The Australian, July 16, 2016
When young entrepreneurs go to venture capitalists like Elaine Stead to fund their dreams, they have made a choice that will shape the course of their lives.
That choice is to start a business, rather than pursue the classic Australian dream of owning a home, and it’s a choice that’s rewriting the route to wealth and happiness for this generation.
“If they have a belief in their business idea, they’re happy to make that choice,” says Stead of Blue Sky Funds. Over the past decade, Blue Sky has funded 2500 entrepreneurs into the new economy through businesses in technology, food and agriculture, healthcare, education, retail and even a dunny business.
It’s a story being repeated across the hubs, incubators and co-working spaces of capital cities.
Starting a business is the number one dream for youth today (only 4 per cent dream of corporate jobs) and young people are starting businesses at a higher rate than ever before.
At the Commonwealth Bank, for instance, they are the fastest-growing customers for business loans, even though banks are not their preferred lenders.
And when entrepreneurs decide to commit to a business dream, they have to give up everything else. The idea that the agile nation will come at the expense of the home-owning nation may not have been in Prime Minister Malcolm Turnbull’s mission statement but it’s the reality faced by entrepreneurs.
There are many reasons why they are leaving old career tracks for the start-up pathway, but one of the most compelling is told in the costs of owning a home compared to the cost of starting a business.
Since 2000, the median cost of a Sydney house has risen fourfold — from $250,000 to $1 million. In the same time the cost of starting a business has fallen from $5m to $5000, according to the global tech research group, CB Insights.
One of the businesses to which she has recently committed $25m is Vinomofo, a hybrid retail-tech business.
With Australian tech darling Atlassian’s $6 billion float or Vinomofo’s $25m raising, entrepreneurship is increasingly a legitimate and lucrative choice.
“Australia has always had an entrepreneurial base but they can now scale their business faster and broader than ever before. They can go global really rapidly,” says Stead.
The start-up culture is not just creating a class of serial entrepreneurs, it is also offering a different career track for those who will end up in corporate jobs.
Even those who give up after the first attempt find big companies welcoming of their skills and experience.
As one entrepreneur, Andrew Lai said, “the start-up is the new MBA”.