TLDR:
- Private equity firms like Quadrant and Federation Asset Management are increasingly investing in later stage startups, causing friction in the VC community.
- VCs are concerned about the aggressive deal terms being offered by private equity firms in funding rounds.
Private equity firms like Quadrant and Federation Asset Management are making a shift towards investing in later stage startups, a move that is causing tension within the Australian venture capitalist community. While some VCs see this as a positive development, others are concerned about the aggressive deal terms being offered by private equity firms. While private equity firms are more focused on owning and controlling companies, VCs typically take a minority stake and prioritize influencing rather than controlling the companies in which they invest.
One prominent VC highlighted the less founder-friendly terms offered by private equity firms, expressing concerns about the potential impact on the startup ecosystem. Quadrant Private Equity, for example, launched a new strategic equity fund that allows it to take minority stakes in growth companies, including investments in companies like Canva.
Despite the growing trend of private equity firms investing in startups, there are mixed feelings within the VC community about the implications of this shift. Founders and investors are cautious about speaking publicly on this issue, highlighting the sensitivity of the topic and its potential impact on funding and deal access.
