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ARTICLE · 08 DECEMBER 2015

Making way for the innovation nation – Not being afraid to fail

Corrs Chambers Westgarth
Corrs Chambers Westgarth
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Corrs Chambers Westgarth

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If Australia is serious about supporting innovation through venture capital, we need to improve our insolvency rules.

AustraliaCorporate/Commercial Law
Andrew Lumsden
Andrew Lumsden
Felicity Daley
Felicity Daley
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Who remembers Traf-O-Data? A business founded by Bill Gates, Paul Allen and others to process the paper tapes generated by traffic counting boxes turned out to be a dismal failure. But the lessons Gates and Allen learned from that failed business led them to build one of the 20th century's most successful companies.

It is no surprise that Prime Minister Malcolm Turnbull has suggested that we need to do more as a nation to foster a better environment for Australia's venture capital (VC) industry. Indeed, we are all looking forward to the imminent release of the Prime Minister's science and innovation statement. 

Venture capital has the potential to disproportionately support innovation in the Australian economy by financing start-ups with new business ideas and high growth potential. But one aspect that needs urgent attention is the rules governing how we manage businesses' failure, especially for small companies.  

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