The government’s research and development tax incentive changes are still being reviewed by a senate committee.
His suggestions also include extending JobKeeper to biotech companies that aren’t generating revenue and freeing up some of the government’s $20 billion Medical Research Future Fund to encourage more commercialisation of research by early stage companies.
“If we’re at risk of losing a generation of startups, it [the fund] could play a role while weathering the crisis,” he said.
The Medical Research Commercialisation Fund, which is managed by Dr Nave’s Brandon Capital and chaired by Bill Ferris, hit the $700 million mark last year when it launched its fifth investment fund.
The fund, which invests cash from super funds and biotech giants, including CSL, also counts the Australian government among its partners.
Dr Nave warned the life sciences sector would face more layoffs and shutdowns this year unless more support was thrown its way.
Early stage companies in the space are largely blocked from JobKeeper payments, either because they have staff on short-term contracts or they are not yet revenue generating and can’t easily show the ATO their losses.
They also face a period where investor appetite for long term projects like medical research is weakened, Dr Nave said.
“I think it’s going to be very hard in the near term — there won’t be an increase of offshore investors,” he said.
The triple forces of Covid-19, a slowdown in capital markets and tougher FIRB requirements will mean startups cannot rely on investment coming from overseas and will only be able to find help onshore, he said.
Dr Nave’s calls for a national plan come as other startup heavyweights warn a national plan is needed to reboot the startup ecosystem.
VC fund managers have said there must be policies to encourage local players to invest locally.
The Medical Research Future Fund has announced a variety of funding measures over the past month including $2.5 million to develop faster COVID-19 tests. However, the fund has told applicants via its website it has delayed some grant assessments due to the pandemic.
Emma is the small business reporter for The Age and Sydney Morning Herald based in Melbourne.