Adeo Ressi, founder of global start-up incubator Founder Institute, has told FairFax Media that Australia’s low-risk appetite is causing start-ups to receive unfair terms from accelerator programs and venture capital firms, the Sydney Morning Herald (SNH) reports.
Ressi, who is one of Silicon Valley’s prominent investors in early-stage technology, has warned that Australia is becoming notorious for its limited appetite for risk and hopes that when he visits the country later on this month it will help to stir up excitement from outside of the traditional start-up investor circles in the technology sector.
“In Australia you’re getting it wrong, and it will not only hurt your long-term returns but also the prospects of the country. I want to invigorate your investors to take start-ups seriously,” Ressi said.
The SNH reports that during Ressi’s visit to Australia he will be meeting with fund managers, individual investors across Melbourne and Sydney, and will also be speaking at the Unstoppables event in Sydney where he will be advising investors on how to move into the tech start-up sector, alongside Australian entrepreneur Julio De Laffitte.
The Founder Institute was founded by Ressi in 2009 and is based in Silicon Valley. The start-up incubator has operations in 105 countries and has helped launch over 1,550 companies, which have created over 15,000 new jobs. Ressi is also the managing director of $100m fund, Expansive Ventures.
According to Ressi, the limited risk appetite in Australia is even present in some the country’s start-up investment groups, which load terms in their favour when handling new companies.
“With a lot of Australian deals I’m familiar with, the terms used are unfair to the entrepreneurs and that hurts the trust between them and their investors, creating a more hostile and less productive environment,” he said.
The SNH reports that Ressi’s comments come just a week after several early-stage Australian funds and accelerators launched an open-source term sheet initiative designed to increase transparency and ethical dealings with technology companies.