I think a little mor research would be good. ESVCLP is tax free for distributions, but the are a lot of rules as to how you may invest.
The IIF program provides dollar for dollar matching funding and is often accessed (these days) by organizations which have either an ESVCLP or a VCLP structure. There are considerably more restrictions on the type of investments that can be made when you are running under the IIF program. At Yuuwa we are running a VCLP and were successful in our bid to have IIF matching funding. Some of the rules for the IIF include: No mining investments No high yield debt instruments No listed company stock There are a lot of others. Basically you need to be investing in Australian based technology related startups (and yes the technology can serve the mining sector for those wondering) I will not comment on past VC performance, I do agree that the stats from Australia are pretty poor overall. We have only been active for just over 1 year. 3 announced deals and 1 to be announced when I get back from leave. Could not resist responding to this thread although I a typically quiet on this forum :) All the best Matt On Jan 16, 9:48 pm, "[email protected]" <[email protected]> wrote: > Dear SBA, > > I have been thinking about how to create a Tax Free Income Fund and I > would like some feed-back. > > By creating an Early Stage Venture Capital Limited Partnership > (ESVCLP) offers the the possibility of matching funding from the > government and a significant tax breaks. By combining high yielding > debt / preference shares can you 'wash' the tax liability? > > Eg Theoretical Portfoilo > > $10 Million total > > $1 Million - into Startmate / YCombinator-type startups > $5 Million into high yield debt - over 20% pa > $2 Million into Credit Union preference shares - return up to 8% full > franked > $2 Million into unlisted mining companies > > Expected value of the portfolio $10 Million > > Web startups: Zero or ($10 Million if we win the lottery) > High Yield debt: $7 Million > Credit Union Shares: $2 Million > Unlisted mining companies: $1 Million or ($30 Million if we win the > lottery again) > > In Australia, Venture Capital as an asset-class destroys lots of > money.The track record is appalling. > > From AusIndustry website: "Fund managers seeking to raise a new > venture capital fund of at least $10 million and not more than $100 > million for investing in Australian businesses may be eligible for > ESVCLP registration. > > Registration entitles a fund to flow-through tax treatment and its > investors (whether resident or non-resident) receive a complete tax > exemption on their share of the fund's income (both revenue and > capital). > > Australian businesses with assets of less than $50 million may be able > to access capital from funds registered under this program if their > primary activity is not finance or property development." > > A quick summary of the rules are no investment may exceed 20% of the > fund, ie minimum of 5 investments. Every so often, the government > grants dollar for dollar matching of investments funds. Minimum size > of fund $10 Million etc. > > It takes about a year and about $100K to establish a ESVCLP. > > The ESVCLP was never designed for Income funds and I know that > AusIndustry will whine but if I stay within the guideline I can create > an innovative funding vehicle for new ventures. > > Any thoughts / comments? > > Richard Hayes -- You received this message because you are subscribed to the Silicon Beach Australia mailing list. Guidelines on discussion: http://groups.google.com/group/silicon-beach-australia/msg/351e183e1303508d?hl=en%3Fhl%3Den No lurkers! It is expected that you introduce yourself. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en
