Empowering Entrepreneurs: Self Managed Venture Capital Funds (SMVCF) in Australia!
In the world of investments, empowerment often comes through control and strategic decision-making. Just as Self Managed Super Funds have revolutionized the superannuation landscape, the Self Managed Venture Capital Fund(SMVCF) is changing the game for small and medium-sized enterprise (SME) equity investments in Australia. This innovation allows investors to retain control of their investments while reducing fees paid to fund managers. Itutilises a government-supported and legislated investment vehicle that offers substantial tax advantages.
Investing in Australian SMEs with Control and Tax Benefits
SMVCFs empower investors to enter the thriving Australian SME equity market without sacrificing control. These government-recognized investment vehicles come with tax exemptions and entail no out-of-pocket fees. The core idea is to maximize the available investment capital for SMEs, and it is exemplified through Lellco’s Self-Managed Venture Capital Fund model. Lellco, an Australian Financial Services License holder, administers these funds, making them accessible to a broader range of investors.
What Are SMVCFs?
Self Managed Venture Capital Funds do for SME equity investment what Self Managed Super Funds did for superannuation investment, and in the same way.
Self Managed Super Funds allow the investor to retain investment control of their superannuation while reducing the fees paid to over-compensated fund managers through a government created and legislated investment vehicle with significant tax advantages.
Your Self Managed VC Fund empowers investors to invest into the burgeoning Australian SME equity market without loss of control, within a government created and legislated tax exempt investment vehicle and without any out-of-pocket fees.
A Lellco Development
To maximise the amount of investment capital available to SMEs Lellco has developed a nuanced approach for the benefit of investors, resulting in the Self-Managed Venture Capital Fund (SMVCF) model.
This capitalises on the availability of complete investment tax exemptions on investments made by a government registered venture capital fund, but rather than only being available to the largest investors we make it available with Self-Managed Venture Capital Funds, which are administered by Lellco, holder of an Australian Financial Services Licence (AFSL 544979) . Further details and enquiries can be made here.
Look for the SMVCF Certified Badge
The Smvcf Certified badge for AuSMEquity listings guarantees simplicity and openness. This certification ensures that the investments meet the legislative requirements for being invested via a compliant federal government-registered vehicle, granting complete tax exemption. With the SMVCF-Certified label, you can trust that your investments are aligned with this model, designed to empower you in your SME equity investments.
Aust SME equity investment comparison
| Direct SME Investment | Angel Investment Tax Incentive Scheme | Standard Venture Capital Funds | Self-Managed VC Funds | |
|---|---|---|---|---|
| Minimum Investment | No Minimum | No Minimum | $2 million | $100,000 |
| Investment Selection | Investor selected | Investor selected | Manager | Collaborative selection |
| Investment management | Investor | Investor | Manager | Collaborative management |
| Investment range | Unlimited | Very limited | Within broad range | Within broad range |
| Investee types | Venture (speculative) & Enterprise (lower risk) | Venture (speculative) | Venture (speculative) | Venture (speculative) & Enterprise (lower risk) |
| Min & max investment hold period | N/A | 12 months – 10 years | 12 months – 15 years | 12 months – 15 years |
| Max Investee Entry value | N/A | Not prescribed but ESIC test sets a very low valuation | $50m | $50m |
| Investment Divestment | Nil | Nil | Tax benefits cease at $250m value | Capital tax benefits cease at $250m value |
| Income Tax | Yes | Payable | Exempt | Exempt |
| Capital Gains Tax | Yes | Exempt | Exempt | Exempt |
| Tax Offset | Nil | 20% of invested capital capped at $200,000 p.a. | 10% of invested capital, uncapped | 10% of invested capital, uncapped |
| Capital Loss | Yes | Disregarded | Exempt | Capital Loss Strategy |
AuSMEquity is Not Only for SMVCFs
The AuSMEquity directory is not in any way limited only to SMVCFs and is open to all Australian SME Equity offers and for consideration of all potential investors.
SME Funding Objective
Regarding Australian SME Equity funding, we share the same objectives as the Federal Government:
1. To increase the level of capital available to SMEs;
2. To develop the skills and expertise of SME Equity investors; and
3. To encourage more investment into expanding enterprises and those commercialising new technology and innovations.
We do this by balancing the needs of all stakeholders; SME owners and managers, their advisers, the regulators and the investors.
In a simplified form there are two types of investors; passive (who do not wish to be active in the management of their investments) and active (who do wish to be actively involved, to some extent, in the investment decision making and management). It is actually much more nuanced than this, but this is the starting point.
AuSMEquity, Australia’s Small to Medium Enterprise (SME) Equity directory, is the go-to resource for any Australian SME seeking funding through equity or alternative financing methods, either independently or in conjunction with debt finance. Our innovative platform, provided by Lellco and Purpose Driven Capital, aligns with our mission to support the growth of Australian SMEs by enhancing access to diverse funding sources.
AuSMEquity is easy to use and open to all genuine stakeholders interested in SME funding. It complements other activities of raising Venture Capitalin Australia rather than competing with them. It offers a centralized hub where entrepreneurs, investors, and SMEs converge to discover opportunities for growth, collaboration, and mutual benefit.
Investors, entrepreneurs, and SMEs are encouraged to embrace the possibilities offered by AuSMEquity and the SMVCF model. Together, we can strengthen the backbone of the Australian economy by supporting the growth and innovation of small and medium-sized enterprises. Explore the platform, discover opportunities, and be part of the movement to drive the success of Australian SME businesses.
If you’re seeking to diversify your investment portfolio with Australian SMEs or explore potential funding opportunities, join us in Delhi. We can network with businesses seeking alternative funding that aligns with your investment goals. Also, we can together uncover exciting prospects and contribute to the flourishing Australian SME ecosystem. AuSMEquity is your gateway to Australian SME equity investment, and the SMVCF model is your key to empowerment.