Has Australian venture capital forgotten what the ‘V’ stands for?

If the $467 million Airwallex raise and secondary share sale told us anything, it is that Australian venture capitalists  are increasingly less venture and a lot more capital with a spreadsheet. 

When Blackbird and Airtree, two of the country’s flagship VC firms, finally joined a Series F round for a company they had previously passed on multiple times, it was not just ironic, it was emblematic of a shift that has been creeping up the VC food chain for years. 

As AFR’s Rear Window reported, both firms had heard Airwallex cofounders Jack Zhang and Lucy Liu pitch before. They passed.

And now? Suddenly, it is a  “can’t-miss” opportunity.

The lesson: miss it early, pay later: preferably with someone else’s  money. Herding has never looked so profitable. 

The problem, in short, is that the “V” in venture is losing its meaning. Australian VCs are flush with cash from super funds, including Hostplus, AustralianSuper, UniSuper, and Aware. While this is great for headline valuations, it is detrimental to risk-taking. Institutional mandates quietly whisper, take risks, yes, but do not embarrass us. 

The irony runs even deeper. Many of these funds advertise themselves as the “first cheque”  investors. They preach conviction over consensus.

Yet when a founder pitches too early, the reply is invariably: “We love it, but show us a little traction first.”

So the founder scrambles to raise from angels, family offices, and smaller funds. By the next round, the VC returns, frowns at a crowded cap table, and says: “a bit busy for us now.” 

Damned if you do, damned if you don’t. 

Recycled bets

The result is a sector where the same super fund money repeatedly circulates around the same deals. Blackbird backs Airwallex; Airtree backs Airwallex; Hostplus backs both. Everyone claims diversification, but it is essentially just a recycled bet on something already proven to work. 

Meanwhile, the very founders who built today’s VCs are often the ones left out.

The Atlassians, Canvas, and Safety Cultures: these were born in scrappy, uncertain years when risk was rewarded, not quarantined. Those early investors did not have risk committees. They had conviction. And courage. 

Now? The big names are more comfortable writing cheques to companies that have already cleared the hard yards. Series F rounds, global traction, and established revenue streams: these are not ventures. They are growth equity with better marketing. 

And the super funds love it. Hostplus CIO Sam Sicilia calls  it “unbelievably positive.”

Ideas go where capital is. Sure. But the kind of ideas that thrive in  a sandbox where risk is capped? That is a very different equation from the messy, improbable  bets that built Australia’s tech titans.

Australian VC has matured, no doubt. There is more capital, better follow-on support, and a vibrant ecosystem. But maturity comes at a cost: the industry risks forgetting that its job is to fund the improbable, not just the already probable. 

Can a pre-product Canva pitch a global vision to a modern Australian VC committee?

The memo writes itself: “too early, too risky, unclear path to traction.”

And so, the next  generation of founders, those willing to take real risks, will look overseas for believers, leaving the significant local funds to recycle their billions into deals they already know will succeed. 

In short, Australian venture capital is awash with money, but increasingly poor in courage.

The “V” in VC should stand for venture: exploration, experimentation, and even failure. If today’s funds continue to act more like cautious asset managers than adventurers, the next generation of innovators will vote with their feet. 

And when that happens, our billion-dollar funds may finally realise the irony: the only risk they avoided was the very risk that made their early success possible in the first place.

• Trevor Beazley is the founder of Maiden Capital, a boutique advisory firm specialising in early-stage capital raising.