Startups and early-stage businesses run by Indigenous Australians have been thrown a possible investment lifeline for those who meet the specific criteria. The indigenous-led investor First Australians Capital (FAC) has received the grant to provide seed funding to this group of entrepreneurs.
The investment comes from the QBE Foundation, the first of its kind. “The grant will form part of a seed capital pool established by FAC to fund startups and early-stage businesses and address the historical and systemic barriers that have hindered indigenous entrepreneurs’ access to equitable capital,” announced the insurance company.
The foundation’s Viv Bower says this move is crucial for “financial inclusion” and to “create strong, resilient communities.” This project aims to have a long-lasting impact on “sustainability and growth” that can potentially fill the “critical financial gaps.”
First Australians Capital’s managing partner Brian Wyborn says this “significant social change” can only happen when collaborating between various stakeholders. He adds that they are now embarking on this “transformative journey toward equity and opportunity.”
Challenges faced by indigenous businesses
Like any startup, many fail, while those who get off the ground find it difficult to acquire enough funding before it’s too late. For startups and early-stage businesses run by indigenous Australians, it’s even harder.
According to a report by the FACs, challenges may include skills, funding, and procurement. These hurdles are experienced through different stages of business maturity, and the level may vary.
Skills and support
Many businesses battle with “limited familiarity with business concepts” and even access to training to acquire these much-needed skills. But for indigenous businesses, it could be even more intense. When strategic decisions must be made, skills and support can fall short.
According to the FAC report, “low numbers of indigenous business peers” and less access to the broader business networks may “limit the ability of indigenous business to scale.”
Funding challenges
This can be a constraint for indigenous businesses. “There are challenges around securing the appropriate and timely access to these funds essential to creating or scaling a business,” highlights the FAC.
Lending and small business financing can be limited due to the following reasons:
- Accessing commercial lending and traditional small business financing can face limitations. This could be due to low inter-generational wealth, personal savings, and homeownership rates.
- Matching commercial lending criteria for loans, which could include providing an adequate trading history.
Procurement difficulties
Certain institutions may view access to larger contracts with businesses or the government as exclusive. Those contracts may not receive advertisement beyond established suppliers, creating challenges for smaller companies to compete.
The procurement process is difficult and requires experienced teams. However, historical disparities may also restrict support for indigenous entrepreneurs both before and after the sourcing process.
Addressing historical disparities
The transformative funding initiative promises that there could be an equitable landscape for indigenous entrepreneurship. While these business owners continue to confront formidable challenges, this could be the start of fostering financial inclusion and empowering communities.
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
