American venture capital firms that used to look down their noses at Australian investors are now seeking their cheques, showing how badly the industry needs cash after the start-up bubble burst, and why local VC firms are struggling to raise new funds.

“There’s essentially a cleansing taking place in this asset class,” a chief investor for a family office said. The investor directs money to venture firms and asked not to be named, so they could speak freely without damaging relationships.