Investment Criteria

As Momentum is an Innovation Investment Fund (IIF) it has two sets of criteria for investments. The first relate to eligibility for funding under the IIF program, while the second includes all the commercial criteria typically considered by a venture capital investor.

Eligibility for funding under the IIF Program
As an IIF (Innovation Investment Fund) fund, Momentum has to comply with the investment criteria set out in its IIF licence. The Australian Government has set down very strict eligibility criteria for the investments that an IIF fund is permitted to make. The key IIF criteria include, but are not limited to the following:

Must be companies that are commercialising Australian R&D.
The average revenue over the past 2 years must be less than $4 million, with no more than $5 million in any one year.
The company should be at the seed, start-up, or early expansion stage.
The majority of employees and assets should initially be in Australia.

The company should NOT be in the financial services, investment, mining, land development or real estate sectors.

 

NOTE: The above should be taken as a brief guide to the IIF eligibility criteria. The detailed criteria may need to be considered in particular cases.

 

Momentum's Investment Criteria
Momentum is a conventional venture capital fund and its investment criteria are broadly similar to other funds in Australia and overseas. These criteria are heavily focused on commercial issues, which include:

  Management: Relevant commercial experience, ideally with previous success in building start-up ventures as well as detailed knowledge of target markets, customers and distribution channels.
Market Potential: Large, dynamic and readily accessible target markets. Market should preferably be global.
Common Interests : Entrepreneurs who aspire to become wealthy on the basis of their equity stake in the company, in tandem with all other shareholders.
Intellectual Property: The technologies are innovative, superior, protectable, and focused on meeting real market needs. The IP should preferably be owned by the company.
Exit Mechanism: Credible mechanisms for selling out Momentum's equity share; generally investments would be held for 3-5 years.
Hurdle Rate:

Momentum seeks opportunities that can offer a minimum annual return of 58% compound.