Long gone are the days of scratching the barrel to find the funds for seed funding rounds, now there is a lot of interest.

It’s no surprise to see names like Washington H. Soul Pattinson, Perennial, Regal Funds Management and Ellerston popping up in private company funding rounds. Just look at the registries of companies like Prospecting, Alex Bank, Marketplacer, Planet Innovation, Songtradr and Phocas.

“With the success of a number of iconic Australian companies accessing private markets for funding, we expect to see an increase in this type of activity in Australia, in line with the emerging global trend in recent years,” said Citi’s Hamish Whitehead.

“We are seeing a growing commitment from a range of global institutional investors to participate in early-stage private finance activities for Australian businesses.

“And where investors and companies lead, we expect investment banks to follow.”

The situation is no doubt made worse by the entry of Barrenjoey and Jarden into the market, who are trying to carve out a slice of the ECM pie and have intensified competition for IPOs.

But a banker who spoke to Street Talk said it was a case of investor and corporate beware when one of the big investment banks gets involved early.

“In general, small-to-mid-cap funds are more cautious when they see the big investment banks entering this space because it’s not their expertise,” he said.

“If you buy well, you can always sell well, and when things are unlisted, people try to get too high a premium for valuations, and it becomes more difficult [to sell].”