I attended the Australian Venture Capital Conference in Cairns this week and the best analogy for me of the current situation was the Cairns waterfront itself.
The immediate tidal zone off Cairns is representative of the venture capital arena in Australia. The water is a continual murky brown as a result of the mud flats, which are continuously exposed by the ebb and flow of the tides. In these obfuscated waters danger lurks in the form of crocodiles and other nasties. When the tide goes out and the squishy underbelly of the flats are exposed, the carrion come out and begin feeding.
In the early mornings one sees a steady stream of boats roaring through these unsavoury waters, headed for open water and the pristine beaty of the Coral Sea. A few miles off the coast of Cairns one finds the Great Barrier Reef – one of the world’s wonders. The boats represent the private equity players — they have loads of cash and in their flash craft they make their way into the crystalline waters that house a myriad colors in and around the reef.
But the reef itself is fragile and can only sustain so many boats and ocean temperature rises before it begins to fall apart. Once this happens the tourists will not want to venture offhsore – they will be content walking the mud flats.
In essence what I’m saying is that the conference was bifurcated with a huge focus on the private equity arena and tacked on to its back was the venture capital side of things – perhaps now that AVCAL’s CEO is resigning the way has opened up to accomodate seriously contemplating a split into separate Private Equity and VC industry bodies.
My other point is that while VC is not necessarily flavor of the month in Australia, I have no doubt this will change. Beware the thundering herd.
It was awesome thought to catch up with folk I haven’t spoken to over the past, few busy months.