Angel investors pull back from startups over super tax proposal
Prominent investors say they are pausing startup funding as Labor’s plan to tax unrealised super gains sparks warnings of liquidity issues and long-term damage.
The Albanese government’s plan to tax unrealised gains on superannuation is already impacting angel investment, with prominent investors saying they’ve stopped backing Australian startups while the policy remains on the table.
Angel investor Dean McEvoy, who sold Spreets.com to Yahoo!7 for approximately $40 million in 2011, told Capital Brief he had ceased early-stage investing due to Labor’s proposed tax on unrealised capital gains in super funds over $3 million. He warned the policy creates impossible liquidity challenges and risks damaging Australia’s startup ecosystem.
“I’ve turned down like five good companies that I would have put money into, just because I don’t even know how I’m going to deal with it,” McEvoy said, referring to the proposed tax on unrealised capital gains.
The most significant criticism from the startup and VC sectors is that the tax fails to account for the highly illiquid nature of startup investments.
