In 2021, Hyper co-founders Tom West and Sasha Reid were invited to appear before the Australian Senate.
The Senate Select Committee on Financial Technology and Regulatory Technology had called for industry input as part of its inquiry into Australia’s fintech and startup ecosystem. Through its work with early-stage founders, Hyper was invited to contribute evidence and share observations from the front lines of startup creation.
The room included representatives from across the ecosystem, from successful technology companies such as Atlassian through to organisations including KPMG, EFTPOS and Austrade. Each brought a different perspective on the opportunities and challenges facing Australian innovation.
Tom and Sasha’s contribution focused on a different part of the journey: the earliest stages of company formation. The stage where founders are refining ideas, validating markets, navigating funding challenges and trying to build momentum with limited resources.
This article reflects on the evidence Hyper delivered to the government in 2021 and examines how those observations hold up five years later in 2026.
Why Hyper was chosen to contribute
By the time the inquiry opened, Hyper had spent six years working alongside early-stage founders across Australia and internationally.
Founded in 2015 by Tom West and Sasha Reid, Hyper’s focus was on helping people take ideas from concept to company. Through that work, the team had seen firsthand the challenges founders faced in the earliest stages of building a startup, long before revenue, investment or public recognition.
Some of those businesses would go on to become well-known names. Others never launched beyond the idea stage. Most sat somewhere in between. What connected them was that they were navigating the same set of challenges: limited access to capital, uncertainty around regulation, and the practical realities of turning an idea into a viable business.
When the Senate Select Committee on Financial Technology and Regulatory Technology called for industry submissions, Hyper was invited to share observations from working directly with founders at the earliest stages of the ecosystem.
As Tom explained in his opening statement:
“As an incubator, we sit down with hundreds of idea-phase startups each month. The main topic I personally wanted to discuss today is the difficult position founders find themselves in during the launch phase.”
The perspective Hyper brought to the inquiry was not that of investors, government or large technology companies. It was the perspective of founders at the beginning of the journey, and the barriers they faced getting started.
What the inquiry was actually about
Most people won’t know the details of what the Senate was investigating, so it’s worth explaining.
The Select Committee on Financial Technology and Regulatory Technology was examining the opportunities created by Australia’s growing fintech and regtech sectors. It looked at barriers to innovation, how Australia’s regulatory settings compared with other countries, and what the government could do to create a stronger environment for startups and emerging technology companies.
They were significant policy questions. For founders, however, those questions often showed up in much more practical ways: access to capital, regulatory complexity, hiring challenges and the difficulty of building enough momentum to get a new venture off the ground.
Through its work with early-stage founders, Hyper had a direct view of many of those challenges. The evidence Tom and Sasha provided focused on how policy settings were being experienced by founders at the earliest stages of building a company.
The fintech problem nobody talks about enough
Sasha opened his testimony with a point that deserves far more attention than it typically gets:
“With the world transitioning to a digital economy, Australia’s ongoing prosperity depends on our ability to support technology innovations in existing and emerging markets. Startups play a key role in this process by being uniquely positioned to rapidly innovate on existing paradigms and accelerate the digitisation of the offline economy.”
The sharper observation came when Tom explained what makes fintech founders particularly exposed. A typical fintech business model depends on taking a very small margin off every transaction. Five or six cents per transaction. To build a viable, sustainable business on that kind of economics, you need enormous scale. Reaching that scale requires capital. Accessing capital through traditional channels requires investors to see predictable revenue and low risk.
A pre-revenue fintech cannot demonstrate the revenue that unlocks the capital it needs to build the product that would generate the revenue. It’s a loop with no entry point.
The compliance overhead compounds the problem. During the inquiry, sector feedback pointed to the Consumer Data Right framework’s accreditation costs sitting between $50,000 and $100,000 annually for a company that may not yet have a single paying customer. The Formation and early Growth stages of a fintech startup are not an exciting chapter in a growth story. For most founders, they’re a slow-motion emergency.
As Sasha told the committee: “This leaves many founders in a place where they can’t get access to the money needed to become a viable option for traditional sources of capital.”
The valley of death, explained from the inside
The phrase “valley of death” gets used a lot in startup circles. Tom used it deliberately in his testimony because it’s accurate, not dramatic.
The valley of death is the period between when a founder commits to building something and when they generate enough revenue to sustain the business. During that period, cash flows out constantly. Salaries, infrastructure, legal, product development, and compliance. Nothing flows back in. The longer that period lasts, the more personal the cost becomes.
Tom’s answer to the committee’s question about how founders were actually funding themselves during this phase was direct:
“Friends and family. Some even go as far as mortgaging their house. We advise against this and to look for investment first, but sometimes it’s not possible to get the buy-in.”
Founders are putting their homes on the line to fund the early stages of products that could, if they survive long enough, become significant companies. The state-level response to this — NSW’s Minimum Viable Product grant offering up to $25,000 to pre-revenue startups — is genuinely welcome. It’s also geographically limited and nowhere near sufficient for the scale of product validation most tech companies actually need. R&D grants, as Sasha noted, arrive far too late to bridge the cash flow gap that exists at the idea stage.
Something different was needed at the federal level.
SEIS: the UK model that Australia still doesn’t have
The centrepiece of Hyper’s testimony was a recommendation that was specific, proven, and backed by first-hand observation.
The UK’s Seed Enterprise Investment Scheme (SEIS) was introduced by HMRC in April 2012 to help small, early-stage companies raise funds from individual investors through a series of tax reliefs on qualifying investments.
Here’s how it works in practice. A high-net-worth individual, someone with a substantial income tax bill at the end of the financial year, invests in an early-stage startup. They can claim back up to 50% of their investment as income tax relief, alongside significant Capital Gains Tax reductions. A £10,000 investment immediately reduces their tax bill by £5,000. The scheme is capped at £150,000 per company.
What that creates is a category of investor that didn’t previously exist in mainstream finance: the SEIS investor. Leading up to the end of the financial year, these investors actively seek out multiple early-stage startups to deploy capital into. They’re looking at early-stage investment as a smart tax strategy that also happens to support innovation. The founders get cash at the point they need it most, and the investors get immediate, meaningful relief on their tax bill.
Tom had seen this ecosystem develop first-hand from Hyper’s UK operations:
“In the UK, our clients receive SEIS approval after completing our incubator process. Friends and family can then claim back up to 50% of the value of their investment in the form of income tax relief.”
The impact on Hyper’s own pipeline made the policy difference impossible to ignore. In the UK: roughly 400 startup leads per month. In Australia at the time: approximately 160. Tom was direct about where he believed that gap would lead: “If Australia doesn’t follow and give the same income tax relief and CGT relief, I feel this will affect the economy over the next ten years.”
That was 2021. The prediction has had five years to mature.
Applying for SEIS requires real work from founders. A business plan, a financial forecast, a proof of concept, and a registered entity. Once approved, they receive a certificate to present to investors. The process filters out casual ideas and rewards founders who have done the work to build a credible foundation.
Hyper’s recommendation to the Senate was an equivalent Australian scheme, capped at between $200,000 and $300,000, giving both founders and investors a structured pathway to cross the valley of death together.
The roadmap: proof and funding, proof and funding
One of the clearest ideas to come out of Hyper’s Senate appearance was a phrase Tom used that captures how startup ecosystems should actually work.
Proof and funding. Proof and funding. Proof and funding.
A repeating cycle where founders demonstrate progress, unlock the next round of support, prove the next milestone, and access the next tranche of funding, all the way through to commercial viability.
Startup development is not linear. Founders iterate, pivot, validate, and rebuild. A federal process that built structured, progressive funding triggers around proof points rather than a one-size-fits-all grant at a single stage would fundamentally change the landscape for pre-revenue founders across Australia.
As Tom put it after the hearing: “If we had a federal process, something that allows every founder to have the same roadmap of proof and funding, proof and funding, and proof and funding, to get them all the way through to that next stage, we can really see a transformation happen in the early-stage ecosystem of Australia.”
Why Australia should actually care: the offshore profit drain
There’s a question that came up in the committee session that’s worth dwelling on, because the answer has real economic weight.
Why should Australia fight for early-stage startups?
Tom had a way of making this land. Do you use Uber? Do you use Airbnb? Of course. They’re woven into daily life. They’re also not Australian companies. They don’t pay Australian corporate tax. Every fare, every booking, every transaction: the profit goes offshore. Employment is stimulated to a degree, yes. The wealth creation, the tax contribution, the long-term economic benefit accumulates elsewhere.
The resources sector currently accounts for more than 60% of Australia’s exports. That’s a significant concentration of economic risk in a sector that faces long-term structural pressure. Tech-enabled, globally scalable startups represent a genuine pathway to economic diversification. Export revenue tied to software products and platforms rather than commodity prices. Corporate tax contributions from companies with real roots in Australian soil.
Every Uber-scale company that grows from Australian soil rather than being imported from Silicon Valley represents a structural economic shift, with real long-term consequences for employment, tax revenue, and wealth creation.
The public listing challenge sits alongside this. Listing on Australian boards remains expensive, potentially millions of dollars, and extraordinarily time-consuming. Tom heard directly from advisors who were steering promising scale-ups toward foreign jurisdictions because the local process was too burdensome. Better legal support frameworks, clearer education about why Australia is a competitive place to list, and genuine structural reform around listing costs would help keep companies on Australian soil once they’ve survived long enough to scale.
Expansion into the UK: what it taught Hyper about Australia’s limitations
Hyper’s decision to expand into the UK was, as Tom described it, close to necessary.
Australian founders with globally scalable ideas needed relationships and talent on the ground in Europe. They needed a realistic pathway to the hundreds of millions of potential customers across the EU. They needed investor networks that understood early-stage technology businesses the way the more mature UK and European ecosystems do.
And they needed SEIS.
Australia’s startup ecosystem at the time sat somewhere between the middle and late developmental stages seen in the US and Europe. Operating without the density of capital, talent, and infrastructure that makes the UK and US ecosystems self-reinforcing. The UK expansion gave Hyper’s Australian clients access to what their local market couldn’t yet provide.
That experience gave Tom and Sasha a comparative perspective that most domestic voices at the Senate inquiry lacked. They weren’t theorising about the UK model. They were running it.
Talent: the missing conversation
The Senate hearing touched on something that doesn’t get nearly enough attention in Australian startup policy discussions: engineering talent, and where it actually lives.
Australia has a genuine opportunity here that it hasn’t yet fully grasped. Top-tier engineers across Europe, genuinely skilled, experienced, globally competitive developers, want to live in Australia. The lifestyle, the climate, the opportunity. The appetite is real and largely unmet.
The Global Business and Talent Attraction Taskforce exists to address this, and it’s a strong initiative. Tom’s observation during the inquiry was candid: he’d only heard about it a few weeks before the hearing. A process that most potential beneficiaries don’t know exists isn’t working at full capacity.
What would meaningful talent attraction look like in practice? Tom had specific ideas. Structured packages clearly outlining the cost savings an engineer could achieve over three to five years by relocating to Adelaide or Melbourne pre-Series A. Rent relief. Cloud platform credits from Google, AWS, and Meta. Outreach directly to second and third-year engineering students at universities like the University of Adelaide and UniSA, reaching people before their career trajectories are set.
The idea was to make the case compelling and concrete. Here is exactly how much better off you’ll be financially if you relocate here for the next four years. Here is the support structure waiting for you when you arrive.
Ideas versus businesses: the commercial gap nobody wants to admit
One of the less comfortable truths from Hyper’s testimony was about the nature of most startup ideas.
There is a significant gap between having an idea for a product and knowing how to build a commercially viable business around it. That gap is financial and strategic, and it’s where most early-stage founders run into serious trouble.
As an incubator, Hyper works through the commercial fundamentals explicitly with every founder: cost per acquisition, lifetime value of a customer, user retention metrics, and financial forecasting. These aren’t optional extras. They’re the difference between a product that gets built and a business that survives.
Sasha’s point to the committee was clear. Founders need to understand how their business actually makes money before they ask anyone else to believe in it. CPA, LTV, retention modelling, and commercial viability testing. Without this grounding, even a technically excellent product can collapse the moment it encounters the real cost of acquiring and keeping customers.
The deeper recommendation was to start earlier. Students in secondary education should have genuine, structured opportunities to create side hustles and launch small businesses. A real commercial experience, not a classroom simulation. The founders who come through those early experiences arrive at the startup world with something that’s very hard to teach later: the understanding that an idea only becomes a business when someone pays for it.
2021 vs. 2026: an honest accounting
Five years is long enough to take stock.
Some things have genuinely improved. The global talent attraction initiative represents real policy movement. Startup awareness within the corporate and government ecosystem has increased noticeably. The public conversation about early-stage funding has become more sophisticated, and state-level processes have expanded in scope if not yet in scale.
Capital access for pre-revenue founders remains structurally inadequate. The valley of death is still claiming companies that had no reason to fail other than running out of time and money before they could prove their model. Innovation leakage, talented founders and promising companies gravitating toward the UK, the US, or Singapore, continues.
Australia still does not have a federal equivalent to SEIS. The funding gap that Tom and Sasha described to senators in 2021 has not been closed. The roadmap of proof and funding that Tom advocated for, the systematic, federal-level infrastructure that would give every founder the same progressive pathway through the valley of death, does not yet exist in the form it needs to.
The awareness is there. The appetite for change is there. The template, in the form of the UK scheme, has been available and proven for over a decade.
The policy reform hasn’t arrived.
What still needs to happen
The recommendations from 2021 remain as relevant as the day Tom and Sasha walked into that Senate chamber.
A federal SEIS equivalent, capped at a level that creates genuine investor incentive without opening the scheme to misuse. A structured, progressive funding process built around proof points, mirroring how startups actually develop. Meaningful reform of the public listing process to make Australia a competitive jurisdiction for growing companies. Properly resourced talent attraction that communicates incentives clearly and reaches engineers before they’ve settled into their careers elsewhere.
At the foundation of all of it: genuine commitment to supporting founders at the idea stage, before they’ve proven anything, when the risk is highest, and the need is most acute.
The founders that Australia hasn’t yet seen, the ones right now sitting on ideas that could become globally significant companies, are making decisions today about whether the Australian system is worth betting their time and often their personal savings on.
Five years ago, Hyper told the Senate that Australia’s startup ecosystem needed better pathways to help founders survive long enough to prove their ideas.
From 2026, that challenge looks remarkably familiar.
The founders are here. The talent is here. The ambition is absolutely here.
The next chapter depends on whether Australia can build the conditions that allow more of those founders to cross the valley of death and build globally significant companies from Australian soil.
Want to understand how Hyper supports founders through every stage of the journey? Explore the Hyper Accelerate process or browse more insights on the Hyper blog.
Sasha Reid is the founder and CEO of Hyper, an Australian startup studio helping founders validate, launch and grow startups. Since 2015, he has worked with over 1,500 founders across AI, SaaS, fintech and consumer tech.
