When the federal government announced their 2008 budget there was one part that caused a fair bit of disappointment in the community. The Commercial Ready grant program has been closed and no new applications are being considered.

The Commercial Ready and Commercial Ready Plus grant programs offered to match existing funds . for development and commercialization of innovative technology. They were among the best government grant and tax concession programs available for startups in Australia. Others include the COMET grant, the R&D Tax Concession, and the EMD Grants. Up to 30% of the recent Commercial Ready grants went to start-up companies, so the closing of the program will certainly be felt.

Those companies who were in the process of applying for such a grant received a letter stating the following:

As part of the 2008 Federal Budget the Government has decided to close the Commercial Ready/Commercial Ready Plus program to new applications. You are therefore advised not to develop your application any further.

I appreciate that you have put a significant amount of time and resources into developing your application.

The application required a lot of planning and forecasting. Hopefully those that were in the middle of the process have found value within the planning process itself and do not feel their time has been wasted.

It’s not all bad news though. The government is currently conducting a National Review of Innovation which will hopefully result in new programs to replace Commercial Ready.

One thing I’d like to see is the creation of an incubator fund similar to the Innovation Investment Fund (IIF). If the government can encourage the development of a few strong incubators, it will have a significant impact on the tech startup community throughout Australia.

Internet startups often only require small amounts of capital to get moving and more often need to lean on some experience and advice to help shape the direction of a good idea and deal with common issues. Venture Capitalists are usually beyond the scope of most of these startups. Incubators, such as YCombinator in California, are important for internet startups because they offer early money and advice. The presence of these Incubators in Australia would no doubt increase the number and success rate of startups. This would really help the startup community flourish.