Startup Funding:
How to Raise Capital in Australia
The Biggest Barrier to a Successful Startup is access to Cash
At Rimon Advisory, we help Australian founders understand the full landscape of startup funding and identify the smartest paths to raise capital. From government grants and angel investment to venture capital and crowdfunding, this guide outlines the main options for funding your startup in Australia and how to choose the right one for your business growth stage.
Need help turning your innovation into funding success?
Learn how the R&D Tax Incentive can help you access non-dilutive capital to grow faster.
How to choose the right type of startup finance for growth
The most valuable asset of any tech startup is its intellectual property (IP). The innovation being built and refined by a talented team of developers. But in the early stages, when revenue is limited and resources are tight, funding for startups becomes essential to support growth and retain key talent. Understanding the different types of startup funding in Australia is crucial for founders looking to scale efficiently. From bootstrapping and angel investment to venture capital, government grants, and other startup finance options, each funding avenue has its own advantages and challenges. This guide explores the best ways to secure funding for startups in Australia and build a strong financial foundation for long-term success.
Rimon’s top 5 avenues for raising startup finance
Bootstrap your startup
Bootstrapping is the most independent form of startup funding in Australia, allowing founders to build their business using personal savings, early revenue, or sweat equity instead of external investors. This approach gives complete control over decisions and avoids the pressure that often comes with outside funding. For many early-stage founders, bootstrapping is the first step in securing funding for startups before attracting larger investment or startup finance later on.
Pros
- No equity dilution
- Full control over business direction and decision-making
- Higher valuation potential for future startup investment rounds
- Builds ownership pride and long-term commitment
Cons
- Slower path to market growth
- Harder to attract top talent without available capital
- Limited cash flow may restrict product development and marketing
Attract the Right Angel Investor for Your Startup
Angel investors play a vital role in startup funding in Australia, providing early-stage capital to help new businesses scale before they become profitable. The best angels don’t just bring money. They contribute industry experience, valuable networks, and mentorship that can guide your business through its growth phase. Finding the right investor can be the difference between steady progress and rapid acceleration. Angel investor networks such as Sydney Angels and other Australian angel funds connect startups with experienced investors who actively support early-stage innovation, offering both capital and strategic guidance to help founders grow faster.
Tip: When pursuing startup investment in Australia, prioritise investors who understand your vision and bring long-term value beyond funding.
Pros
- Immediate cash flow to fund early operations
- Access to expert advice, mentorship, and strategic connections
- Opportunity to collaborate with other startups in the investor’s network
Cons
- Partial equity dilution
- Increased expectations and accountability to investors
Secure Venture Capital Funding for Your Startup
Venture capital is one of the most recognised forms of startup funding in Australia, particularly for high-growth tech companies. VC firms invest in startups with strong potential to scale, providing not just significant financial backing but also valuable mentorship, structure, and access to networks that help accelerate expansion. For many founders, securing venture capital is a major milestone in their startup finance journey.
Some of Australia’s best VCs are: Blackbird Ventures; Aitree Ventures; Square Peg Capital; Rampasand; Telstra Ventures; Carthona Capital; One Ventures and Reinventure Group.
Pros
- Access to substantial capital for rapid growth
- Increased brand credibility and visibility in the market
- Strategic support, guidance, and industry expertise
- Opportunities for follow-on startup investment from larger funds
Cons
- Equity dilution and shared decision-making
- Regular performance reporting and investor oversight
- Pressure to meet ambitious growth targets
Government grants
Government grants are one of the most powerful and accessible sources of startup funding in Australia. They’re non-dilutive (you don’t give up equity) and non-debt (you don’t need to repay the funds). At Rimon Advisory, this is where our expertise shines. We help startups access the most valuable government incentives available. Key government grants include:
The R&D Tax Incentive
The R&D Tax Incentive allows Australian startups to claim up to 43.5% cash back on eligible research and development activities.
It’s one of the most effective ways to generate cash flow while building your IP.
The Export Market Development Grant (EMDG)
Designed for startups scaling internationally, the EMDG offers up to 50% cash back on overseas marketing expenses including advertising, PR, and promotional activities.
Equity CrowdFunding
Equity crowdfunding enables startups to raise funds from a large number of small investors via online platforms such as Equitise or Birchal. It’s an increasingly popular way to secure startup investment in Australia, especially for early-stage businesses with a strong story and community following.
Pros
- Access to a wide investor base
- Creates public visibility and momentum
- Builds early brand advocates and community buy-in
Cons
- Significant marketing effort required
- Public failure risk if the campaign doesn’t meet its target
Use Debt Financing to Strengthen Your Startup’s Cash Flow
Debt financing for startups allows founders to access funding without giving up equity, a smart option for businesses with steady revenue or assets to secure a loan. This form of startup finance can help bridge cash flow gaps between grant payments or funding rounds, providing flexibility while maintaining ownership.
A popular option in startup funding Australia is R&D financing, where founders borrow against their expected R&D Tax Incentive refund to access funds sooner. Providers such as Radium Capital and Rocking Horse specialise in this type of startup financing, helping businesses maintain momentum while waiting for grant disbursements.
Pros
- Retain full ownership and control
- Immediate access to working capital
- Ideal for bridging cash flow between grants and funding rounds
Cons
- Repayment obligations and interest costs
- May require personal or business security
How Do Government Grants Work?
There are two main types of grants available to startups in Australia:
Competitive Grants
These grants are assessed against other applicants with funding typically awarded to the strongest submissions.
Eligibility-Based Grants
These grants, such as the R&D Tax Incentive and Export Market Development Grant (EMDG) are based on whether your business meets specific criteria. If eligible, your business will likely receive the funds, making these programs highly reliable sources of startup finance.
Advantages of Using Government Grants
Government grants can be a game-changer for early-stage businesses. They help startups maintain ownership, attract investors, and build stability while scaling.
Key benefits include:
- Immediate cash injection
- Increased investor confidence
- Extended runway for growth
- No equity dilution or debt
- Sustainable cash flow through recurring eligibility
Ready to Fund Your Startup’s Next Stage of Growth?
Smart founders know that building a successful startup isn’t just about innovation, it’s about strategy. The R&D Tax Incentive is a powerful tool to accelerate your growth, extend your runway, and fuel your innovation without giving away equity.
Our experts specialise in helping startups like yours unlock the benefits of the R&D Tax Incentive. Let us guide you in accessing this valuable funding to drive your business forward.