By Yoke Har Lee
Government failure to co-invest in venture capital funds may see foreign venture capitalists choosing instead to invest in Australia or Asia.
That is the view of Compton Tothill, chairman of the New Zealand Taiwan Business Council, who has been active in helping to introduce the Taiwan venture capital model to New Zealand.
The Government's just-announced initiatives, which include money for development of a second-tier capital market by the New Zealand Stock Exchange, said nothing about venture capital funds, contrary to expectations.
Mr Tothill said: "I do believe we have to [have the Government co-invest] to match and encourage the development of such funds outside the US."
Mr Tothill favours the development of a unified venture capital market in Australasia to enable funds to cross-invest. He wants the Government to align its policy with Australia ,which now provides money to kickstart venture capital funds.
Ross George, managing director of Direct Capital Private Equity, which is a venture capital-cum-development capital company, said he thought the move to finance a second-tier capital market was crucial as such a market would complement an effective venture capital industry.
Venture capital gap puts off investors
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