Treatment of women & diversity in angel investment

Shabby, unkind and unprofessional treatment of women by men (and sometimes by other women) whether in venture capital or more broadly is unacceptable. While women have had the rough end of the stick for hundreds of years, being treated fairly and kindly should not be gender specific.

It is not about being a woman or a man or even religion or ethnicity. It’s about the values we choose to live by and which values give us a greater crack at success – however we define success!

How we treat each other and the importance of diversity is about a set of values and two values in particular – kindness and respect.

Supporting and scaling start-ups is no walk in the park. It’s often challenging and down right terrifying – for founders and investors. The fear of failure and rejection is always skulking in the shadows of fund raising, closing a sales deal and hiring senior employees. It’s anxiety inducing.

More kindness and respect would not go amiss. The AANZ believes both are key components of success, particularly when it comes to successfully scaling high growth startups.

We need to acknowledge that tough conversations are often necessary in our world. These may feel unkind but the pain can be minimised if respect and empathy – without bias – are at the heart of these conversations too.

Values complimenting kindness also support the importance of diversity. Kindness requires open-mindedness, curiosity and exploring different points of view. Successful founders live these values and these values are at the heart of the informed pivot and the ability to create and build value.

Kindness must underpin ensuring there is diversity in our deal flow, at our events and in our governance. Diversity mustn’t be about tokenism or ticking a box. Delivering diversity is about trying and looking harder to ensure it exists. It’s about valuing people to create value. We should select women (or Maori or Chinese or Buddhist) founders, speakers and board members based on their ability to shine and help others to shine. To do anything other than this is unkind – to everyone, and especially to the ‘box tickee’.

The AANZ Code of Conduct can be found here. We have added two clauses to the behaviours we expect. They are to be:
– Kind and respectful, and
– Supportive of diversity

As an industry we take responsibility, individually and collectively, for reflecting the behaviours set out in the Code of Conduct. We will talk quietly to those we are worried might not be reflecting these. We are not advocates of naming and shaming. That’s not kind or respectful.

The AANZ Constitution, however, makes it clear that our members must be “of good standing in the angel investment community” and there is provision for members to be expelled when this is no longer the case. The profound potential for common good inherent in angel investment is squandered when the self-interest reflected in unkindness is prioritised.

We all have circles of inspiration and impact – we must be the change we want to see – it’s powerful stuff.

Onwards…

Suse Reynolds
Executive Director

“Constant kindness can accomplish much. As the sun makes ice melt, kindness causes misunderstanding, mistrust, and hostility to evaporate.” – Albert Schweitzer

Please follow and like us:

Kiwi startup Hydroxsys technologies could help clean up NZ’s waterways

Hydroxsys is a clean-tech company founded on unique water extraction technologies aimed at mining, dairy and other industries requiring water extraction or remediation.

The company has acquired an experienced management team focused on developing the company’s IP and bringing revolutionary products to market.

NZ food network has thrown in their lot with Hydroxsys and is helping the company develop their revolutionary technologies.

Read more

Please follow and like us:

Investor Activity in NZ Tech Sector Continues to Intensify

TIN100 and MBIE launch second annual “Investor’s Guide to the New Zealand Technology Sector”
Auckland, May 9, 2017 – Investment in New Zealand’s technology companies continues to rise, with record amounts of funding coming from offshore investors, according to the second annual Investor’s Guide to the New Zealand Technology Sector published jointly by the Ministry of Business, Innovation and Employment (MBIE) and the Technology Investment Network (TIN).

Read more

Please follow and like us:

Global Survey Rates NZ Start-up Ecosystem

New Zealand start-ups have the highest percentage of offshore customers when measured against their counterparts from 50 other ecosystems including New York, Moscow, Beijing and London.

For the first time over 100 kiwi start-ups have taken part in the Compass Start-up Genome’s Ecosystem Ranking Survey. The Compass Start-up Genome project team is based in San Francisco and benchmarks start-up ecosystems from around the world.

The 2016 survey results have just been released at the Global Entrepreneurship Congress in Johannesburg, South Africa.

Commenting on New Zealand’s performance AANZ Chair, Marcel van den Assum said he was pleased to see “NZ Inc” on the world map.

“Start-up eco-system inputs such as volume of deals, number of angel investors and investment levels have grown consistently, and position New Zealand as a highly credible performer on a per capita basis,” said Mr van den Assum.

“I am particularly pleased to see our founders and start-ups leading the charge when it comes to engaging globally. To generate the level of value we hope our start-ups will deliver for New Zealand and their shareholders, we have to think and sell globally from day one. And our companies obviously are.”

New Zealand start-ups also ranked among the highest, at 5th, when it comes to positively interacting with corporates.

“The extent to which our companies are garnering interest from corporates bodes well for their success. New businesses need customers and investment and corporates are a great source of both,” said van den Assum.

Another important insight revealed by the survey is New Zealand entrepreneurs’ lack of experience. Less than half of our start-up growth teams have had more than two years previous entrepreneurial experience.

While this concerning, Mr van den Assum said this finding should provide a high degree of confidence to those supporting the growth and professional development of founders and start-ups.

“The challenge for New Zealand is to apply higher levels of capability, capital and connections to those businesses that have real potential to scale and deliver a return on investment to all eco-system participants. This is fundamental to longer-term sustainability. Those running start-up weekends, government incubation and accelerator programmes and the Seed Co-Investment Fund now have a clear evidence that these programmes are vital and much needed,” he said.

The survey was led by the Angel Association NZ and carried out with support from NZX, New Zealand Trade and Enterprise, New Zealand Venture Investment Fund, Ministry of Business Innovation and Employment and Callaghan Innovation.

“Lifting and supporting our high growth tech companies requires a NZ Inc approach so we are pleased that acquiring this data reflected that,” said Mr van den Assum.

 

For more information, please contact:

Suse Reynolds, AANZ executive director
mob: 021 490 974 or email: suse.reynolds@angelassociation.co.nz

Marcel van den Assum, AANZ chair and 2015 Arch Angel
mob: 021 963 459 or email: marcel@angelassociation.co.nz

The Angel Association of New Zealand (AANZ)

The Angel Association is an organisation that aims to increase the quantity, quality and success of angel investments in New Zealand and in doing so create a greater pool of capital for innovative start-up companies. It was established in 2008 to bring together New Zealand angels and early-stage funds. AANZ currently has 27 members representing over 600 individual angels associated with New Zealand’s key angel networks and funds. Recent NZ Venture Investment Fund data revealed angels have invested more than $NZ437m in over 928 deals and 296 companies in the last 10 years. For more, please visit: www.angelassociation.co.nz

The Compass Start-up Genome

The Global Startup Ecosystem Ranking is the definitive resource for founders, investors and other leaders to understand entrepreneurial vibrancy in 50+ leading cities. It was been published at the Global Entrepreneurship Congress 2017 in Johannesburg, South Africa last week in front of policymakers from 160+ countries. It will be read by approximately 500,000 people (25% founders, 25% investors, 25% policy makers, 25% other). A full copy of the report can be found at  https://www.thunderclap.it/projects/52927-startup-ecosystem-report-2017?locale=en

New Zealand Venture Investment Fund

The New Zealand Venture Investment Fund invests with venture capital funds and alongside angel investors to support New Zealand technology companies with start-up and growth capital. The NZVIF was established by the New Zealand government in 2002 to build a vibrant early stage investment market in New Zealand. We have $300 million of funds under management which are invested through two vehicles: the $250 million Venture Capital Fund of funds and the $50 million Seed Co-investment Fund. All our investments are made either through privately managed venture capital funds, or alongside experienced angel investors, who we partner with to invest into New Zealand-originated, high-growth potential companies.

Callaghan Innovation

Callaghan Innovation is the government’s business innovation agency. Its purpose is to grow New Zealand’s economy by helping businesses succeed through technology. It delivers innovation services to businesses and build New Zealand’s innovation capability, including supporting a network of incubators and accelerators across New Zealand. It also provides technical and scientific expertise, impartial advice, skills development, access to industry networks, and grant funding. www.callaghaninnovation.govt.nz

 

 

Please follow and like us:

Tech innovators pitch their wares at agribusiness showcase

Agritech innovators bathed in the spotlight at the latest Agribusiness Showcase near Palmerston North as they pitched their wares to investors looking for the next best and most profitable thing.

The occasion marked the fourth year of the showcase, sponsored by New Zealand Trade and Enterprise and the ASB, this year with a focus on 12 companies working on environmental and precision technologies.

“These companies show tenacity and courage, it’s been quite inspirational to work with them,” said NZTE investment leader Quentin Quin.

Read more

Please follow and like us:

Bay of Plenty investors take control of Rockit apple company

An argument over the ownership of the high-profile company responsible for producing the miniature Rockit apples has been resolved, with Bay of Plenty-based Oriens Capital and Auckland’s Pioneer Capital buying out company founder Phil Alison.
The Havelock North Fruit Company had been producing the apples, which are marketed in plastic tubes as a high quality snack food in New Zealand and internationally.
Mr Alison, who controlled a 49.5 per cent share of the company, originally wanted to buy out the remaining shareholders, which included a number of prominent Bay of Plenty investors. The disagreement went to the High Court last year after the parties failed to agree on price.
However, the company announced yesterday that an agreement had been reached by the shareholders under which the two experienced private equity companies would acquire all of Mr Alison’s shareholding. The transaction was also significant in being the first investment by Oriens Capital, the regions-focused Tauranga private equity firm launched last year.
Mr Alison has sold all his Rockit-related interests and would no longer be involved with the company, its subsidiaries, or related orchard suppliers of fruit.
Effective immediately, the company would begin trading as Rockit Global Ltd. Acting chief executive Austin Mortimer has been appointed chief executive of Rockit Global.
Chairman John Loughlin said the value of the transaction remained confidential.
Rockit snacks were now grown in seven countries and sold through partners in 22 countries, he said. In 2016, the company exported 77 containers of fruit and earned its maiden profit.
“With only 3 per cent of Rockit apple snacks sold in New Zealand, our sales and marketing focus is on key international markets,” Mr Loughlin said.
“We have strong growth plans for 2017 and the years ahead. The new shareholders have experience in growing New Zealand export businesses. They will contribute governance expertise and additional capital to help the company deliver on its ambitious growth plans.”
The Rockit Global board will include four members of the previous board – Mr Loughlin, plus well-known Tauranga investors Murray Denyer, Steve Saunders and Neil Craig. They would be joined by Oriens Capital chief executive James Beale and Pioneer Capital investment director Craig Styris.
Mr Loughlin said Mr Alison had made a huge contribution in recognising the potential of the fruit, then establishing and leading the business toward building the Rockit global brand.
“We will always be greatly appreciative of the work he put in to creating the international platform for the business,” he said.
Mr Denyer, a partner with Cooney Lees Morgan, Steve Saunders, founder of the Plus Group, and Neil Craig, founder of Craigs Investment Partners, are all Tauranga members of the Bay of Plenty’s Enterprise Angels start-up funding group.
“This is a major milestone for us,” said Mr Denyer.
“Bringing Pioneer and Oriens Capital into the business strengthens our share register enormously, and gives us access to their business expertise and experience,” he said.
“It’s also a success story for Enterprise Angels. Steve, Neil, John McDonald and myself all invested into this business back in 2011 when the founder first sought to raise capital. We’ve worked very hard to get the business to where it is today – to a point where it has gained the attention of and attracted investment from private equity players. It has graduated out of the angel investment space – something that few start-ups ever manage.”
Mr Mortimer described Rockit as significant New Zealand success story.
“It clearly demonstrates how high-quality fruit can be positioned as a premium, value-added product through a robust brand strategy. Rockit Global is now well-positioned to continue its rapid growth and capitalise on the substantial grab and go, healthy snack market.”
Rockit Global
– Rockit are miniature apples (1.5 x the size of a golf ball) with a sweet flavour, thin skin, and distinctive bright red blush.
– North Havelock Fruit Company worked with Plant & Food Research, together with Hawke’s Bay company Prevar, to develop the apple.
– Rockit Global now has the exclusive international licence to grow and market the PremA96 apple variety.
Please follow and like us:

NZ early stage investors have eye on global prize

Entrepreneurs are being encouraged to chase global markets if they want to win backing for their early stage ventures, with investors having their eye firmly set on international markets with little regard for domestic sales.

Massey University Master of Management student Hattaf Ansari worked with the university’s start-up incubator – the ecentre – to investigate the criteria of investors in early stage ventures in New Zealand and compared that with similar US data.

Read more

Please follow and like us:

New Zealand Mergers and Acquisitions – Trends and Insights

Chapman Tripp Corporate and Commercial News
Mergers & acquisitions volumes are holding up both internationally and in New Zealand despite an unexpected period of geopolitical and economic volatility, according to our annual Mergers & Acquisitions – trends and insights report released today.
Expected M&A trends in 2017:
 *   A gap between the number of cashed-up investors and the availability of good quality New Zealand assets will see a sellers’ market in 2017, resulting in strong price expectations, but without a return to the irrational exuberance of 2007
*   Robust private equity (PE) interest driven by cashed up PE firms on both sides of the Tasman
*   An improved Overseas Investment Act consent process will result in less competitive advantage for domestic buyers in contested transactions as shorter timeframes reduce the regulatory hurdle of gaining Overseas Investment Office (OIO) consent
*   Iwi will be more active dealmakers as they look to diversify their investments, and
*   A slow-down in activity as the New Zealand general election, scheduled for 23 September, nears, with a potential burst of post-election activity to follow.
Please follow and like us:

Exiting the Exit

Below please find a guest column that Nino Marakovic and Elizabeth Clarkson contributed to Fortune Term Sheet, in which they debate what makes for a better exit — an IPO or acquisition?

Everyone in the venture-backed technology industry — entrepreneurs, venture capitalists, and limited partners — can probably agree that a healthy exit market is critical. Without sufficient exits, there would be a liquidity gap, which would negatively impact everyone. Yet not all “successful exits” affect all the players in the venture world the same way. Accordingly, there are different views on the best path to liquidity.

Take IPOs. They’ve historically generated amazing returns for employees and investors — more than M&A exits.

Read more

Please follow and like us:

More money, more problems – Kiwi craft beer growing pains

What happens when your hobby and passion become your business? And what happens when business booms?

The incredible growth of craft beer in the past decade has created a difficult dilemma for many of the nation’s craft brewers, who suddenly find themselves running multimillion-dollar operations.

The craft beer boom has transformed the industry.

Statistics released today show total beer consumption is growing again for the first time in years.

The high alcohol category – which tends to reflect the craft beer end of the market – has doubled in the past five years and rose 17 per cent last year.

But some breweries have been growing much faster.

Take a look at the Deloitte Fast 50 index – which tracks New Zealand’s fastest growing companies.

Panhead – which has been snapped up by Lion for $25 million – was fourth on that list in 2016 with revenue growth of 925 per cent.

Tuatara, which was purchased early this month by DB for an undisclosed sum, made the list for three years in a row from 2009 to 2011.

In 2015 Garage Project topped the list with 664 per cent growth and fellow Wellington brewer ParrotDog saw 263 per cent growth that year.

It’s reminiscent of the tech boom – although beer brewing is one of the oldest of industries.

It also has much more onerous capital requirements. And relatively low margins.

“It is very difficult,” says Tuatara founder and brewer Carl Vasta. “Especially if you are doing it yourself. You run out of stainless steel tanks pretty quickly.”

“When you are producing a high quality beer that requires expensive ingredients, it’s not just the hardware, if you’ve got to buy a million worth of hops for next season and you have to pay for that today.”

Vasta made headlines this month with the sale to DB, a move that will have disappointed some purist independent craft beer fanatics.

“We looked at a few options,” says Vasta, who will stay on with Tuatara and is excited about putting his focus back on the beer making.

Those included crowd-funding, more private equity (Tuatara already had some investment from PE fund Rangatira) and even a stock market listing.

“We talked about it with the private equity company when they came in. That we could grow the business and then look at listing.”

But after doing some research, he decided the costs of listing were too daunting.

“We’d still have been running the company too … so if we were looking for help in running the company then listing didn’t really help.”

The corporate side of the business, let alone private equity, exit strategies and the rest doesn’t sit naturally with many brewers.

It is an industry that has been built largely on passionate beer lovers scaling up their home brew operations.

Matt Stevens at ParrotDog – which completed New Zealand’s most successful crowdfunding round last year – was a chartered accountant in his previous life.

But despite some experience on the financial side, he says he has never really considered what the exit strategy might be.

“We get asked all the time and none of us really have any idea what the end game looks like,” he says. “We’re just passionate about being in the moment. We get to turn up to work with our mates every day and make beer … which is one of the funnest industries to be in.”

Growth was initially debt funded by the founding shareholders, but they were keen to leverage their popularity and needed a new, bigger brewery.

“A large buyout was not really something we were interested in, stock exchange was too big … so it [crowdfunding] was kind of between.”

ParrotDog raised the maximum legal amount for a crowdfunding initiative, $2 million, in just 48 hours last August.

It is one of three breweries to go down this path, including Yeastie Boys and Renaissance.

The success of the crowdfunding round “was a flattering affirmation”, Stevens says.

But it did mean that ParrotDog suddenly gained 792 new shareholders. It now runs its own share register, including a platform to facilitate share transactions.

ParrotDog went to the public with a nominal valuation of just under$10 million. That was based on an earnings multiple they felt was in the middle of the range for comparable businesses.

But that valuation might have been squeezed down by the market if it had been a full public offer, he says.

As it turned out, the strong demand meant they achieved a post-crowdfunding valuation of more than $11 million, even though shareholders were offered no prospect of dividends in the immediate future.

Vasta’s not sure how much weight investors were putting on that valuation anyway.

“I like to think they all understood what they were buying but if you had the institutions scrutinising you, you just need that much more data about the business which is just more work than we wanted to go through … less time making beer.”

That beer-first philosophy is very much shared by Garage Project’s Jos Ruffell.

Despite huge demand for its beers, which regularly sell out, Ruffell says he has resisted the temptation to dramatically expand production.

“We’ve had times where we’ve expanded and we’ve known that the expansion is not enough to sate the demand,” he says. “When you are doubling and quadrupling in size, to say ‘we need to go tenfold’ is a pretty scary proposition.”

Chasing volume has never been a focus, he says. Instead, Garage Project produces a huge variety of experimental beers.

It started out with just a 50 litre brewing system and produced 24 different beers in 24 weeks.

Those beers were a hit and proved there was a business model, says Ruffell.

So they did an angel investment round which included friends, family and some mentors who had been advising them.

Garage Project has since produced hundreds of beer varieties and has been able to fund further expansion with operating earnings, including a big move, just underway, to start producing at a new brewery in the Hawke’s Bay.

Even that expansion is about creating the opportunity to do more experimental things, Ruffell says.

“Then if our customers respond to that, it creates a virtuous cycle and allows us to grow,” he says. “We have beers that have become very popular and the traditional wisdom would be for us to devote 60 or 70 per cent of our capacity to them. But we’re not willing to do that, we want to keep doing the things that people love about us.”

But the fiercely independent approach doesn’t necessarily mean a lack of ambition for the business.

Ruffell cites family business Whittaker’s (whose chocolate Garage Project uses for some of its specialty beers) as a role model for the kind of business he’d like to create.

Eventually, a stock market listing could potentially be an exciting path to take, but that is a long way off, he says.

“If we got to a point where our fans and drinkers could come along for the ride, that would be really rewarding.”

For now, though, New Zealand has just one publically listed brewer – Moa.

Chief executive Geoff Ross is a share market veteran, having successfully listed and sold vodka company 42 Below last decade.

“Years ago, both Lion and DB were listed here in NZ … now we’re the only opportunity for local investors,” he says.

He can see why market listing is daunting to many brewers.

“There are pros and cons. There is access to capital. But the cons are a huge amount of compliance and a market which doesn’t like variability and change. When you are in a growth business it’s never a straight line.”

Ross says he’d like to see the New Zealand stock market more open to growth companies.

But he’s not sure the problem lies with the market itself. The challenge is with the broking and advisory community, he says.

“The KiwiSaver and a lot of the bigger funds just don’t look at early stage or high growth businesses. I think it should be a component, even just 5 per cent. I think it should be more than that.”

Ross says being listed works for Moa because it has big aspirations. It is seeking to challenge the distribution stranglehold Lion and DB have on the market.

“So we don’t have a plan to exit now. We have a horizon which is much greater than that.”

He can foresee a time when Moa will look to acquire smaller, more specialist beer brands to leverage its distribution network. He already has a distribution partnership with ParrotDog.

He remains upbeat about the outlook for the craft beer sector even though he can see risks of “gold rush fever” setting in.

“There will be a bit of a shakeout. There’s a lot of brands but there is a lot of growth … the next two to three years will see some consolidation for sure.”

There will eventually be two tiers of brands, he says.

“There will be those that have made a conscious step to capitalise and get capacity and scale up … and those who have chosen a more organic path.”

And you could argue that depending on your aspirations, either route is a good one to take.

Clarification

Garage Project will be the foundation brewer in the new bStudio brewery in Napier. It is not building the brewey itself.

First published – NZ Herald 26 Feb 2016

Please follow and like us:

Lead Partners

NZTE NZVIF

Expert Partner

NZX AVID AJ Park KPMG

AANZ Summit Sponsors

Calaghan Innovation Venture|360 Kiwinet Vodafone