Episode Summary:

In this episode of First Cheque, hosts Cheryl and Maxine delve into the critical topic of liquidity within the venture capital ecosystem. They explore why IPOs (Initial Public Offerings) and M&A (Mergers and Acquisitions) are essential for investors and startups alike. The conversation covers the current state of the IPO market, the challenges of companies staying private longer, and how these factors impact investment strategies and returns. They also discuss the role of secondaries as a solution to liquidity issues, the potential effects of proposed regulatory changes in Australia, and the importance of proactive engagement from the tech community to address these challenges. Cheryl and Maxine offer insights into navigating the evolving landscape, emphasising the need for transparency, standardisation, and inclusive wealth creation in the venture space.

Key Takeaways:

00:00 - Introduction to Cheryl and Maxine; overview of the episode

01:03 - Discussion on liquidity, IPOs, and M&A in the venture ecosystem

02:07 - Defining liquidity, IPOs, and M&A for the audience

05:21 - Importance of IPOs in venture capital and why they matter

09:30 - Impact of the health of IPO markets on investment strategies

14:56 - Investment strategies during different market cycles; being contrarian

16:14 - Exploring opportunities in secondaries amidst liquidity challenges

21:13 - Reasons companies are staying private longer; regulatory influences

26:43 - Regulatory clampdown on M&A and its effects on the tech ecosystem

31:45 - Closing remarks; encouraging solutions for liquidity issues

Resources Mentioned:

SecondQuarter Ventures: An Australian secondary fund involved in facilitating liquidity through secondaries.

Airtree Ventures and Canva: Airtree's secondary transaction involving Canva as an example of internal liquidity solutions.

Instacluster: An Australian company acquired by a U.S. firm, highlighting international M&A activity.

Mr Yum and me&u: Example of Australian companies merging to navigate market challenges.

Australian Securities Exchange (ASX): Discussed as an option for listing, particularly for small-cap companies.

Jim Chalmers: Australian Treasurer proposing reforms on M&A regulations that could affect the tech ecosystem.

Tech Council of Australia (TCA): Suggested as a body to engage with and advocate on behalf of the tech community regarding regulatory changes.

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Mentioned in this episode:

November 2024 - Galah Cyber

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