From Shark Tank to schoolyard business fairs, Australia likes the underdog and people giving it a go. But when it comes to turning good ideas into investable, scalable businesses, the numbers tell a different story. For every Atlassian, there are thousands of missed opportunities, and the root causes are structural, not personal.

On the back of eye-watering record valuations by our major banks, we thought we’d write a note about why their success is exactly what makes Australia a tough place to start and scale a business. The USA might be a hotbed of negative news right now but there’s still much we can take away from America where entrepreneurship is treated not as a hobby, but a national growth engine.

What’s Wrong with This Picture?

Australia’s corporate landscape hasn’t changed much in over 15 years. Big banks, miners, and supermarkets still dominate market capitalisation. Compare that to the U.S., where companies like Nvidia, Meta, Amazon, and Tesla have redefined entire industries and only recently joined the top of the S&P 500 within the last decade.

New ideas in Australia struggle to break through, not because we don’t have tons of them but because the capital and scale required to do so are harder to access. That’s not just a missed business opportunity, it’s a missed economic one.

Look at the Top 20 listed companies in the ASX vs the S&P 500, that held their rank in 2010 into 2025. Over 15 years, in Australia many of our largest companies are the same names.

In contrast, the U.S. has seen major turnover at the top which has been driven by companies that weren’t household names just a decade ago.

Banks Prefer Bricks to Business

Australia’s financial system is dominated by residential property lending. It’s not just a bias—it’s a defining feature.

The Commonwealth Bank of Australia has over $665 billion in home loans, but just $266 billion in business loans. That’s a 2.5-to-1 tilt toward houses over ideas. In contrast, U.S. banks and venture capital markets routinely back start-ups, even with unproven models, because the system is designed to take risk in pursuit of innovation.

When capital is concentrated in low-risk, low-productivity assets like housing, the economy misses the compounding benefits that come from business creation and reinvestment.

The charts below illustrate the disparity between owner-occupied home loans and business lending across the Big Four banks as of April 2025.

No Home? No Loan.

In Australia, collateral means real estate. Most banks won’t lend to a new business unless the founders can secure the loan against their home, something younger entrepreneurs increasingly don’t have.

In the U.S., business loans and early-stage capital are more often tied to business plans, cash flow forecasts, and growth potential. Here, your dream café, app, or clean-tech start-up still has to be backed by a house in the suburbs. It’s a system that rewards the already-established, not the emerging.

Household Debt Is a Growth Handbrake

Australia has some of the highest household debt levels in the world, driven largely by property prices. That debt forces many families into dual-income dependency just to meet the mortgage.

With little financial slack and even less time, many would-be founders shelve business plans—not because they lack drive, but because the cost of failure is simply too high. When the system forces you to choose between stability and creativity, most people understandably choose stability.

Government! Get the Memo?

Australia’s tax settings, industrial laws, and regulatory complexity are weighted toward passive wealth (property) rather than active wealth creation (business).

While the U.S. tax system rewards R&D spending, risk-taking, and reinvestment into growth, Australia still relies heavily on property-related incentives like negative gearing. As a result, innovation is stifled not by a lack of talent but by a lack of breathing room.

Why It Matters – And What We Can Do

This isn’t about becoming America (please no!). But the contrast shows what happens when an economy backs entrepreneurs with systems, incentives, and capital. The U.S. doesn’t just tolerate risk; it underwrites it.

In Australia, there’s enormous potential waiting to be unlocked, especially as intergenerational wealth shifts and younger Australians begin to think beyond property.

What’s needed now is a structural shift:

• Smarter tax settings that reward reinvestment into business
• More flexible lending standards for early-stage ventures
• A cultural (and policy) focus on innovation, not just stability

Amazon recently announced A$20 billion commitment to expand and operate data centre infrastructure in Australia making it the largest publicly disclosed tech investment in the country’s history. It aligns with the government’s ambitions around AI and productivity and may well be an early sign of broader momentum.

We hope the next biggest investors in Australia…will be Australian and that this investment is just part of a larger trend, which could mark a meaningful shift toward a more innovation-driven economy.

Entrepreneurship shouldn’t be a luxury reserved for the already established, it should be an accessible path for anyone with a vision and a plan.

At Stellan, we believe the best investments are in people and ideas that move the country forward, because innovation is not just an opportunity – it’s a responsibility.