in hotels Developer of wavelength laser devices that offer new treatment options in the aesthetic medicine market Category based internet search engine Provider of customer relationship management solutions and a technology platform for managing and administering customer loyalty programs Software asset management and compliance solutions Content-based real-time message router Website analytics software Unique drug delivery technologies and devices focussed on ‘Air Stream Medication’ Commercialiser of “DotScan™”, uses antibody micro-arrays for the diagnosis of specific diseases by the identification of proteins Online aggregator of medical databases for specialties e.g. cardiac disease Cellular basestation filters based on High Temperature Superconductor technology to improve mobile network performance Developing new drugs for cancer and HIV Developer of technology and titles for Massively Multiplayer Online Games Development of irrigation software A cross-platform mobile VoIP, chat and social networking service Novel MIG welding tips having superior functional and speed performance over existing welding tips Designer of mass market wireless applications for developing countries 11 Mimetica Minelab Monitoring Division Mooler Mooter Media MuriGen Therapeutics Myriax NephroDynamics NetStar International Neuprotect Neuromonics Neurotide NewZoom NextGen Gaming NuKorc Oceanlinx Ofidium OPAL Therapeutics Optium Opto Global Holdings Osprey Medical Pargenex Pepfactants Peregrine Semiconductors Permission Corp Personal Audio Pharmaxis Phenomix Phytonova Piedmont Pharmaceuticals PolyVacc Prism Scaffold molecules mimic beta and gamma reverse turns which form the platform for new drug discoveries Manufacturer of metal detection products Optical network monitoring technology helps resolve multiple impairments in fibre networks A technology developer which assists publishers increase monetisation of online advertising Catalogue and matching of internet ads Mutagensis program has potential to lead to treatments for a wide range of diseases such as cancer, arthritis and epilepsy Fish stock sizing, feeding controls, and data visualisation products improve the efficiency and management of the fisheries and aquaculture industry Investigating the restoration of kidney function in acute renal failure Specialises in end-to-end network-enabled solutions and services Cardioprotectant and neuroprotectant small molecules aim to reduce tissue damage following a heart attack or stroke Developed a clinically proven, patented and FDA-approved solution to offer long-term significant relief from tinnitus Pain treatment drugs based on endomorphin Internet enabled vending machines provide a new low cost, channel of distribution for consumer goods Independent developer of games servicing the gambling and entertainment industry An Adelaide based manufacturer of synthetic closures for the wine industry Developing a wave energy converter for near shore applications Developed modulation technology for optical fibres resulting in better dispersion performance Investigation of a novel, simple and easy to administer vaccine for HIV Develops intelligent wavelength-selective switching (WSS) solutions for Reconfigurable Optical Add/Drop Multiplexer (ROADM) applications Developed a proven surge protection device for making cataract surgery safer using phaco-emulsification Developed novel catheter to treat contrast induced nephropathy (kidney damage) Novel and selective anti-inflammatory compounds with application to conditions such as colitis and arthritis Peptide surfactants which are 'switchable' and reusable with control and environmental advantages for industrial and consumer care applications Supplier of high speed, mixed signal integrated circuits for wireless and fibre optic communications Software for online panel management Developing a system for calibrating a virtual auditory space display to individual listeners Asthma therapy in late stage development for respiratory diseases Novel drug for diabetes Specialist plant breeder concentrates on the genetic improvement of high value woody plants Novel treatment for headlice on market internationally and new drug delivery technology for animals Development of a vaccine to prevent infection by the respirital syncytial virus A leading MIS software and solutions provider to the global graphic arts and printing industries with operations in New Zealand, Australia, UK and USA 12 Probiotic Health Protagonist Protel International (Altium) QRxPharma QS Semiconductor QuickComm Radical Razor International RBN ReachLocal Australia Red Sheriff Redfern Broadband Networks Redfern Photonics Renewed Fuels Resonance Health RIO RPO Satori Pharmaceuticals Security Domain Seek Communications SenoSano Sensory Networks Senviro Sienna Technologies SigNav Smart Digital Optics Smart Masonry Smart Storage Southrock Software Space-Time Research Spectrum Fire Discoverer of certain probiotics for use in human health applications such as Vitamin B12 supplementation and cholesterol lowering Improves the efficiency of discovering active molecules that modulate protein-protein interactions Electronic design automation Developed a patented combination opioid product that allows a significantly reduced amount of opioid to obtain the same pain relief Non-volatile semiconductor memory technology offers larger capacities, higher densities and better performance than current memory technologies Telecommunications expense management software helps large corporate and government organisations reduce the costs of their communications services Cardiovascular drugs to block the production of reactive oxygen species in blood vessels for stroke, hypertension and atherosclerosis Development of small electric motors for truck trailer landing legs Develops optical transport and switching platforms for the access/edge networks of telecommunications carriers worldwide Provides online marketing solutions for small and medium businesses Internet audience measurement Developer of broadband photonic networking products Incubator of novel photonic technologies Developing technology to process specific high volume waste streams in the paper manufacturing industry Developed and taken to market Ferriscan, a non-invasive test for measuring liver iron using magnetic resonance imaging Optical transmitters based on proprietary planar external cavity laser technology Volume manufacturing technology for optical waveguides based on a proprietary polymer technology A biopharmaceutical company developing new chemical entity drugs to treat protein ‘misfolding’ diseases such as Alzheimer's and Parkinson's disease Developed public key infrastructure (PKI) security products and services Online recruitment services Advancement in breast cancer patient management Developer of high performance hardware accelerated network security products Senviro manufactures low cost soil moisture sensors for use within the domestic garden care, commercial turf, agriculture and nursery markets Payment and bill presentment solutions for the financial services industry A GPS software and module developer, focusing on the femtocell and timing markets Smart Digital Optics optical fibre based electrical current measuring device helps monitor and manage high voltage power distribution Developed novel block system for fast wall assembly Hybrid battery combining a supercapacitor and a lead-acid battery in a one-unit cell as a cost effective/high performance solution Produces online education and training software through its eLearning technology platform Software solutions enable users to manipulate large and complex datasets via web-based interfaces Leading provider of fire protection services to non-residential construction market 13 Spinifex SpotOn Structured Data Systems Sunshine Heart Tantalus TeeleOstin Telesso Technologies Terratronics TGR BioSciences Thinksoftware threatMETRIX Threatmetrix Three Dots Thrombostat Tokai Pharmaceuticals Torson Group Travelcomau Tru-Test uiActive Universal Biosensors Vacquel VacTx VaST Systems Technology Velacor Vellis Knowledge Verva V-Fuel Viator Vigil Systems Vintela VisionBytes Viva Blu Vquence Windlab Systems Wine Preserva Wishlist Holdings Worldwide Coatings Drug development for the treatment of neuropathic pain based on a novel target Dashboard for personalising push online information Developed gaming software Developed novel aortic cuff to treat stage 3 heart disease Games development company Identified a gene that represents a novel parathyroid hormone that is a potential therapeutic for the treatment of Osteoporosis Seeking M&A or in-licensing opportunities in the medical device, therapeutics and/or biotech sectors Inventor of an algorithm permitting four wheel steering/four wheel drive vehicle control for zero turning circle vehicles Development of a neutricutical mouth wash to overcome mouth ulcers in chemotherapy patients Email management system Provider of anti-fraud protection to online businesses based on its real-time Reputation Service SaaS platform for online fraud detection in commerce applications based on unique device identification Developed workflow extensions for Microsoft Outlook Drugs that could displace aspirin in long-term prevention and treatment of cardiovascular disease Specialty pharmaceutical company focused on developing drugs for endocrine and paracrine based diseases and conditions Consumer online marketing solution based upon accurate human body model Online travel agency Specialist agritech solutions Mobile platform to syndicate and deliver content to mobile users Novel glucose biosensor and application of this technology to diagnosis of other analytes Delivering foreign antigens orally for vaccination, which is potentially safer, cheaper and more effective than current technology Vaccines which can be delivered by inhalation or injection Pioneer in solutions for embedded systems design Treatment for prostate cancer based on selenium derivatives; with new indications for the drug to fight Alzheimer's disease Developed patented software to offer online technical education Specialising in new treatments for metabolic disease by developing modulators to novel proprietary targets Vanadium Bromide Redox Flow battery, a grid-scale energy storage system Destination leisure travel product and technologies for the online travel industry Production of technology for professional driver training Provider of enterprise class solutions and services for integration and interoperability with mixed computing environments Archiving and retrieval of film/video Commercialising a water purification technology that negates the use of chemicals and reduces energy consumption Real time analytics for web-based video content The use of advance meteorological analysis and prediction tools to identify and design future wind energy sites Developed a unique low cost wine preservation technology E-commerce platform TAG' technology is an innovative new material that acts as one-way insulation 14 Wriota XBiosystems Xenome Xerocoat Xpertcorp Xumii New platform technology for modifying the properties of silicon enabling the transformation from one phase to another Commercialising a web based data management system for the life sciences industry Development of new drug candidates from novel peptide libraries Thin films of nano-porous silica used to create anti-scratch, antireflective and antifogging coatings for glass and plastic Developing and deploying Expertise Location and Management Solutions for matching queries with targeted expertise Social mobility environment to consolidate social networks to the mobile handset 15