The recent introduction of a new tax on super balances above $3 million has accelerated conversations with investors, particularly those with SMSFs, about how and where capital is best allocated, while managing liquidity concerns.
As conversations shift toward asset classes, that are less correlated to public markets, alternatives start to feature more prominently. The debate then extends to centre around liquid vs illiquid allocation. In this context, venture capital could be considered for its potential in growth and building long-term portfolio resilience.
What makes venture capital especially powerful in today’s environment is its asymmetry. Market volatility, while unsettling, creates opportunities. Scope for new technologies, new markets, and new winners. The nature of venture is to identify those opportunities early (an access asset class) and back founders with the vision and capability to deliver.
Aura Ventures is a high-conviction investor. We don’t back ideas, we back fundamentals. Our portfolio companies are solving real-world problems, with clear pathways to scale. We support them from pre-seed through Series A and beyond.
As venture capital matures, investors are placing greater emphasis on who is managing the capital. High-conviction strategies rely on experienced managers with a clear thesis, disciplined approach, and the operational expertise to guide companies through multiple stages of growth. Selecting the right partner is increasingly seen as critical to achieving meaningful long-term outcomes and most importantly, turning potential into realised returns and capital.
Australia’s venture ecosystem, albeit smaller than the US, its trajectory is strong, having doubled in the last 5 years with a market size of circa $6bn. Many of our companies naturally expand into offshore markets, often with the US as a key destination. At the same time, we’re seeing increasing inbound interest from global capital seeking access to quality Australian opportunities, often through managers who can navigate both ecosystems and geographies with confidence. Australian technology businesses have continually punched well above its weight class, scaling businesses and product globally without the access to late-stage capital. There is an argument that in the short term, the new super tax may slow funding further with funds pausing or ceasing from previously participating SMSF’s.
Venture capital isn’t for every dollar. But in a sophisticated portfolio, it can play a vital role. It offers diversification, the potential for outsized returns, and an important counterweight to more liquid, market-linked assets. In the current environment of regulatory shifts, economic uncertainty, and evolving investor expectations, that balance is more relevant than ever.
Ultimately, the decision to allocate to venture capital is about alignment. Alignment between manager and investor. Between fund structure and investment horizon. Between capital and conviction. With the right partner, venture capital is not just an exposure to innovation, but a long-term tool for building value, resilience, and meaningful outcomes, regardless of whether invested in via a SMSF or other structure.