Why La Trobe University invests in venture capital: Mark Smith on the decision
Mark Smith, La Trobe University's chief operating officer, on why the university committed to an early-stage venture fund, what it looked for in a manager, and what carries over to a private client.
TL;DR
- Who this is. Mark Smith, chief operating officer of La Trobe University, on why the university committed to an early-stage venture fund.1
- The starting point was money for research. Grants and government funding have limits, and the pandemic showed the risk of relying on them.1
- La Trobe chose an outside manager over building a team. A fund brings skills the university doesn't have in-house and a spread of startups.1
- Venture sits in a mix. Accelerators, direct investments, fund partnerships and the university's own funds, so no single approach carries all the risk.1
- A cautious, committee-led investor still made room for venture. An adviser can ask the same questions for a client: access, skills and diversification.
Why did La Trobe University invest in a venture capital fund?
To find new ways to fund research, and to support startups and the talent pipeline. Mark Smith is chief operating officer of La Trobe University in Melbourne. His interview was published in June 2025, when Tall Order was called Skalata Ventures. La Trobe is an investor in our funds, so read his comments about us with that in mind.1
Why are universities looking beyond grants?
Because the traditional sources have limits.
“Universities have mainly relied on grants and government funding for research. However, these sources have limitations, and sometimes the funding decreases,” Smith explains. “So, it's smart to explore new ways of funding research and projects.”
The pandemic made the point for him.
“We've learned that having a variety of funding options is crucial. Startups and commercialisation efforts allow us to create a stable financial base while also advancing new ideas and technologies.”
Why use an outside fund instead of investing directly?
Mainly for skills La Trobe didn't have in-house.1
“Investing in VC funds, like Skalata, can serve a few purposes. Firstly, it allows us to tap into a skill set that we might not have in-house. These funds have expertise in evaluating and supporting startups, which can complement what universities do.”
The second was spread across many companies, which matters when a few winners produce most of the returns (see power law).
“Skalata gives us access to a variety of startups – a diversified portfolio. We hope to not only gain financially but also support the growth of startups and the talent pipeline we want to nurture.”
How a venture fund works explains what the manager does with the money and how they are paid.
What did La Trobe look for in a manager?
Openness and a working relationship with the university sector, which is what he said he saw in us.
“Skalata has stood out to me because of its unique approach. It's more transparent and collaborative compared to many other VC firms. The connection it maintains with the university sector is noticeable and reassuring.”
That is one investor's view of a manager it backs. For a client, transparency can be tested: ask how often the fund reports, whether it shows realised cash returns (DPI) as well as paper value, and how it values unlisted companies. Reading a fund report and How to vet a venture fund go through both.
How does venture fit next to a university's other investments?
As one part of a mix.1
“I believe in having a mix of accelerators, direct investments, VC partnerships, and our own funds. This diversity helps us manage risk and seize different opportunities while contributing to a healthier innovation ecosystem.”
Four ways in, so no single one carries the risk
- 01
Accelerators
- 02
Direct investments
- 03 · This piece
VC fund partnerships
- Skills the university doesn't have in-house
- A diversified portfolio of startups
- Support for the talent pipeline
- 04
The university's own funds
Shown side by side because Smith names them as a mix. The piece gives no split between them.
He was frank about where universities fall short.
“One of the challenges is adapting to a faster pace. Universities can be slow in responding to opportunities due to bureaucratic processes. Also, there might be a perception that universities aren't as innovative as the business world.”
Why does a careful investor back venture at all?
In his words, for access to a broader pool of resources and opportunities.1
“Venture capital is crucial because it allows universities to tap into a broader pool of resources and opportunities. It diversifies the investment portfolio and provides a channel for startups to receive the necessary funding to grow. While universities might not have the risk appetite or expertise to handle all aspects of investment, venture capital offers a way to participate in the innovation ecosystem more dynamically.”
He expects universities, accelerators and venture firms to work more closely over time.
“I envision more collaboration and networking among universities, accelerators, and venture capital firms. Instead of isolated efforts, there will be a push to create a cohesive ecosystem where ideas and resources flow seamlessly. Collaborative efforts will not only lead to more successful startups but also position universities as vibrant hubs of innovation and entrepreneurship.”
What has changed since 2025?
The tax on a private client's gains. From 1 July 2027 the 50% CGT discount ends for individuals, trusts and partnerships, replaced by an inflation adjustment and a 30% minimum tax; growth before that date keeps the discount.2,3
Gains on eligible investments held 12 months or more inside an ESVCLP stay exempt, and investors get a tax offset of up to 10% on eligible contributions.4 That widens the after-tax gap between holding venture through a registered fund and holding other growth assets directly. The 2027 CGT changes has the detail; some rules are still in draft, so confirm with a tax adviser.
What advisers can take from this
- An outside manager buys skills and deal access most investors don't have, and that is what the fees pay for.
- One fund spreads a commitment across many companies, which matters when a few produce most of the return.
- Venture sat in La Trobe's portfolio as one part of a mix. How much to allocate looks at sizing for a client.
- Transparency can be checked. Ask for reporting, valuation methods and realised returns before a client commits.
- For individuals, the 2027 CGT change makes the structure of a venture investment matter more than it did when La Trobe committed.
Frequently asked questions
La Trobe's COO said grants and government funding have limits, and venture gives the university new ways to fund research, a spread of startups and support for the talent pipeline.
For skills and spread. A fund brings expertise in assessing and supporting startups that a university may not have in-house, and one commitment covers many companies.
In La Trobe's case it was described as one part of a mix that also includes accelerators, direct investments and the university's own funds.
Careful investors look for skills and access they lack, spread across many companies, and test a manager's transparency before committing.
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Talk to us about Fund III
Tall Order is a Melbourne seed fund. Fund III is a registered ESVCLP for wholesale investors. Justine Lum, our Head of IR, works with advisers and their clients.
Sources
- Skalata Ventures (now Tall Order), Interview with Mark Smith, La Trobe University, first published on skalata.vc in June 2025. All quotes on this page are from it. ↩
- Australian Government, Budget 2026-27, Tax reform: CGT discount, minimum tax, negative gearing, venture capital. ↩
- Federal Register of Legislation, Treasury Laws Amendment (Tax Reform No. 1) Act 2026, as made 26 June 2026. ↩
- Australian Taxation Office, ESVCLP tax incentives and concessions. ↩