A higher education startup TEQSA is prepared to register has solved a problem that established providers never face: it must prove capability without a track record. TEQSA does that by testing five things it can see before a single student enrols: the calibre and independence of the people governing it, the qualifications and actual commitment of the people who will teach, the capital available to survive two years without revenue, the realism of its plan, and whether the founder has built an institution or merely a vehicle for themselves.
This article sets out how assessors test each of those in a start-up application, the trap that catches most founders, and what a credible new provider looks like on paper and in the room. It draws on fifteen years of TEQSA registration work, much of it with founders who had built successful businesses elsewhere and were surprised to find that higher education does not work the same way.
Why a higher education startup TEQSA assesses is judged differently
The Threshold Standards are the same for everyone, but the application guide for prospective providers recognises that an applicant with no students cannot show outcomes. What it can show is capacity: structures, people, resources and plans that make the outcomes likely. TEQSA's assessment of a start-up therefore leans on the forward-looking parts of the Higher Education Standards Framework (Threshold Standards) 2021, particularly Domain 6 on governance, Standard 3.2 on staffing, Standard 2.1 on facilities and Standard 6.2 on financial viability and risk.
The difficulty is that capacity is easy to describe and hard to demonstrate, and generic applications are especially tempting for a start-up because there is no history to write about. Since TEQSA replaced Confirmed Evidence Tables with self-assurance, assessors have become practised at distinguishing an organisation that exists from a business plan with a constitution. The signals they use are set out below.
Governance that is not the founder
TEQSA's first question of any new provider is who governs it, and whether they could say no to the founder. The founder is usually the majority owner, the CEO and the driving force, and none of that is disqualifying. What is disqualifying, in practice, is a governing body made up of the founder and people who depend on the founder, and an academic board that reports to the founder. The TEQSA Act also requires every person who makes or participates in decisions affecting the whole or a substantial part of the provider's affairs to be a fit and proper person, and for a start-up that net catches the founder, the investors and the family members on the board.
Assessors look for independent directors with higher education, finance or governance experience who were appointed early enough to have shaped the provider, an academic board chaired by someone other than the founder with external academic members, and minutes that show both bodies making decisions the founder did not make for them. The specific failures that stall applications are catalogued in the governance mistakes that stall TEQSA applications; for a start-up the underlying question is simpler. Is there anyone in this organisation with the authority and the will to overrule the person who created it?
Staff who are really there
A start-up's staffing plan is a promise. TEQSA tests whether it is a promise the people named have actually made. Standard 3.2 requires teaching staff qualified at least one AQF level above the course, or with equivalent professional experience, and enough of them to deliver it. Assessors read the CVs, and then they read the employment contracts, the letters of offer and the terms of engagement, and they ask the staff at the site visit whether they intend to be there when teaching starts.
In my experience the weakest start-up applications name an impressive academic director who has agreed to two days a week from next year, a course team of sessional staff who have signed nothing, and an academic board of eminent people who have attended one meeting. None of that is capacity. A credible application names an academic lead who is employed now, a core teaching team with signed agreements and a start date, and a plan for scholarship that begins before the first cohort. The realism of the staffing plan is tested against the financial model: if the salaries in the model do not match the appointments in the staffing plan, the assessor will ask which one is true.
Capital for two years without revenue
Standard 6.2 requires the provider to be financially viable and to have the resources to deliver its courses, and for a start-up that means capital, not projected fee income. The reason is timing. Registration takes, in my experience, eighteen to twenty-four months from decision to proceed. FEE-HELP approval follows registration; CRICOS follows registration; an allocation of international student places follows CRICOS. A higher education startup TEQSA registers in year two will not see loan-supported or international revenue until year three at the earliest.
Assessors therefore read the five-year financial projections for the funding of the gap. They look for committed capital, evidenced by bank statements or binding investor agreements, sufficient to cover the build and the first cohorts on up-front fees alone. They read the assumptions on enrolment growth against the marketing plan and against comparable providers, and a projection that assumes 200 students in semester one from a standing start will be questioned. They also read the risk register for the scenario in which enrolments are half the forecast. A model that survives that scenario is credible; one that does not is a request for further information waiting to happen.
Practical guidance for a small entrant is in how small colleges can succeed with TEQSA registration.
The realism TEQSA tests
Beyond the numbers, assessors test whether the founder understands the sector being entered. A start-up that plans to offer five courses at registration, in three fields, online and on campus, to domestic and international students, from year one, has not understood it. One accredited course, designed properly, externally reviewed and approved by an academic board with a real record, is the shape of a successful first application. The second course can follow once the provider is registered and the fee for accrediting it drops to $19,100 rather than $44,700.
Realism also shows in the premises, the systems and the library. Assessors visit. A leased floor with a fit-out plan is a plan; a leased floor with classrooms, a student services desk, a functioning learning management system and a library with the resources listed in the course documents is a provider. The sequence in which those things should be built, and the order TEQSA expects to find them, is set out in starting a private higher education institution in Australia: TEQSA's roadmap.
The founder-as-everything trap
The single most common reason a higher education startup TEQSA assesses falls short is that the founder is the governing body, the CEO, the academic director, the course author, the finance function and the compliance function at once. That is how most successful small businesses start, and it is precisely what the Threshold Standards are designed to detect and reject, because an institution that depends on one person cannot assure quality when that person is absent, wrong or conflicted.
The tell-tale signs are consistent. Policies written in the founder's voice and approved by the founder. A conflict of interest register with no entries, because the founder does not see the related-party lease as a conflict. An academic board that meets when the founder convenes it and discusses what the founder tables. A financial model that only the founder can explain.
Assessors meet the founder at the site visit and then ask to meet the chair of the academic board alone, and the second conversation tells them everything.
The remedy is not to remove the founder. It is to build around them: an independent chair, an academic director with real authority, a finance function the board can question, and a habit, recorded in minutes, of the founder being told no. In my experience founders who accept that early get registered; founders who resist it spend a year answering requests for further information about governance before accepting it anyway.
My advice to founders
Build the institution before you build the application. Appoint the people who can overrule you, employ the people who will teach, fund two years without student revenue, design one course properly, and put the premises and systems in place before you lodge. TEQSA does not register ideas, and it does not register people. It registers organisations, and the fastest path for a start-up is to become one.
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Frequently asked questions
Can a brand-new company apply for TEQSA registration?
Yes. There is no minimum operating history. The applicant must show it already meets the Threshold Standards through its governance, staff, resources and plans, and that every person making decisions about its affairs is fit and proper.
How much capital does a higher education start-up need?
Enough to fund the build and the first cohorts on up-front fees alone, because FEE-HELP, CRICOS and international student allocations all follow registration. The amount depends on the discipline, mode and scale; assessors test the projections against committed capital and a downside scenario.
Can the founder chair the governing body and the academic board?
The founder can sit on the governing body. Chairing both bodies, or chairing the academic board, will be read by TEQSA as a lack of independence and is the single most common governance reason a start-up application is questioned.
How many courses should a start-up apply to accredit at registration?
One, designed properly and externally reviewed. Additional courses can be accredited after registration at the registered-provider fee of $19,100 rather than the $44,700 charged per course at initial registration.
Dr Brendan Moloney is CEO of Darlo Higher Education, Australia's largest specialist TEQSA consultancy. He holds a PhD from the University of Melbourne, is a Cambridge University Press author on governance in higher education, and has advised private providers on registration and course accreditation for more than fifteen years.