😤 Hell hath no fury like an ecosystem scorned
The startup ecosystem has been doing the hard work of educating investors around the risks (and rewards) of investing in startups for years. That could be be wiped out if a proposal to increase the threshold for qualifying investment goes ahead.
Welcome to 2024! And what a rude entry it's been for the startup ecosystem, with the news that the Labor government is considering recommendations from regulators that the threshold for ‘sophisticated’ investors be raised.
The proposed changes could lift the threshold from $250,000 to $450,000 in terms of income or from $2.5 million to $4.5 million in terms of net assets, basically disqualifying most current angels from investing in startups. Everyone is alarmed.
As many leaders in the ecosystem pointed out to Capital Brief, the impact this is going to have on angel investing — which many have spent years building up — is devastating. It’s likely to sideline more women, young people and other under-represented groups from generating wealth and putting their money in areas they know best.
It comes after more than a decade of bringing a country that has relied on mining to oil its economy and is tiny in population size, globally irrelevant in a lot of world circles, and conservative in the way it does business, kicking and screaming into the 21st century. After all, it’s the new economy, stupid!
