Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

BHP (largest mining company in the world) and Rio Tinto (second largest) are to parts of Australia as Google and Facebook are to the Bay Area.

And much less apologetic about wielding power.



Yep. Probably why Australia doesn’t churn out Tech behemoths. They’re too busy investing money to dig massive holes in the ground.


The dynamics of mine development show interesting parallels with tech, actually.

Lots of mines start from little companies searching for a possible ore body (the idea or market fit), then raising money to perform a closer survey (seed funding). If the closer geological work is promising they often obtain a lease (patents or other IP).

At this point it goes one of two ways. Either they raise enough money to start and operate the mine themselves (series A, B etc, leading to an IPO) or they sell the prospect to a major company.

Then the newly-minted millionaires, who know a lot about mining, invest in the next crop of junior miners.

So as with tech there are conceptual, exploratory, growth and liquidity phases, followed by a process of reinvestment.

I remember realising this when living in Perth and being frustrated that, with quite literally billions of dollars sloshing around the city looking to invest, you'd be hard-pressed to pitch anything smarter than a brochureware website to the local investment class.

There were other structural problems. Stock options are not A Thing for various legal reasons. Failure in starting a high-risk business is a bit of a black mark. There are VCs but so much of their money came from governments trying to jump-start a market that they were about as risk-taking as a loans officer at a bank (what government wants "10 MILLION WASTED ON PHONE APPS" as a headline?).

Meanwhile the super funds are collectively sitting on trillions of dollars[0] and investing an absurdly dumb fraction of it in the ASX. Putting just 0.5% of their holdings into VC would unlock tens of billions of dollars of potential investments.

For which, hey, VCs who lurk here and want to raise a fund: go talk to the Australian superannuation industry. It is a massive pool of underperforming cash languishing in the same dozen public companies and, because Australian law forces all Australians to set aside at least 9.5% of income for retirement, the industry will never stop having incoming funds. There will always be new money to raise[1] and it will probably the 2nd largest pool of pension investments sometime in the next 10-15 years.

I will accept finder's fees and/or massively remunerative job offers as reward for this insight.

[0] https://www.superannuation.asn.au/ArticleDocuments/269/Super...

[1] https://www.willistowerswatson.com/-/media/WTW/Images/Press/...




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: