More startup founders are using Safe Harbour provisions when facing insolvency. Here’s how it works

The Australian startup ecosystem is facing its next wave of financial challenges. With a 54% decline in capital raised by Australian startups in 2023 and a 14.5% rise in insolvencies, Australian startups are financially strained. For those operating in the capital-intensive tech sector in particular, the time between funding rounds is harder than ever.

Tech startups must juggle the requirements of building a business from scratch, securing funding, navigating regulators, cashflow demands and economic downturns, all while establishing a market presence. Unlike established businesses with a proven product-market fit and a predictable revenue stream, early-stage tech startups often prioritise product development over immediate revenue generation.