Do you need a HandUp or a HandOut?

hand upI was interested but not surprised to hear lots of outrage when the last Australian budget announced cuts to various StartUp/Innovation/Entrepreneur finding programs.   Along with cuts in almost every area of Govt in an endeavour to get the books back in balance.

Rather than provide grants and no strings attached funding to people who have good ideas I believe the Government should be supporting in other ways.  Providing introductions and bestowing credibility and then getting out of the way is the best thing any Government agency can do.

With the exception of research and development that is not commercially viable budding entrepreneurs should not be putting their hand out but merely asking for a hand up … and this might mean helping them to cut through the red or green tape.

There are plenty of investment sources out there looking for opportunities that are at least commercially viable. But generally the want to know one thing and one thing only before they will be interested ….. Is there a customer for this and will they pay the asking price.

As such rather than wait on Govt funding, perhaps now budding entrepreneurs will do what they should always have done before starting work!!  Having identified the customer that will pay then ask for some up front payment ….  Think CrowdFunding … but failing that find an investor and tell them all about your customers.

And when it comes to investors ..

remember if you are going to rob a bank perhaps you should hold up a few service stations along the way…..

 

in other words before you go after a big investor go after smaller ones so you practice your pitch and your viability (and offer them equity more for less $$)… so that when you are ready for the big fish you will have the experience and expertise …possibly even a proven concept. And if you rob enough service stations you wont need to rob the bank anyway.

But back to the beginning…. one of the best examples of entrepreneurship was an old boss of mine John Neller in the 70s and 80s who first Found an Unmet Need ….and when he needed to he went out and Found A Customer that paid in advance,

Unless the Government wants to fund lots of businesses that will have short lives or just survive in the hope of finding the next Google or Facebook etc etc then tax payers money should not be used.

But for me thats not their role so the latest changes coming from the Budget with more to come don’t bother me … in fact I think a good shakeout and shake up will create a more effective StartUp/Innovation/Entrepreneur community.

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