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Startups praise review into employee share schemes

Stephanie McDonald | June 18, 2013
The government will conduct a review employee share schemes, which many startups see as vital for attracting talent.

McEvoy said that while this is fine for bricks-and-mortar businesses, it is problematic for tech startups, which often only have IP assets.

A person could make $100,000 in the stock market and be taxed 50 per cent, but "if somebody starts a business from scratch, hires people, makes money and sells it in 10 months for $100,000 profit they also lose 50 per cent of that in tax," he said.

"It's not the same - you have busted your gut to make this happen, but it's treated the same and it might be dis-incentivising people from starting a business."

goCatch's Campbell believes the government could do more to foster links between businesses and universities. He suggested a model where businesses could go to universities with business problems and have academics carry out research for solutions.

"Universities should be listening to business and setting their research agendas based on what business currently needs [to] get the two sectors working very nicely together," Campbell said.

"Australian universities do have a legacy culture of shying away from anything that makes money and I do believe that obviously there is a place for pure research.

"However, it should only be a small segment of university research and the majority of university research should be done with the goal of turning that research into real world applications as quickly as humanly possible."

The Australian Computer Society (ACS) said it supports this idea as "powerful and wonderful".

"The ACS has been encouraging stronger links between academia and business through the ACS Professional Year and Work Integrated Learning programs," Adam Redman, head, policy and external affairs at the ACS said.

This includes scholarships that combine university education with up to one year of full-time work experience.

99designs' Llewellyn commended the government for the reviews, but said ultimately, the success of Australia's startup environment will depend on access to capital, access to talent and access to customers.

McEvoy also said the reviews would not be a "silver bullet" to the problems startups face.

"We need a culture shift in Australia from digging holes for coal to building stuff that creates value so that kids, when asked what they want to be when they grow up, it's an entrepreneur or software/technology developer," he said.


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