With all the furore surrounding ICOs and token-based crowdfunding nowadays, it can be easy to miss one of the best forms of funding available for Australian blockchain entrepreneurs, the R&D Tax Incentive.
Blockchain is a truly revolutionary combination of technologies. A blockchain is an auditable growing list of transactions that is not controlled by a central trusted authority. Transactions in the blockchain cannot be corrupted or retroactively altered in any way, and the blockchain does not have a single point of failure.
The Australian government’s generous R&D Tax Incentive program reimburses up to 43.5% of the cost of eligible R&D undertaken in Australia.
Simply speaking, the government’s three criteria for a ‘Core R&D Activity’ are:
1. New knowledge
But does blockchain development tick these boxes?
Let’s examine 3 blockchain development categories to see how they might fit into the R&D Tax Incentive:
Building a standard token on top of an existing blockchain
An example of this would be implementing a standard cryptocurrency on the Ethereum blockchain using the ERC20 standard.
It would be unlikely that this type of development alone would qualify as an eligible Core R&D Activity. There is no real creation of New Knowledge as the token standard is available in the public sphere. There is also likely to be little to no experimentation involved. The most obvious disqualification, however, is that there is no uncertainty involved for a competent professional in the field.
Building a decentralised application on top of a blockchain
An example of this would be building an application that acts as a trusted document notary on top of the Ethereum blockchain (like the popular Nottar.io Dapp created by Daniel Murmelstein).
Whether this type of development is eligible as a Core R&D Activity is highly dependent on the specifics of the application in question. For more complex projects, there will likely be experimentation, and there is definitely room for generating new knowledge in the emerging and exciting blockchain environment. There is also scope for uncertainty from the outset even for competent professionals in the field.
Building a new consensus protocol
An example of this would be building a new resilience-optimal Byzantine consensus blockchain from scratch (like the Red Belly Blockchain being developed in conjunction with Sydney University).
It is almost certain that this type of development would be eligible as a Core R&D Activity. New knowledge is undoubtedly being generated as part of an iterative process of experimentation . Additionally, even for top professionals uncertainty would exist from the outset. Due to the deep complexity of developing a provably robust consensus protocol, it would be very difficult to know or determine the outcome in advance on the basis of any current knowledge, information or experience.
To find out more information on qualifying and claiming the R&D Tax Incentive, get in contact with us at firstname.lastname@example.org .
David Kofsky is a Senior Technical Business Analyst at Rimon Advisory
As the innovation capital of the world, Silicon Valley has given birth to some of the world’s most successful start-ups. Organisations that have grown to be the big brands infiltrating every aspect of our lives – Netflix, Facebook, Apple, eBay, among them. There are many more.
It makes you wonder, is there something in the water?
Do the Silicon Valley success stories all have a tried and tested formula?
What do these brands share? Aside from making us all wish we’d been the ones who thought of them first.
While Australia has a fledging start-up culture, the fact remains that most ‘unicorns’, that is start-ups whose value exceeds $1billion, are born in the US and Israel.
It typically requires a magic mix of creativity, bravery, innovation and substantial financial backing to make it past the first 18 months of business, let alone reach the nirvana of start-up world – an exit.
The CBI Global Tech Exits Report shows that half of last year’s tech exits were in the US. Australia came in at seventh place. We’re likely to see a continued upward trend locally as the start-up sector matures. In three to four years, we’re sure to see a steep increase in funding numbers – both from the government and private investors.
Do companies looking for an exit in the next couple of years need to follow the money and move to the Valley? The answer is no.
Prominent entrepreneur and CEO of Melbourne start-up Nitro, Sam Chandler, has been a vocal advocate for the Aussie start-up sector. He recognises that access to venture capital is the main barrier to further growth. While there are several measures in place to support new businesses – the R&D tax incentive being just one of them – the truth is US investors still have the deepest pockets.
One of our local clients who successfully made the transition, RangeMe, highlights the ease at which start-ups can raise capital from major venture firms in the US. On the flipside, given the rich pool of talent in the Valley area, there’s also stronger competition.
It requires a much more creative and succinct way of pitching. So say “adios” to long and tedious investment docs and come armed with a 10-page PowerPoint.
This streamlined approach gives investors working with early-stage companies greater clarity. Does the world need this product and will it scale? It also gives them a stronger sense of the ‘gut feeling’ they have towards the company – which to most is the ‘magic formula’ they use to pick winners.
Due diligence on profit, liabilities, contingencies and a business plan follow as start-ups grow and raise larger rounds Assessing early stage deal flow is a mix between an art and a science and selecting winning teams and pitches is a key component.
As RangeMe and other businesses have observed, being an Australian start-up in the US market comes with many perks. These include dual citizenship, which allows you to double dip on the benefits of being an Australian business in a foreign country – like retaining the R&D tax incentive. Although it can be a complicated process, partnering with an R&D expert to structure this properly will give you an extra two to three months’ runway when raising capital. That’s an incredible bonus.
Understanding of the Australian market is useful to your company, but is likely not seen as a huge benefit by your investors. At least not yet. That’s not to say Australia is insignificant due to the size of its population. Just look at Israel, a small country with a strong reputation in the global start-up community.
Australia is developing a name in the start-up sector because of recent activity in the market. However, until we have some more winners under our belt, the Valley will continue to consider Australia up and coming rather than a mature player.
If your goal is to create a unicorn, regardless of where you are, there are three key things you need to consider:Am I scalable?
Ultimately, there’s benefits on either side of the coin. Depending on your industry, stage of growth and business challenges, you’ll need to consider carefully how to use time in Silicon Valley to your advantage.
If you invested in an Early Stage Innovation company (ESIC) during FY17, you may be eligible to receive tax incentives. These benefits aim to reward ‘angel’ investment in innovation companies, providing eligible investors with:
· A non-refundable carry forward tax offset of 20% of the qualified investment amount (Capped at $200,000 per investment per annum)
· Modified Capital Gains Tax treatment, whereby capital gains may be disregarded if the shares are continuously held for a minimum of 12 months and less than 10 years
· Early stage investor tax offsets can carry forward into future income years
However, in order to receive these tax benefits, all investments within FY17 must be reported to the Australian Tax Office by the 31 July 2017.
What you need to know as an ESIC:
Investors are able to claim the ESIC tax incentives as long as the company qualifies as an Early Stage Innovation Company immediately after the new shares are issued to the investors. In order to qualify, a company must satisfy:
· The Early Stage Test and
· Either of:
a. The 100 point innovation test or
b. The principles based innovation test
If the company qualifies as an ESIC, the company must report all of their investor’s qualifying investment during the financial year . In order to do so, the ESIC will require the investor details (name, ABN, address and details of share issue). The reporting of this information can be undertaken online here .
The ESIC is required to report the information of investment by 31 July each year. Reporting of this information can be done electronically, and is available on the Business Portal by logging on and selecting ‘Online Forms’ in the left hand menu. It is also available on the Tax Agents Portal under ‘Client Forms’ in the left hand menu.
What you need to know as an investor:
In order to qualify as an early stage investor, all investments must have been for the purchasing of new shares in a company issued on or after 1 July 2016. In order to qualify as an investor in an ESIC:
· As the onus is on the investor to prove the company qualifies as an ESIC, the investor must keep detailed records outlining their entitlement to the ESIC tax incentives, including documentation of the amount and time of investment
· The investor should ensure that the company has properly reported the qualifying investment to the ATO
· Should the company qualify as an ESIC, the investor’s accountant must include the documentation of investment in the tax return for FY17 in order to receive the benefit
Following the ESIC’s submission of the form, the ATO will assess the investor’s qualification for these tax incentives. It is important for the investors to also lodge their tax return as soon as possible in order to demonstrate their entitlement for the early stage investor tax offset.
For more details, please look at the following ATO page .
As published in Australian Anthill
It’s no secret Silicon Valley is #1 in the start-up city stakes.
After all, there are streets in the city for different staged start-ups, 3rd Street is where Series A players play, Market Street Series D… and so on.
Start-ups flow in to The Valley like honey from a bee hive. And they work just as hard as the bees that make the honey!
The question that is all too often asked is this – does an Australian start-up need to move to The Valley to be successful?
Having just returned myself from a recent trip, where I met start-ups and investors, we discussed this question with one of our clients, RangeMe , a client with whom we’ve worked together on for the R&D Tax Incentive.
RangeMe successfully transitioned to The Valley, raised capital and then successfully exited to a group called ECRM. They did this all within about two years of touching down in San Francisco.
A very important point to consider is sheer market size.
The new Census data released this week puts the current Australian population at around 23.5 million, while the same stat for America is a staggering circa 320 million.
What does this tell you?
Well, if your dream or goal is to create a Unicorn, or at least a start-up valued in the 100s of millions, then you must be able to penetrate foreign markets.
RangeMe articulated the benefits of having started off and grown (to a respectable size) in Australia:
But considering if, and when to move, is a tough decision. You will have many factors to consider. The industry your start-up is in, your stage of growth and whether you want to be overseas.
What to know about Silicon Valley
From our discussion with RangeMe, and from my own observations, there are 10 tips and benefits of moving to The Valley:
1. Easier to commercialise and grow in a big market geared for tech start-ups
2. Raising funds is easier: valuations are higher and there are many VCs looking for opportunities
3. Retaining the Australian R&D Tax Incentive can be done and is imperative: the incentive ensured RangeMe had an extra two to three months’ runway when raising capital, an unbelievable advantage but this should be structured properly with an expert
4. Technology start-ups are an industry in San Francisco: a good start-up can plug into the system and doors will open-up
5. Americans want to invest in an American entity: a flip up will be required between Australia and US entities
6. Shareholder’s Agreements are different in the US: there can be up to seven parts in the US but one main part in Australia
7. Understand San Francisco start-up lingo and terminology to be taken seriously
8. Only founders must raise capital – don’t take your lawyers to capital raising meetings
9. San Francisco investors only want to see a 10-page PowerPoint, don’t do investment docs: you will have 30 – 45 mins to pitch (unless you have entered a pitch contest)
10. When it gets down to negotiating a potential investment, get good tech lawyers to represent you (pay for this): they will understand if the investment terms are founder friendly or not
It’s very apparent that the decision to move or not is different for each founder and company. But to become a serious technology success story, start-ups need to be able to scale and penetrate the world’s biggest markets.
This article originally appeared in The Australian
Melbourne-based social media intelligence start-up PoweredLocal has closed a $500,000 raise, adding some big names to its list of backers, including Salta Group’s David Tarascio and Netspace founder Stuart Marburg, as well as lead investors Rimon Investments.
Mr Tarascio is the son of property magnate and BRW rich lister Sam Tarascio and Mr Marburg appeared on the BRW young rich list in 2013, having founded and then sold Netspace to iiNet for $40 million in 2010.
Rimon Investments, which led the raise, is investing in PoweredLocal for the first time. Rimon’s start-up investments, focused on Melbourne, are now being spearheaded by Dimension Data’s Steve Nola.
Other first-time investors include Avalanche Technology Group boss Peter Cameron, who founded AVG Antivirus, and prolific angel investor Adrian Stone, founder of AngelCube.
David Engel, general manager of Doshii, has also participated. Doshii is a payments start-up backed by Westpac’s Reinventure arm.
PoweredLocal has received a follow-on investment from Adam Clarke, former managing director of Open Table.
The start-up’s CEO, Michael Jankie, told The Australian the funds would be used to accelerate the company’s growth, and said it was already profitable.
“We could’ve funded the new stage of the business through our existing revenue” Mr Jankie said. “What we wanted was a group of smart, well-connected supporters that understood our business and could lend their expertise to prepare us for explosive growth. That’s what we’ve got.
“For me and my co-founder Gary (Tramer) it was a bit strange, we actually said as founders it’s lonely at the top, and we wanted more outside smarts. ”
Mr Jankie said his business model had expanded somewhat from being a WiFi provider for cafes and other bricks and mortar businesses to also providing data analysis and word-of-mouth referrals for businesses.
“The real opportunity here is not 100,000 customers paying 50 bucks a month, but we think there’s much more to it,” Mr Jankie said.
By David Swan
As published in Inside Small Business
The End of Financial Year (EOFY) is a time to get our ducks in a row and dot those Is and cross those Ts. In most, cases this would have to do with getting your taxes in order. Let’s try to apply this discipline to a more “fun” aspect of EOFY figures – getting some cash back from the government. The most popular government grants or incentives are the R&D Tax Incentive and EMDG (Export Market Development Grant).
Each of these offer eligible Australian businesses generous cash back opportunities.
To optimise your ability to get this cash back, a business needs to be aware of some make or break tips before EOFY.
We have compiled a list of some things to look through before the EoFY in order to put your company in the best position.
R&D Tax Incentive tips
1. Payments to associates
Since payments to Associates can only be claimed if they are actually paid, make sure that all these are paid by 30 June 2017. This would include for example salaries to founders or shareholders.
2. Record keeping
Good record keeping is essential for substantiating your claim. Go through your records and make sure everything is up to date and well organised. Not only your financial records should be in order but also the technical records to evidence the R&D work that you have undertaken.
3. Connected/affiliated entities
Make sure contracts and payments are completed with your connected or affiliated entities.
Super cannot be claimed as a tax deduction unless it was paid by 30 June 2017.
5. Overseas R&D
You cannot claim R&D activities undertaken overseas unless you have an Overseas Finding. An overseas finding needs to be submitted to AusIndustry before 30 June 2017 for any work you wish to claim for the FY17 year.
6. Pooled assets
Depreciation on pooled assets cannot be notionally deducted for R&D purposes. Consider depreciating R&D assets in their own category.
7. Aggregate turnover
If an entity has an aggregate turnover of more than $20m, then it does not qualify for the 43.5 per cent refundable tax offset, instead it qualifies for a 38.5 per cent non-refundable offset. The Aggregate Turnover is calculated as the annual turnover of the R&D entity for the income year plus the annual turnover of any entity that is connected or affiliated with the R&D entity, for that part of the income year that the entity is connected with you.
1. Cash accounting
EMDG works strictly on a cash basis, meaning that you can only claim amounts that were actually paid by 30 June 2017. So, make sure that anything you want to claim is paid before the end of the month.
Make sure any expenses paid for by employees of the company on behalf of the company have been reimbursed.
Make sure your contracts with overseas reps and marketing consultants are clear and signed. Their duties need to be clearly articulated in the contracts and they should have records of the work they did for you.
4. Internal company transactions
If you have multiple companies, it is essential that contracts and flow of money between entities is clear and intercompany transactions are done before June 30, 2017.
Remember – all revenue and expenditure needs to be taken up by the Australian entity making the claim.
There was a buzz in the air as we drove past some of the biggest companies in the world on 6 lane wide highways. We had arrived in San Francisco and were all ready to be engrossed in the vibrant startup culture that it had to offer.
We soon realized that we were starving, and decided that we all needed a boost to deal with the time difference and get through the day. After stuffing down an average tasting coffee and a bagel with “lox”, we drove to the famous Stanford University. We were quickly impressed by the world-class facilities present, and enjoyed the bike-riding student culture. It was fitting that the beginning of our trip, in which we aimed to learn from the startup-culture of Silicon Valley, had its first stop at the university where so many notable alumni and entrepreneurs had emerged, including Larry Page (Founder of Google) and Elon Musk (world-famous inventor).
In the afternoon, we had our anticipated meeting with our client RangeMe, an Australian startup that transitioned to San Francisco while maintaining their Research and Development processes domestically. Hearing personally from the founders of RangeMe, who were already a client before a successful transitioning overseas, was important in gaining insight into the differences between the still maturing startup culture of Australia against the mature and sophisticated startup industry in San Francisco. The ease at which startups can raise and generate capital from major Venture Capitalists was intriguing, with many capital raising rounds enticing investors to pour their money into companies across a variety of sectors. It was clear that the overall quality of talent helps to build the competitiveness of every startup within the Silicon Valley region, and sets an example for the Australian market to try and replicate.
We finished off our day with a walk through “downtown San Francisco” (please read in an American accent), a tasty dinner in China town, a walk by AT&T Stadium (home of the SF Giants, of which we are all now big fans), and a relaxing time in the Jacuzzi at our 5-star house.
Day 2 started with an interesting experience at a Silicon Valley Startup Fair. Immersing in the startup culture was key to gaining the most from our time away, and we quickly established strong connections and networked with some of the top talented entrepreneurs in the area. A unique beer-manufacturing machine caught my eye, as well as other education-based software development projects.
In the afternoon, we attended a Pitch Day at Founders Space, the number one accelerator for overseas startups as rated by Forbes. Each startup had their CEO pitch their business for approximately 5 minutes, explaining the need of the product, their uniqueness and the amount and aim for the funds being raised. Attending as investors of a fund gave us a high level of credibility amongst the startups, with many quickly approaching us to pitch their ideas. Impressive startups included Equobot, a news filtering app that gives advice to stock investors based off information in the market, as well as Spryfit, a money-making incentive app for exercise-enthusiasts. What was very interested was the way in which the CEOs presented themselves while pitching. Not one suit was seen. Coming from Australia, where outward presentation is key for any person to be taken seriously, seeing people pitch in jeans and a t-shirt was interesting.
On day 3, we had the highly anticipated meeting with one of the most successful early stage venture funds and seed accelerators in the world, 500 Startups. We discussed the buying and investing side of the startup market, gaining clarity over successful and effective investment processes, the way in which the company guides their startups to raise capital, and how to become a global, billion-dollar company. Easier said than done. However, it was evident how much we gained for the experience of learning from a knowledgeable partner at a successful venture capital firm.
Our next stop was Google, something we were all looking forward to. We all expected a massive skyscraper that could be seen from miles (because American’s don’t use kilometres) away. However, what we saw was a massive suburb with Google buildings spread all around. It was easy to see how they had become so successful. In a culture of bike-riding, innovation and casual dressing, it was clear to see that everyone in Google is encouraged to attempt the impossible, to try and grow and take things to the next step. Such an environment can only be positive.
After an afternoon of shopping (which was an afternoon too long for me), we attended an interesting talk from “Growth Hacker” Sean Ellis who spoke about driving sustainable growth within startups. Key takeaways include the importance of focusing on high leverage goals to improve sustainable growth, aiming to understand the value added for customers to ensure retained growth, as well as the necessity to have a high level of velocity of testing and experimentation to drive innovation and development of processes and products.
As Friday was our day off, we decided to do some exploring around town. We enjoyed a great tour around AT&T stadium, and basked in the beautiful weather and views of the Golden Gate Bridge and San Francisco Bay area.
We wrapped up our trip in the US by spending an afternoon in LA, driving through Beverley Hills, seeing the famous Hollywood sign (from a vast distance), as well as seeing the “Walk of Fame” and enjoying a delicious meal together at a Japanese restaurant.
Although boarding the plane was upsetting as our trip was coming to a close, we were all alive with new ideas and opportunities for when we get back. The future is bright.
This article originally appeared in the Financial Review.
Chief executive of the Australian arm of global technology services giant Dimension Data Steve Nola will turn his eye towards investment opportunities in the local tech startup scene, joining investment arm of Rimon Advisory as a non-executive board member.
Mr Nola will continue in his role at Dimension Data, but will help Rimon identify new investments, which generally start at the seed round, before progressing to the second stage follow-on rounds.
Rimon Advisory has operated for about five years, helping entrepreneurs plan long-term growth and advising on how to maximise available grants and tax incentives. It opened up a venture capital arm two years ago, enabling it to back some of the companies it was working with and then participate in subsequent rounds.
So far it has publicly disclosed investments in three start-ups; logistics technology provider Premonition, transport and airport connection platform Jayride and online concierge service Amazing Co. However it has also agreed investments in two further start-ups; foreign exchange platform Psyquation and social media intelligence firm PoweredLocal.
Mr Nola said the new role would benefit his existing employers at Dimension Data, giving greater insight into the disruptive small players that could be future partners or competitors to reckon with down the track.
He said he had long harboured a passion for the disruptive innovation happening in the startup scene and felt Rimon had hooked into a good model in mixing an existing advisory firm with investment.
"In my 30 years at Dimension Data I have seen a lot of customers with fantastic ideas that have never been given the opportunity to really flourish and take things to the next step," Mr Nola said.
"I want to impart some of the skills and knowledge I have picked up on to smaller start-up organisations ... If you are going to invest in something early stage you want to be able to give it more than just dollars in terms of capability to go with it."
Rimon Advisory co-founder and managing director Lior Stein said the company's advisory business provided it with an excellent vetting opportunity for potential investments, and that the company was not looking for companies operating in any particular sector. He said the firm looked for the basics of a strong leadership team, a scalable product and a large (preferably global) addressable market.
"We are looking to invest in technology that we think is interesting and that we can have a relationship with the team and have fun in the journey," he said.
"Every team we have invested in, we really enjoy spending time with them."
Mr Stein and Mr Nola both said they believe there are great opportunities for Australian entrepreneurs to think big, while remaining at home, however Mr Stein expressed concern that the prevailing political discourse around innovation had taken a turn for the worse.
He said that while the recent abolition of 457 skilled migration visas and rumoured negative changes to R&D tax incentives were understandable from a political perspective, they sent the wrong message internationally about Australia's standing in the global technology ecosystem.
"I think the government gives mixed messages ... When the Innovation Statement came out it was very positive, but then the R&D tax incentive was reduced, and there has been regular talk about changes that may or may not come, which creates nerves and stress," Mr Stein said.
"The 457 visa changes were not helpful, when you are building a global tech economy and you want to compare yourself to the likes of Silicon Valley and Israel ... they are open to the world.
"There needs to be a better balance
between wanting to take care of your own, which is important, and also
showing a message to the rest of the world that we are actually a big
By Paul Smith
When the government budget is released, there is always one constant: anxiety and confusion. Amid the deciphering of the ‘millions and billions’ of new complexly named government initiatives, most households and businesses end up asking the same two questions:
What does any of this mean, and how does this affect me?
As an innovator, start-up or entrepreneur, here is what you need to know about the $29.4 billion budget deficit for 2017-18:
The R&D Tax Incentive, which focuses on encouraging startups and established businesses to invest in new innovations, has largely remained the same with the following characteristics:
INCREASED ADVANCED MANUFACTURING FUND
Importantly, new funding has also been dedicated to growing the booming technology startup space, with $100 million being allocated to create an Advanced Manufacturing Fund . The new fund aims to stimulate the manufacturing sector to embrace new technologies, boost innovation and employment in a transitioning economy, as well as investing in emerging engineers and scientists.
EXPORT MARKET DEVELOPMENT GRANT (EMDG)
The Export Market Development Grant provides substantial support to small and medium sized businesses, reimbursing up to 50% of eligible export promotion expenses relating to overseas representatives, marketing consultants, marketing visits, free samples, Intellectual Property registration, trade fairs and seminars and promotional literature and advertising. Austrade will continue to administer the Grant, with eligibility requirements remaining the same for 2017-18, including:
The commitment of the government to EMDG is evident, with $137.9 million being dedicated to the success of the initiative.
OPENING CROWD-SOURCED EQUITY FUNDING TO PROPRIETARY COMPANIES
The new budget will introduce new financial services regulations, particularly affecting the banking sector, with the aim of motivating the Fin-tech industry to produce new and innovative products and services. These regulations will enable businesses to test their innovations in the market within a license, provide holistic financial advice, issue large amounts of consumer credit, and reduce the number of Australians taking their skills offshore.
Moreover, in line with the introduction of these new financial services regulations, the government have also reduced red-tape involved in capital raising for startups. The new budget has included legislation to open Crowd-Sourced Equity Funding (CSEF) to proprietary companies , providing new funding avenues for startups that face difficulty raising capital from traditional sources.
Ultimately, 2017-18 is set to be an exciting year for startups looking to undertake new ventures and seek to achieve the new innovations that could take their business to the next level. Given the cash deficiencies that are often experienced by startups, this could be the best year to take advantage of the R&D Tax Incentive, Export Market Development Grant and the new regulatory environment for the financial services industry to increase the cash within your business and seek to grow from Start-Up to Success .
An anomaly about government funding is that despite being such an attractive source of cash, the majority of eligible companies either don’t know it exists or don’t know how to access it.
If I were to simplify government grants I would explain them in two points:
The first being Innovation and the second being assistance for bringing foreign revenue to Australia.
The benefit involved in attaining government funding can be quite large and at times could amount to between 40 per cent and 50 per cent of funds spent in innovation or marketing to foreign markets.
Ask yourself the following question: are you doing something different that you believe your competitors aren’t doing, and that is new in the space?
If your answer’s yes, the next step would be to consider the three basic principles of innovation grants
1. New Knowledge 2. Experimentation and 3. Uncertainty
These three principles all flow into each other.
Lets explain these principles using actual case studies.
1. New knowledge begins by identifying a gap in the market.
A toy company (Copter’s Pty Ltd) that manufactures radio controlled helicopters decided to develop a new model that included a multi-lingual voice recognition system. The company wanted to integrate headset and microphone control into their helicopters. Some web searches were done and the result was that there seems to not be an off the shelf product available in the world that solves this problem.
An organic beverage manufacturer and formulator (Organics Pty Ltd) realised that the short shelf life of organic beverages is a limiting factor for exportation. Some web searches were done and the result was that there seems to not be an off the shelf product available in the world that solves this problem.
Copter’s Pty Ltd soon realised that the new additions proposed many challenges. The engineers had to trial different technologies in order to get the best result.
At this point Organics Pty Ltd started developing a solution to fill the gap that was found. The development process required experimentation and different iterations of the product. The process is an ongoing process as Organics Pty Ltd is continuing to improve their findings in this area.
Both Copter’s Pty Ltd and Organics Pty Ltd didn’t have certainty at the outset that these new projects were going to work. They did believe that each would be a success but the final products were achieved through much trial and error.
These final products are the items that filled the initial gap and are now the new knowledge that each company has brought to the world.
The main innovation grant available in Australia is the R&D Tax Incentive and can definitely be applied to the manufacturing industry should the project be eligible. You can find more information and apply for it here .
FOREIGN REVENUE BEING BROUGHT TO AUSTRALIA GRANTS
This avenue is simpler to explain than that of innovation grants.
There is funding available for exporters who are spending money on marketing their products to foreign markets.
Again, three basic principles, the first being an Australian product, the second being that revenue flows to Australia and the third being that marketing expenses are recognised in Australia.
The product needs to be either completely made in Australia or the majority of the product made in Australia.
If the products have an element made in a foreign country e.g.China it could still be considered an Australian product.
2.Revenue flows to Australia
The revenue gained from the Australian products being marketed abroad needs to be recognised in the Australian entity.
An entity need not have actual revenue in the first two years of applying for this grant.
3.Marketing expenditure being recognised in Australia
Expenditure spent on marketing to foreign markets needs to be recognised in the Australian entity.
These expenses could include staff and consultants employed in the foreign country, flights, conferences attended, Google and Facebook advertising, websites targeted overseas, trademarks and patents, pamphlets and flyers made and free samples being given to enter a market.
The incentive described above is known as the Export Market Development Grant (EMDG), and it can be applied for here .
EMDG offers up to a 50 per cent grant on the expenses described above.
Statistics show that about 70 per cent of eligible Australian companies either are unaware that they are eligible, or simply don’t know how to go about accessing the funding available.
Best practice would be to consider the principles explained above, and enquire as to a possible benefit and eligibility.