Australia’s National Innovation Review Report: Ventureaustralia - venture capital and the value of IP?

The VC-IP Interface: http://www.innovation.gov.au/innovationreview/Documents/NIS-review-web1.pdf

After further analysis of the venturousaustralia Report, it does not take long to appreciate that the Report views venture capital (VC) as essential to promoting Australian innovation. One need read no further than the title of the Report itself to see the emphasis of this investment structure for Australian innovators.

The Report does note, however, several difficulties regarding VC investment in innovation. Specifically, at 39, the Report states that the “intangibility of knowledge renders it problematic as collateral for financing.” Ideas are contrasted with tangible property such as houses to emphasize the point.

To provide security for VC investment, the protection of ideas through IP may be one means to ameliorate the difficulties of unsecured collateral. There is limited research on this issue, but a group at Berkeley’s Center for Law and Technology, is collating data on the importance of patents to entrepreneurs and venture capital investment: http://www.law.berkeley.edu/institutes/bclt/entrepreneurship/about.html with generous funding from Ewing Marion Kauffman Foundation http://www.kauffman.org/ .

No doubt the findings will be important to both private entrepreneurs and VCs in strategizing investments (and, of course governments in formulating policy). The Australian government’s innovation agenda is no exception.