Raising capital just became a little bit easier for Australia's clean energy startups. Thanks to a private ruling by the Australian Tax Office, EnergyLab's Acceleration Program is now officially eligible under the Early Stage Innovation Company (ESIC) tax benefit scheme, improving access to funding for early-stage clean energy startups in Australia.
This is excellent news for investors, as they can now be assured that by supporting EnergyLab's startups, they will receive an immediate tax offset or rebate equal to 20% of their investment, capped at $200,000 in each income year. They will also access modified capital gains tax treatment for their shareholding.
"EnergyLab's accelerator has been eligible since we graduated our first cohort but the ATO's ruling removes any doubt for our startups and their investors," explained EnergyLab CEO, James Tilbury, who worked closely with the ATO to obtain the ruling. "As soon as one of our accelerator participants or alumni raise at least $50,000 from investors who are not associates of the company, they immediately qualify as an ESIC."
Startups currently participating in EnergyLab's Acceleration Program are already planning to seize the opportunity. Howard Leong, founder of the renewable storage solutions startup, Key Energy applauds the tax office's ruling:
"The Australian Government's support for startups is one of the best in the world through the Early Stage Innovation Company (ESIC) tax incentives for Early Stage Investors. An ATO ruling on EnergyLab's status as an eligible acceleration program helps to minimise the investment risk for angel and early stage investors. " he says.
"For a startup like KeyEnergy, evolving in the energy industry takes longer than other industries such as technology and requires more capital to reach the desired scale and maturity. At Key Energy, testing innovative energy storage hardware and ensuring it complies with all relevant Australian standards is capital-intensive so this ruling will definitely help funnel more investment into our project."
Obtaining the private ruling is one of a number of steps EnergyLab has taken to make it easier for clean energy startups in Australia to raise capital. As well as running an Acceleration Program - which provides $50,000 of funding and help raising further rounds - EnergyLab runs Australia's only cleantech angel investment group.
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