Every Australian startup scene suffers from Australia's heavy cyclical nature.
Look at movies. I bet it works like this - there's a single hit, then everyone goes nuts for the segment. Lots of funding gets poured in, and more hits come out (because they are well funded). But the returns aren't so good (because of the higher investment) and the funding dries up. And then all the talent goes overseas.
Hollywood can churn out lots of films, and some of them will be hits. This gives the studios more predicable returns. More importantly, they don't have crazy irrational expectations of massive returns, or nothing but flops.
A patient investor could arbitrage this. Fund lots of stuff over a number of years, and simply accept that they'll only get a big hit every now and then. But investors aren't that rational, no-one is.
Look at movies. I bet it works like this - there's a single hit, then everyone goes nuts for the segment. Lots of funding gets poured in, and more hits come out (because they are well funded). But the returns aren't so good (because of the higher investment) and the funding dries up. And then all the talent goes overseas.
Hollywood can churn out lots of films, and some of them will be hits. This gives the studios more predicable returns. More importantly, they don't have crazy irrational expectations of massive returns, or nothing but flops.
A patient investor could arbitrage this. Fund lots of stuff over a number of years, and simply accept that they'll only get a big hit every now and then. But investors aren't that rational, no-one is.