Lack of 'exit readiness' is hurting Australia's startups, KPMG warns
With around 63% of founders surveyed unprepared or unsure about their exit readiness, startups could be leaving huge sums of untapped value.
Australian startup founders' failure to adequately prepare for exits could be depressing valuations by as much as 50% and is contributing to an ongoing liquidity gap in the sector.
That's the conclusion to be drawn from a KPMG High Growth Ventures report, which found that 63% of surveyed founders were "unsure or not ready at all" for an exit. The consulting group's lead Amanda Price told Capital Brief that without earlier preparation, Australian startup exits would slow which risks a scenario where “no one’s going to continue to put their money into startups or funds”.
The report argues that a frequent cadence of startup exits in the form of mergers, acquisitions, IPOs, secondary share sales or strategic buyouts, are a lever in recycling capital and boosting liquidity in the local venture capital sector, ensuring innovative companies can access the funds they need.
More frequent Australian exits would also free experienced founders to “build the next generation of companies” and could reduce the risk of talent loss as they hunt for deeper capital pools overseas.
