“So they look at the 10-year returns and think that venture was catastrophic in Australia, and everybody is disinvesting because they make that connection.” They don’t see mining, the economy’s engine room, as a rainmaker for cluey venture capitalists. “Resources venture has delivered millions. But for some reason the institutions have decided they want to be Carmelite Nuns and not get any action.” Clearly, Carnegie does not restrict venture to the technology or health care industries: “It’s whatever is going to be a growing share of GDP,” he says, to convey that technology is the venture play that Australia is not the most competitive in. “Biotech, medical devices, logistics, resources venture have all gone really well. But you can’t find a way of taking an Australian technology idea to the international market without having it go through Silicon Valley. “You’re going to get crushed, because the ecosystems to process those technologies [in the US] are vastly deeper and more sophisticated.” Carnegie has backed up these bullish words about resources venture with actions. Last month, he closed a $170 million fundraising for two stapled venture capital funds, his first investment vehicles dedicated to the sector, which are being distributed by Apostle Asset Management.

“I’ve never before thought the market was deep enough,” he says of the stapled funds launch. Times have changed. He says the mining-boom states have spawned venture ecosystems to support resources entrepreneurs from idea implementation to exit. Nickel specialists congregate in the WA, coal-seam gas extractors have tapped into the opportunities in QLD, and investment banks have not been blind of these opportunities. “Around Macquarie, there’s a really good one,” Carnegie says, indicating the so-called ‘millionaires factory’ and its competitors have provided capital and services to these ecosystems. While institutions and venture managers have struggled in the post-tech wreck environment, the banks have awoken to the opportunities provided by resources entrepreneurs. “Look at the 100:1 winners: Seek, realestate.com, carsales.com, or any of the good nickel or coal trades, and you will see people going 100-times on $500,000 or $1 million investments.

But you look at where the venture firm was, or the C-round secured lender in any of these deals, and it would be a bank with its own balance sheet. It wouldn’t be in a fund.” (In fact, Seek was initially backed by CHAMP Ventures, the Macquarie Technology Fund and Gresham AMCF, according to the Value Capital, a 2009 report published by the Australian Private Equity and Venture Capital Association (AVCAL).) Carnegie’s bullishness towards resources venture has deep roots. About a decade ago, he was a B-round investor in CH4, which grew to become Arrow Energy, and in 2010 he provided debt financing to Aston Resources, a venture run by horseracing and mining entrepreneur Nathan Tinkler that listed in August 2010 with a market capitalisation of $1.2 billion. The gains from these deals reinforce his view that the mining boom and the entrepreneurial ecosystems in Australia, combined with the scarcity of capital in the venture universe, now make venture a prime opportunity. “That’s why I’m here. This is the time,” he says. “Valuations are down by 70 per cent. There’s nothing but blood on the streets and small, innovative companies are struggling for capital.” Amid the rapidly growing mining sector, there should be some start-up companies that become madly profitable, he believes, and others that fall by the wayside.

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