Kiwi entrepreneurs investing back

In this terrific story we see ‘proof positive’ that angels truly deserve their title. They are not only champions for the incredibly inspirational products and services New Zealanders are creating but real engines for economic growth and job creation. Seriously awesome!

 

They’ve been there, they’ve done it, and now the likes of Sam Morgan are backing a new generation of Kiwi entrepreneurs to build thriving businesses.

The idea of success begetting success is one of the strongest themes in this year’s Deloitte Fast 50, which features a number of startups that have either been launched or backed by individuals who have already enjoyed a taste of success.

Read more

Giant accolade for miniature apple developers

Another angel backed venture gets international recognition for innovation. Rocket apples are now being sold in over half a dozen international markets. Doing exactly what angel ventures should do! Congrats to Enterprise Angels investors.

The Rockit apple, an export success largely funded by Tauranga Enterprise Angels investors, has scored an international award.

It won the New Zealand-Taiwan Business Excellence Award in Taipei last week.

Phil Alison, managing director of Hawkes Bay-based Havelock North Fruit Company (HNFC), which grows and markets the Rockit, attended the Australian and New Zealand Chamber of Commerce Business Excellence Awards.

Board members Steve Saunders, Murray Denyer and Rob Craig were also present.

“This is a fantastic achievement for us, as we continue to grow our global markets,” said Mr Alison.

The Rockit apple is a miniature apple – slightly bigger than a golf ball, which was created in Hawke’s Bay. It is uniquely marketed in a branded clear plastic tube aimed at the high-end convenience food market.

The awards recognise Australian, New Zealand and Taiwanese companies that have made a significant contribution to the bilateral business relationships among the three countries. The judges noted HNFC’s innovation in positioning Rockit as a premium brand snack food and its outstanding 700 per cent year-on-year growth.

“It is nice to get recognition along the way, as it is hard work establishing a truly global brand,” said Mr Alison.

Mr Saunders, who heads Tauranga-based Plus Group, said the award reinforced the importance of strong international relationships.

“We were particularly proud to celebrate this event with our Taiwanese partners.

“It was also great to see a company which has been backed by Tauranga investors through Enterprise Angels been recognised internationally.”

The fruit is now being sold domestically and in the US, Canada, Italy, Hong Kong, Taiwan and the UK, with more international markets being opened up as new production comes on stream.

HNFC worked with Plant and Food Research and Hawke’s Bay company Prevar, to develop the apple.

The company has 79ha under cultivation with a further 55ha planned.

“We’re growing the apple to bigger production levels,” said Mr Alison.

First published on nzherald.co.nz on 2 December 2014

Fund ventures a positive forecast

NZVIF compiled the attached analysis of its investment performance at the portfolio level.  With our portfolio now developed, we hope to update this annually following completion of our audited results and valuations.  We hope it will help to keep the market informed of our performance. It is being released more widely tomorrow.

New Zealand Venture Investment Fund chief executive Franceska Banga says the government-backed investor is performing well as it puts out its first report since being founded in 2002.

The report covered the two funds NZVIF runs – the $260 million Venture Capital Fund and the $40 million Seed Co Investment Fund and showed both funds were seeing positive results.

Of the 89 companies that have passed through the Venture Capital Fund, 23 exited the programme, with 66 remaining. The Venture Capital portfolio was valued as of June 2013 at $133 million (before buy-out adjustment) compared to a $120 million investment. The seed fund had a portfolio valuation of $30.2 million, compared to $29.7 million invested.

“The VC fund is tracking well, and for the seed fund we’re holding it at value effectively, which is positive when you think that about 25 per cent of the portfolio has already been written off and yet it’s still positive. There have been some early successes, so a very good progression in that portfolio,” Banga said.

The report had been “a long time coming”, and the organisation was aiming for an annual report.

Banga said she expected the fund to continue the upward trend in the coming years, and the seed fund, which was in its early stages, was tracking steadily.

“What we’re seeing is that post-GFC investor confidence has returned, particularly in the technology sector, and we’ve seen this reflected in the funds we invested in,” she said. “The Seed Co Fund is still in its early days and we’re just starting now to see those companies come through and develop.”

NZVIF has partnered with 10 venture capital funds and 14 angel investment networks. Through its two funds, the organisation has invested in 167 technology companies.

First published on nzherald.co.nz 27 November 2014

Build to sell

Tom McKaskill has some pithy advice for angel investors and angel backed companies in the article. He encourages us to build ventures that acquirers can exploit quickly on a global basis.

Australian-born entrepreneur and angel investor Tom McKaskill drifted into business from academia and consultancy after spotting a software for small business need in the UK. Pioneer Computer Systems went from three people in Tom’s dining room to more than 160 staff in just 12 years, before being sold.

A few more companies, investment deals and exits later Tom returned to Australia to take up the post of Professor of Entrepreneurship at the Australian Graduate School of Entrepreneurship (AGSE) in Melbourne. Today he’s a member of several Australian angel investment groups, a successful author and recognised authority on exit strategies.
Lesley Springall caught up with him at the 2014 Angel Association Summit in Auckland to learn how it all started and what’s key to selling your business successfully.
NZB: What’s it like being an entrepreneur?
Tom: It’s a roller-coaster ride. Some days you’re close to bankruptcy, others you’re awash with money. But it’s never really about the money; it’s about achieving something and making a difference. It was a great ride, but after 12 years with Pioneer we were exhausted. So we sold the business to a company in Atlanta, which I then worked for over three years, before doing it all again.
NZB: Why do it all again?
Tom: Because we realised we could do a much better job. We had the experience, the money and the marketplace and we knew what we were doing. Also next time around you understand how to manage risks, people, and deals better. It’s just experience. You get better at it, so it’s an easier ride. We also built the company for sale, so it was even more successful.
NZB: What triggered your focus on exits and writing books on exits?
Tom: It was after I went back to academia. I shared the stories of the different exits I’d done and the students would say, “but Tom you were in the software business in the ‘90s when people paid for high-priced exits”. I had four exits over a dozen years and we did sell very successfully even when England was in recession, but I thought I should do some research. When I looked into it I realised there were no academic publications on privately-held exits, so I started thinking about why my exits were successful and differed to others. I built a theory around strategic value and strategic exits, which occurs when a smaller company is purchased by a large corporation for a value which incorporates what the corporation is going to do with your business – so valuing the company on its potential worth to the purchaser.
But to do this you have to deliver high competitive value, rapid scalability and final distribution channels, so the corporation buying you has at least two years where it can exploit your product rapidly. It you understand this; understand how that value is created and who would buy your business, you can build a business to offer that value from day one.
NZB: Do most entrepreneurs consider their potential strategic value when setting up?
Tom: No, because they don’t understand it. The trouble is when people look at eBay, Cisco, Yahoo and Google, who made hundreds of millions and billions of dollars in exits, people say “gee they were lucky.” But if you put hundreds of these exits together you realise they were actually very sensible investments because the investors bought something that could be quickly exploited on a global basis.
Creating strategic value is an education process for everyone in the investment ecosystem. Whether angel (early stage investor) or entrepreneur – both have to learn
how to create businesses for exit. Then everybody wins.
NZB: What’s the most common mistake entrepreneurs make?
Tom: They rush in where angels fear to tread; partly because they don’t have the education; the good theoretical knowledge to see where the dangers are and what they should avoid. They are also too reluctant to ask for advice. There are lots of people out there who will give you free advice and it’s worth talking to lots of people, because that’s probably one of the best ways to avoid most mistakes.
NZB: What’s the biggest reason companies are successful?
Tom: Eighty percent comes from where they started. If you’ve got a good idea, which has great potential, your chances of surviving, learning as you go and getting to the point where you’ve learnt enough to grow and survive is pretty good. The other 20 percent comes from getting a good education and getting good advice from the people around you.
Every day I listen to business ideas and I tell 80 percent to just forget it: you’ve got no competitive advantage; you’re in a low growth sector; your markets are too small; it’s a cost-based business where everyone is driving costs down. Once you understand what creates value, what creates growth and what creates resilience and sustainability you can look at an idea and go forget it. Trouble is too many get too far into it and get committed to it.
NZB: When should an entrepreneur consider how they might exit their business?
Tom: Day one. Right from the concept stage. If you can’t figure out who’s going to buy it, it’s got no value, so why would you want to do it.
NZB: How does New Zealand’s entrepreneurial space compare with Australia’s?
Tom: It’s better. I’ve been to angel investment workshops in New Zealand and met a lot of Kiwi angels. I think the New Zealand government better appreciates the contribution of their angel community and backs them better. It creates space for them where they can be successful. You’ve got more of a collegiate environment where people help each other more. So I think New Zealand has a very positive entrepreneurial environment.
NZB: What’s your one key piece of advice for any business owner?
Tom: If your business is going nowhere, sell it. Take the money and find a better business. Because you get locked in and it’s soul destroying. Entrepreneurs need energy, motivation, positiveness to do well. So if you’re stuck in a business that’s not going anywhere then get rid of it. Buy one or start one, or get into a partnership and get yourself going again.

First published on nzbusiness.co.nz 26 November 2014 

Did the wings work?

This update provides an unvarnished look at where the 2013 cohort of showcase companies are a year later. It illustrates the ups and the downs, the challengers and the cheer leaders. All part of being a start up venture and of course the journey that angel investors are part of too. It’s not for the faint hearted. We need to unrelentingly celebrate, support and applaud the founders and investors who are willing to get involved.

Times-7

Anthony Dixon is happy to be back. The chief executive of electronics technology company Times-7 was in front of New Zealand’s angel community again at the annual showcase investment event, but this time he had a lot more to smile about.

Accompanied by a new lead investor from Silicon Valley, Jo Major, Dixon appeared at the 2014 showcase as part of a joint US-New Zealand capital raising which aims to bring in $1.5 million. The goal is to fast-track sales of the company’s slimline antennas for the radio-frequency identification (RFID) or smart-tag market.

“Revenues have been growing but not as fast as we want,” says Dixon. “We met all our initial targets from [our last $600,000 investment round] … and now that we have an established brand and reputation, it’s time to more effectively leverage those credentials, which can only be done with dedicated resources in our most important market.”
Dixon had a hard time nailing the first $600,000, but the past year has been much, much better, he says, with the RFID market really taking off.

“We’re looking to transition our high volume [products] to a contract manufacturer by the end of this year … and we have a US-based senior sales executive already lined up. It’s a great journey to be on.”

Syl Semantics

Less enthused was former showcase golden guy Sean Wilson from Syl Semantics.

With an impressive early client list, including the NZ Police, Syl Semantics’ clever search and big data management technology closed its first investment round oversubscribed at $1.5 million. However conflicting advice and market signals shelved initial plans for a big US push after the company didn’t secure the capital its directors thought it needed to make the jump.

Wilson and his team have since returned their focus to New Zealand and (with partner Datacom) Australia.

“It’s been a bit of a tough time, but isn’t that what most early stage tech companies experience from time to time?” says Wilson.

“We’re adapting to the environment, re-scoping our plan and are still confident of meeting our revenue plan this year.”

Star86 (BigLittleBang)

Another feeling the heat of international expansion is Star86, which pocketed $1.2 million, $200,000 more than targeted, after the first showcase round. At the time, founder Chris White was upbeat after hiring a new chief technical officer and a new US-based chief marketing officer to help promote the company’s flagship product, a kids’ virtual music-making world (renamed Star86 from BigLittleBang after competitor issues). But in July the company pulled the plug on the product.

White is now based overseas and could not be reached for comment, but after repeated requests a statement attributed to Claudia Batten, Star86 chairman and well known Kiwi IT entrepreneur, was supplied, stating: “Star86 is in the process of moving to the US.” Other sources say the company isn’t dead, but is soon expected to “pivot” (change focus or target market).

Polybatics

Biotech company Polybatics has also pivoted, after raising less than half of its $1.5 million target at the last showcase. Chief executive and seasoned capital raiser Tracy Thompson says the company is now focused on developing a tuberculosis diagnostic test for the dairy and deer industries, using its patented technology, which allows it to grow protein-covered, biodegradable, bionanoparticles, or “bio-beads”. Beads are used to produce a host of industrial and medical products.

To reach this point Polybatics had to raise another $2 million this year, to add to the $4.5 million raised previously. Thompson expects the new diagnostic to be on the market next year.

IM-Able

Fellow life sciences company IM-Able finally achieved its capital raising target of $1.5 million ($250,000 more than first sought) in September, more than two years after climbing on to the capital raising treadmill.

Chief executive Elliott Kernohan says now the company has achieved its target, it can move its “ableX” rehabilitation technology – designed to help people with neurological disabilities regain their abilities – to the cloud, to ease sales, distribution and use. The technology has also been deployed in a major clinical trial at Royal Melbourne Hospital and discussions and pilot projects are under way in other overseas markets, he says.

IndieReign and Shift72

Online film distribution company IndieReign is still going great guns, says founder David White from Los Angeles. “We are signing up customers faster than we can deploy them.” But the biggest growth has come from IndieReign’s business-to-business sister company, Shift72, set up to capitalise on unexpected demand for IndieReign’s secure video on demand technology from US distributors and producers.

The companies now employ 10 staff in Hamilton, two in Australia and three in India, though 80 per cent of business is in the US.

White is now kicking off a new capital raising round to accelerate US sales, set up a sales and marketing team in LA and hire more software engineers to keep up with demand for Shift72.

First published on nzherald.co.nz on 21 November 2014

Lightning jolt on offer to startups

Ten New Zealand startup companies could be getting fast tracked into the business world, with the launch next year of Auckland accelerator programme Lightning Lab.

The programme was founded by Wellington-based Creative HQ, which has since run two rounds of the Lightning Lab programme.

The success of the three-month mentoring programmes has led to expansion into Auckland and Christchurch.

Lightning Lab Auckland director Mark MacLeod-Smith said the programme was a great opportunity for start ups to accelerate their growth with seed funding from the programme as well as mentors and support.

“There’s a lot of companies up here that are looking for funding and looking for expertise and networks, and so that’s what we’re trying to provide,” MacLeod-Smith said.
“Giving access to these amazing mentors that possess experiences and have run tech companies and have networks they can open up, can really help grow these businesses throughout the programme.”

Ian Bishop, chief executive of coaching administration business CoachSeek which went through the Wellington programme last year, said the experience and guidance it had provided had significantly accelerated company growth. CoachSeek now has more than 400 customers in 40 countries, with Bishop saying that the company “simply would not be where [it is] today without having gone through the Lightning Lab programme”.

“I think the main thing for me is especially the early days of any startup, are absolutely crazy, and so Lightning Lab provided a proven structure to the early stage chaos,” Bishop said.

“To my mind it’s the single best opportunity here in New Zealand to fully focus on making an idea work, and like I said, it’s not just the money it’s the expertise and the networks it provides.”

The 10 companies will be selected early next year, with applications for the programme closing on December 17. Each of the companies receives seed funding of $18,000 as well as mentoring and programme support from a group of tech and business mentors, with the Lightning Lab programme taking an equity stake in each of the companies in return.

This year’s mentors include Greg Cross from PowerbyProxy, Vaughan Rowsell from Vend, Ben Young from digital agency Young & Shand, Claudia Batten entrepreneur and a number of others. MacLeod-Smith said the Lightning Lab team would be looking for digital and technology companies of a range of sizes and backgrounds.

“We’re looking for companies with anything from an idea with initial work, through to paying customers with revenue,” MacLeod-Smith said.

“It’s been fantastic what Wellington’s been able to achieve so obviously we’re looking to grow on that and make sure it’s a success nationally”

Applications for the programme close on December 17, with accepted companies chosen next year. The programme runs from March through to May.

Intensive mentoring

What is the Lightning Lab programme?
Lightning Lab is a 12-week intensive mentoring programme for startup companies providing mentors, networking and seed funding.

Who can apply?
Any small to medium company with an idea and a team through to a formed company with customers and revenue.

When do companies need to apply by?
Applications for the programme close on December 17.

First published on nzherald.co.nz 20 November 2014

System gives coaches a business edge

Ian Bishop was buried in paperwork. He was spending almost as much time in front of his computer as with clients on the tennis court.

“Here I was with a growing coaching business and a team of dedicated coaches and it’s embarrassing to admit, but I was running off 150 separate spreadsheets just to keep it all going.”

Bishop went shopping, and was surprised to find nothing like a Vend (software solutions for retailers) or Xero (accountancy software for small businesses) occupying the sports management niche. So together with his business partners, IT sales and marketing manager Shaun Fitzmaurice and web developer Matthew Skilton, decided to invent something. They called it Coachseek.

After putting the business concept through its paces in Wellington’s business accelerator Lightning Lab, they realised they had stumbled on to a much more common problem than anticipated, says Bishop, chief executive of Coachseek.
“We surveyed hundreds of coaches around the world, across many disciplines, and found that 80 per cent were using some form of spreadsheet or paper-based system to run their business, all to varying degrees of accuracy and reliability.

“So there’s an interesting paradox in the sports coaching industry where coaches are using cutting edge technology in their coaching, but are stuck with out-of-date systems for how they run their businesses.”

Bishop says he’s seen how technology has filtered into the everyday life of a sports coach, from heart-rate monitors to video analysis apps, but it hasn’t really reached the back office.

“Through the pain I was experiencing in my own business, I had a natural interest in understanding how technology could benefit the way a coach operates their business.”

Coachseek pitched for funds at Lightning Lab’s May demonstration day. By September, the company had secured more than $450,000 through Auckland’s angel (early-stage) investment group Ice Angels and Wellington’s AngelHQ.

First published on nzherald.co.nz 20 November 2014

Kiwi craft leads the way in drone industry

Check out this amazing example of the sort of ventures angels have the opportunity to support into international markets.

Good old Kiwi ingenuity on a shoe-string budget could see the world’s first unmanned aerial vehicle for long-range search and rescue operational within the next two years.

The Coastguard has been working with Christchurch-based Global Aerial Platforms (GAP) for three years on two unmanned aerial vehicles (UAV) that could help save the lives of more people lost at sea.

The smaller UAV can be launched off a boat and relays information back to Coastguard staff on where any survivors are in the water and also a better view of what’s under the water.

The larger UAV, named Toroa after the Maori word for albatross, will be used to drop off emergency supplies to survivors, such as life rafts, and to send back information via sensors from a much longer range offshore. It can fly up to 10 hours at a time and up to 200 nautical miles offshore in weather conditions too severe for more conventional craft.

“That’s quite a leap over other UAVs,” said Coastguard spokesman Gordon McKay.

Following recent successful trial flights of the two prototype UAVs in Canterbury, McKay hopes to have the smaller model operational within a year and the larger 60kg one within two years pending new Civil Aviation regulations on flying into commercial airspace and beyond the operator’s line of sight.

The Coastguard UAVs have also reached the semifinals in a United Arab Emirates Drones for Good competition offering a Dh$1 million ($340,000) prize to international entrants for drones providing value-added services to improve human life.

The volunteer-run charity holds the intellectual property rights for the communications system within the drones while GAP has the IP for the composite frames supporting them.

GAP co-owner Graham Tully said his company has fronted about $360,000 in development costs so far and is now seeking angel investors to fund completing commercial models of three variants of the UAVs which are under construction. The company wants to raise between $250,000 to $750,000 to get the models to the point where they can be commercialised for search and rescue here and overseas.

Meanwhile, UAVs made by Raglan-based Aeronavics are one of only two systems granted US Federal Aviation Authority exemption to be used for film and television work in Hollywood.

The exemptions, covering six media and film companies, were a milestone in broadening the currently limited legal use of commercial drones in the US.

And in another major breakthrough for the local UAV industry, the University of Canterbury was the first in the country to be given Civil Aviation Authority (CAA) permission for two test zones for flying drones out of the pilot’s line of sight.

Aeronavics director Linda Bulk, who co-owns the four-year-old company with husband Rob Brouwer, said publicity over the FAA decision had sparked demand for its SkyJib 8 engine craft.

“We’ve had an influx of inquiries and there’s a lot of potential revenue but we are now really stretched. Everything requires energy and investment. The interest is far beyond what the company can digest,” she said.

That has prompted them to launch a $700,000 capital raising from private investors to rapidly expand the business.

The company was originally started in Australia before the couple moved to New Zealand where they now have 10 staff. It started out producing multi-rotor airframes now used worldwide for aerial photography, film-making, and agricultural and industrial applications and later expanded to become a one-stop-shop, selling ready-to-use UAVs as well as the airframes.

Aeronavics is one of a number of New Zealand businesses at the forefront of developing UAVs, which are also known as drones or remotely piloted aircraft systems (RPAs).

Their use has taken off in New Zealand and beyond but that is causing growing concern about public safety and privacy issues.

The CAA will release new interim regulations in March that better accommodate use of the new technology while still ensuring safety.

Commercial uses here include mapping and auditing kiwifruit orchards, farm mapping and pasture measurement, and monitoring electricity lines and infrastructure.

To help the local industry capitalise on world demand Callaghan Innovation has established an industry association, UAVNZ and is preparing an economic case study. It has also organised the industry’s first symposium and trade show in the Wairarapa next January.

Aviation programme manager Chris Thomson said the industry cluster of around 100 organisations wanted to differentiate themselves from cowboy operators.

“They wanted a combined voice on the market opportunity rather than a fractured one. There are a lot of small players and they wanted more horsepower in negotiations,” he said.

Shaun Mitchell, co-founder of Napier-based Altus Solutions which provides UAVs to capture aerial images in virtually any field, said the biggest advantage of the industry cluster was encouraging collaboration so local companies make the most of the export opportunity. Recent market research has forecast the economic impact of UAV technology in the US alone to be $82 billion by 2025.

There’s nothing stopping anyone buying a UAV and two years ago one crashed into an Auckland building. Mitchell said the low cost of UAVS and easy accessibility had meant some “rogue operators” were breaking aviation rules, mostly out of ignorance.

No country has yet developed a workable regulatory framework though the international civil aviation body is due to release new guidelines for drone use in March.

The University of Canterbury’s authority allows it to test long-distance use of UAVs without endangering other airspace users. The nation’s remoteness, geography and sparse population makes New Zealand an ideal testing ground.

Fred Samandari, director of the university’s Wireless Research Centre, said the plan is to have products ready to go to market once aviation regulations change and legalise flying out of the pilot’s line of sight. This rests on the unmanned aircraft having “sense and avoid” technology.

“These UAVS may be one or two inches up to as large as major aircraft – all of these things will be possible in the future, ” Samandari said.

“We’re dealing with things that are part of our daily routine whereas 20 to 30 years ago they would have been in sci-fi movies.

“We’re now working on the next 20 to 30 years and what can be done safely.”

Novice aviators able to get tips from website

Airways Corporation has set up a website www.airshare.co.nz to provide tips for novice aviators and the Civil Aviation Authority (CAA) is considering a Google pop-up providing regulatory advice when someone searches about UAVs.

Drones weighing under 25kg fall under the rules for model aircraft and can be flown in most places under a certain height, 4km away from airfields, and within the line of sight of the pilot.

CAA general manager of general aviation Steve Moore said the new interim guidelines aim to ensure public safety while still being flexible enough to incorporate new technology yet to be developed and allow the industry to exploit the significant export opportunity.

“Under this first phase the part 102 rule will accommodate all current UAV operations into the CAA system. The long-term game is to integrate UAVs so unmanned aircraft will share airspace with manned aircraft,” Moore said.

“A commercial aircraft on its final approach to Wellington airport, the next one coming down is an unmanned aircraft, and people watching are not going to know the second aircraft was remotely piloted – that’s where we’re going.”

First published on nzherlad.co.nz 8 November 2014

Consumer Watch: Prosper by following the crowd

Congratulations to the crowd funding guys – Snowball and PledgeMe – who are getting some great profile at the moment and providing another source of capital for early stage ventures.

Fancy a slice of a New Zealand company with its sights set on growth? Backing businesses in their first growth phases were once for mega-wealthy angel investors but since the Financial Markets Conduct Act made crowdfunding investment possible it has opened up to “mum and dad” investors.

Previously, only charitable crowdfunding was permitted, in which people did not want anything in return for their money except maybe a copy of the new album they were helping to record.

But people can now buy shares in companies that should aim to eventually pay dividends. So far licences have been granted for crowdfunding equity platforms Snowball Effect and PledgeMe.

Snowball Effect has closed two offers, one for funding Renaissance Brewing, which raised $700,000 from 287 investors, and one for a new Lee Tamahori film The Patriarch, which raised $468,800 from 182 investors.

It has one offer, for as much as $1.5 million for cleantech company CarbonScape. If the offer raises $400,000 then 4.32 per cent of the company will have gone to crowdfunding investors. If it gets $1.5m, almost 14.5 per cent will be in the hands of the funders.

PledgeMe has two equity offers open, for investment in tourism company H2Explore, which wants to provide hovercraft trips on the Tasman River, and computer museum Techvana.

PledgeMe also runs a “projects” arm that offers more traditional crowdfunding, helping fund projects in return for small, non-financial rewards. Another company, Liftoff, is still waiting for a licence.

Tim Langley, of Carbonscape, said crowdfunding was an accessible way for people with relatively small investments to be involved. It had been difficult to raise capital under the old rules.

“We saw moves being made last year to amend the rules to enable crowdfunding and thought it was an opportunity.”

Carbonscape uses microwave technology to turn carbon in waste wood into products such as high-quality coking coal.

The company wants the money to build a pilot plant to supply New Zealand Steel.

Snowball Effect spokesman Shaun Edlin said crowdfunding was a way to “democratise” investment. “It’s allowing mum and dad investors to get on board. They previously didn’t have the opportunity to invest in companies that weren’t making a public offer.”

Edlin said most offers could be described as high risk but high return. “This is a great way to broaden a portfolio with some investment in small to medium businesses at an early stage in their growth.”

Crowdfunding offers don’t have the same disclosure requirements as most financial products so investors should have a clear idea of what they are getting into. The shares may not be easily traded if you want out.

Claire Matthews, of Massey University’s school of economics and finance, said investors should understand what returns were expected. “If you’re expecting a return, do the normal analysis: what are the risks, what is the risk I’m not going to get any return or I’m not going to get my money back?”

Adviser Liz Koh said the fact investments could be small meant the risk would be spread.
First published on nzherald.co.nz 9 November 2014

The Executive Club: Entrepreneur draws on love of art

An example of the sorts of things that energise angels. In this article Enterprise Angel’s active member, Daryl French talks about his involvement with a Locus Research and Design in Tauranga which provides advice on commercialisation.

Timothy Allan has turned a childhood love of drawing and painting into one of New Zealand’s most successful industrial research and design firms.

Tauranga-headquartered Locus Research and Design, founded 12 years ago, advises companies and entrepreneurs on how to take ideas from concept through to commercialised products.

Locus has also become a key element in the Bay of Plenty’s export-focused business community. It is, with Plus Group, part of Newnham Park, one of the three key partners in WNT Ventures, the innovative collaboration between Tauranga companies that was one of only three government-backed business technology incubators announced by the Government earlier this year.

“With WNT Ventures, we’ll do the pre-incubation and feasibility work, because we’re well-equipped to do that,” said Mr Allan, who was named a Fellow of the Designers Institute in 2010 for his services to sustainable design in New Zealand.

“As a company, our clear differentiator is the focus on product development. We draw on science, engineering, design, all sorts of different disciplines and industries. Our core competency is getting a product from A to Z in the best shape possible.”

Daryl French, a board member of Tauranga start-up funding group Enterprise Angels and an investor/director, works closely with Mr Allan on screening and doing due diligence on new start-ups.

“Tim is a very astute individual,” said Mr French.

“Locus as a company is a really integral part of helping other companies in the Bay of Plenty to bring products to market. They’re rapidly becoming key in the overall developing entrepreneurial culture we’re getting in Tauranga. I see them as having a very big part to play and I’d like to think they will continue to grow. They are an asset.”

Mr Allan migrated to New Zealand as a 9-year-old with his South African father and Kiwi mother and the family settled in Hamilton. They arrived in 1982 during the Springbok tour protests and, said Mr Allan, “I lost my South African accent in two weeks”.

After primary school at Marist Brothers, he went to Hamilton Boys High and began developing a childhood love of painting and drawing that saw him pick up commercial illustration and graphic design work when he was still at college. After finishing high school, he did a one-year visual arts diploma at the then Waikato Polytechnic, then won admission to the four-year course at Wellington Polytechnic.

“At the time it was the best design school in New Zealand. And the great thing about the Wellington course was that it had a first general year where you got exposed to everybody going into every discipline,” he said.

Mr Allan’s decision to focus on industrial design was triggered by seeing the complex finished 3D objects being created by final year students. He was also mentored by Dame Doreen Blumhardt, the ceramicist and potter who was a key figure in introducing arts and crafts to the New Zealand education system, and who died recently in her 90s. He used to visit Dame Doreen regularly during his polytechnic years and help her with heavy work.

“She was an amazing person, and an incredible teacher and artist in her own right,” he said.

When it came time to do his own final-year project, he visited the Christchurch headquarters of Macpack, founded by Dave McIntyre, and worked closely with the firm in developing a technical harness system with a series of packs that hung off it.

“I was really interested in research and development and they were fantastic in agreeing to do a product with me,” he said. “I had to test it, prototype it, make it, re-test it, re-prototype it, and then they helped me make an actual functioning prototype.”

It was an incredible learning experience to see how really good companies were run. Timothy Allan

Macpack offered him a job when he graduated, but he decided to stay on in Wellington and accepted an offer from Te Papa, then in its set-up phase, to work with old friend Adam Ellis on the Mountain to the seas, and Geological exhibits.

After completing the Te Papa projects, he came to Tauranga to take up a job with Design Mobel, the award-winning furniture and bed-making company set up by Dave MacFarlane, which the founder sold to Sleepyhead in 2008.

“It was a really cool company to work for and Dave was an amazing guy,” said Mr Allan. “I got to cut out my own track there and grew the design team. It was an incredible learning experience to see how really good companies were run. That really set a benchmark.”

In 2002, Mr Allan set up Locus Research with support from Mr MacFarlane in the form of design work in the first year to help him get started.

“I employed the first person and then it went on from there and it’s been a pretty steady development,” he said.

The company began in Tauranga, then moved to a larger office in Mount Maunganui, before its recent move to custom-built premises in Newnham Park, Te Puna, the base for Steve Saunders’ Plus Group and Rob Jeffries’ group of companies, as well as Halala Vanilla.

Locus Research now has a staff of seven. Mr Allan retains ownership of the company, but envisages eventually moving to a partnership structure.

Locus Research works on both a fee-based and a cost recovery plus equity stake basis, and has worked with companies throughout New Zealand as well as some international work. A major focus is on the research and development side of product development, and the company advises on all facets of commercialising a product, from sales channels to manufacturing processes.

The company works with large corporates, as well as new start-ups such as Balex Marine’s award-winning Automatic Boat Loader.

“We’ve got a very broad suite of skills which works well for when a company is in start-up mode,” said Mr Allan.

“We try and help people get through the eye of the needle.”

Commercial culture key
Tim Allan says that Locus Research operates with a flat management structure.

“Culture is critical,” he said. “You want people who can work with each other and we’ve been very lucky in getting people who are willing to collaborate.”

Mr Allan said a lot of successful management was about ensuring staff were doing work that was interesting.

“I’ve always been a big driver on quality of work. If you get the quality of work right, the other things fall into line.”

He acknowledged that it could be challenging to get the right people, especially in Tauranga.

“Being a smaller company attracting the right people is not straightforward,” he said. “But lately we seem to have managed to find people locally that are bang on for our needs.”

Darryl French, an Enterprise Angels board member who works closely with Locus, said Mr Allan had built an extremely-talented group of designers and marketers around him.

“Tim’s got strong opinions and that’s what I like about him,” he said. “We don’t always agree, but I’ve never got to the stage where we haven’t been able to find the middle ground. And that’s unusual. People who have good scientific knowledge can sometimes be a bit immovable, but Tim’s different.”

Mr French also noted Mr Allan had evolved from a designer and product creator to someone who truly understood the issues of moving into the commercial space, such as cost of manufacture and getting a product to market.

“He understands all the technical stuff, but now he can sit down and have the conversations on whether a product makes commercial sense.”

On bike if time
Tim Allan says he tries to devote his non-working time to his family, partner Paula Zinzan, a senior environmental officer with Trustpower, and children Ruby, 5, and Isaac, 7.

However, he is an enthusiastic mountain biker, when he gets the time.

Mr Allan remains very much an artist and is a keen photographer.

“I’ve always had a few projects bubbling away at home,” he said.

“But it’s quite hard to find the time and the creative energy, because my job is pretty demanding on the creative front.”

First published on nzherald.co.nz 11 November 2014

 

 

Valuable advice from Lowndes Angel Investing workshop

Thank you to our wonderful sponsors Lowndes for organising such a lively and engaging event with our wonderful international Summit speakers. This was a great forum for the international speakers to talk about what motivates them personally and professionally as angel investors and was truly valuable to the audience.

Read more

 

Kiwi firm puts new spin on wool

Kiwis are used to making a living off a sheep’s back. NZ Inc has a long history of spinning wool into carpet and clothing, but Auckland-based textile company Texus Fibre wants to capitalise on our understanding of wool to take it in a new direction, producing branded, high-performance wool-based textiles for industrial applications – think filters for an air conditioner or masks that protect workers from inhaling pollutants.

Texus Fibre’s founder and chief executive Nick Davenport has more than 20 years’ experience producing industrial components out of foam and other soft fibres through his company Nexus Foams. The job’s given him an in-depth understanding of how different materials function and how customers use them in industry, he says, so when he was introduced to wool he was immediately struck by the possibilities.

“The more I drilled into it, the more I could see a strong value proposition based on some of the incredible natural functionalities of wool fibre and how they could be applied to industrial applications.”

Davenport’s research led him to connect with AgResearch and to buying the agriculturally focused Crown Research Institute’s “non-wovens” production line in Christchurch.

“Basically, that’s a machine that you put fibre into at one end and get a fabulous textile roll out at the other end,” he says. “It controls the composition all the way through.”

This technology, added to his own industry insights, provided the platform he needed to start the company.

Texus Fibre was officially established in 2011. Davenport says the functional properties of wool made personal air filters the most obvious market opportunity to tackle first.

“Wool is extraordinarily efficient when it’s used in the respiratory space. It’s able to be made electrostatic, so it acts like a dust magnet. But the really cute thing about a wool filter is not only does it capture particles extremely well, it does so at a very low breathing resistance, so combined with its ability to manage moisture, its breathability becomes a really strong attribute.”

New Zealand’s strong wool industry heritage means we’re able to grow and process quality wool fibre efficiently here, he says.

“More importantly we’re also home to some of the world’s best scientific research in this area, which has been under-utilised as traditional markets for wool – primarily carpet – have moved increasingly to synthetic alternatives.

“What Texus is doing is tapping into that science, but focusing it on markets that will appreciate the attributes of the fibre, which are technical, not consumer markets.”

Texus Fibre is looking to inject innovation on several fronts.

Wool can vary hugely, for example, so part of the company’s secret lies in understanding and isolating sources of wool with specific performance attributes and identifying the best way to obtain a consistent, high-quality and scalable supply of that raw material.

The company’s vision is also to see Texus recognised as an ingredient brand for others’ products, as manufacturers do with well-known technologies such as Gore-Tex.

Despite not having actively marketed its personal respiratory filters, Texus has already gained several customers via word-of-mouth, including major makers of safety equipment in South Africa and Australia. But it’s just the tip of an iceberg, says Davenport. The global filtration market alone is worth US$16 billion ($20.4 billion) annually.

Last year Texus gained investment from the Global from Day One (GD1) fund, comprised of investment from angel (early-stage) investment firm Sparkbox, the Government-backed New Zealand Venture Investment Fund (NZVIF) and GD1 Nominees.

Sparkbox principal and chief executive Greg Sitters cites three main factors that caught investors’ attention: It’s capitalising on a core strength of NZ Inc – our scientific understanding of wool – to find new markets suited to the fibre’s attributes; the experience of its founder; and the significant global markets for the technology.

Next in the company’s sights is China, where growing concern about the amount and toxicity of airborne dust makes it a natural target for the firm’s filtration technology.

First published on nzherald.co.nz 6 November 2014

Ray Thomson named as New Zealand Arc Angel 2014

Ray Thomson, the Auckland-based director of several budding Kiwi companies and a long-term angel  investor and early-stage investment champion has been awarded the prestigious Arc Angel Award at the 2014 Angel Summit in Auckland this week.

The Arc Angel Award is the highest honour New Zealand’s angel investment community can bestow. It recognises someone who has steadfastly championed the cause of angel investment and the investors who are willing to give a significant amount of time and money to help those start-ups and early stage companies, and particularly the entrepreneurs who risk all to establish those companies, to reach their potential.

Marcel van den Assum, chairman of the New Zealand Angel Association (AANZ) says the award was an acknowledgement of Ray Thompson’s long contribution to New Zealand’s angel investment industry. “Ray has been a long-term investor in and champion of early stage companies in New Zealand. He’s played active roles in both the Auckland-based Ice Angels group and the Angel Association, of which he is a past chairman. Most importantly he has unstintingly promoted angel investment, helping it to become a powerful force in New Zealand’s economic development today.”

Suse Reynolds, AANZ Executive Director, says Ray has not only been a mentor to many new entrepreneurs, but many new angels too. “He always has time for a cup of coffee with anyone needing help or advice whether about the company they are growing or the companies they want to invest in. He’s a true New Zealand angel and we’re all delighted he’s been given this year’s Arc Angel Award.”

Ray Thomson joined the ICE Angels in 2007 following an active and extensive career as a share broker, director and chair of a number of different investment groups. He has invested more than $1 million through the ICE Angels and directly into more than 25 companies, including Biomatters, Nexus 6, Inro, Drumleaf, Caldera, IM-Able, Nextspace, Booktrack, Parrot Analytics, Footfalls & Heartbeats, Varigate, Puteko, GreenButton, Manuka Health and Supreme Biotechnologies. He was a member of the ICE Angel’s Advisory Board from December 2010 until December 2013 and was the inaugural recipient of the William H. Payne Active Angel Award in November 2010 for being the most active ICE Angels’ Investor. He is on the Global from Day One (GD1) Fund Investment Committee and serves on a number of boards including Manuka Health New Zealand, Supreme Biotechnologies, Rush Digital Interactive and the Institute of Directors.

Former Arc Angel winners include Phil McCaw, managing partner of investment firm Movac; The Warehouse founder and long-time angel investor Stephen Tindall; Andy Hamilton, chief executive of Auckland-based incubator and business educator The Icehouse; and US super angel and Kiwiphile Bill Payne.

The sixth annual Angel Summit in Auckland was attended by over 120 delegates including investors from New Zealand, Australia and the United States. The Summit included an investment showcase in association with the local angel network, ICE Angels, where 12 high-growth companies, all with global aspirations, pitched to a packed house of investors.

Ends

For more information, please contact:

Marcel van den Assum, chair AANZ, on mob: 021 963 459 or email: [email protected]; or

Suse Reynolds, AANZ executive director, on mob: 021 490 974 or email: [email protected]


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; to support the angel networks and help create new networks; to promote the growth of angel investment in New Zealand by encouraging and educating entrepreneurs, new angel investors and angel groups; and to ensure the ongoing success of the angel movement through developing industry strategy, encouraging collaboration and educating the wider New Zealand public about the importance of angel investing in growing our economy. AANZ currently has 13 members representing more than 600 individual angels associated with New Zealand’s key angel networks and funds. Recent NZ Venture Investment Fund data revealed angels have invested almost $NZ300 million in over 600 deals in the last 7 years. For more, please visit: www.angelassociation.co.nz

Loyalty links up to new payment card

One-card-fits-all rewards programme which keeps vital information secure is a hit for the hospitality industry

The idea behind technology startup Eftplus was born out of frustration that’s only experienced by an addict who’s been denied their “fix”. When self-confessed customer-rewards addict and all-round tech guy Julian Cox had to turn down a loyalty card offer because his wallet was already stuffed full of them, he realised he had stumbled on to what was probably a common first-world problem.

Together with his Eftplus co-founder, entrepreneurship masters student Marcus Hoefliger, he set about finding a solution.

“We asked ourselves what’s the one card we take out and use on a regular basis and the answer was our payment cards,” says Hoefliger. “Why couldn’t we just use our payment card as loyalty cards?”

The idea of linking payment cards to loyalty programmes is not new. Several companies have tried to do this before, Hoefliger says. But previous attempts have foundered as they failed to comply with strict Payments Card Industry (PCI) security standards, which are designed to prevent payment card details from falling into the wrong hands.

Unless you are a financial institution with bullet-proof security then storing or transmitting full payment card numbers is an absolute no-no.

Eftplus’ innovation was finding a way to identify transactions and use them to power a loyalty programme without breaking PCI rules.

“We managed to find a way to securely identify a card, who it belongs to and then reward them based on their activity,” Hoefliger explains.

Cox and Hoefliger discovered the raw data Eftplus needed was already available in the reports the bank-owned payment network provider Paymark was sending out to retailers.

These reports contained details of daily transactions including the merchant’s identifier and, critically, a stripped-down version of the customer’s card number.

Once Eftplus had persuaded some local Dunedin retailers to share this data, the company had all it needed to get its cardless loyalty programme service up and running.

Eftplus began by building a basic reporting tool, which would give retailers insight into how much their customers were spending and when.

Soon after, the fledgling company received a phone call from Paymark, New Zealand’s largest electronic payments provider.

“They had noticed we were redirecting data from merchants in Dunedin and wanted us to come up to Auckland ‘to have a chat’,” says Hoefliger.

After the Eftplus founders outlined their vision to Paymark’s senior managers, they were “right on board”, he says. “It was what we could do with the data; how we could bring it to life, that was what they were really interested in. It was a breakthrough moment for us.”

When Eftplus launched its loyalty programme in late 2011 it immediately proved popular with small businesses, especially firms in the hospitality industry.

Part of the attraction for customers is that it is “frictionless” compared with physical loyalty cards, says Hoefliger. “The customer just does what they usually do to pay for a beer or fix up a bill. They spend $200 on Friday night and then on Saturday morning they get a message on their phone that says: ‘Thanks for coming in last night, we appreciate your custom, here’s a voucher for $10′.”

Eftplus rapidly grew to 150,000 members and was processing around 14 million transactions, but to progress it needed capital and expertise, so it approached the Auckland-based Ice Angels investor network at the end of last year.

Eftplus immediately caught the eye of Ice Angel Peter Hall, a former ASB manager who had led the bank’s True Rewards loyalty scheme. Hall, who has since joined Eftplus as its investment director, says he was attracted to the firm because “it solves the major pain points in loyalty”.

Eftplus also picked up Ice Angel Steve Lobb, the founding general manager of the Fly Buys loyalty scheme, who also turned out to be a customer through a restaurant he owned.

He is now Eftplus’ chairman.

Produced in conjunction with the Angel Association of NZ, first published nzherald.co.nz 16th October 2014

Angels light the path for NZ start-ups

Leading American angel John Huston as well as experienced New Zealand investors Steve Saunders, Bruce Bartley and Rudi Bublitz, last week told a Tauranga audience of entrepreneurs why the start-ups should seek out angel investors.

“I was pretty stunned to hear about the size and vigour of the Tauranga angel group and since I was in the country I dropped by,” said Mr Huston, who was in New Zealand to speak at this week’s angel investor conference in Auckland.

“My desire is to help young ventures avoid a lot of mistakes that those of us who’ve been in business for many years have committed,” said Mr Huston.

Mr Huston added that he had experienced a 30 per cent death rate in his portfolio.

“Of the 50 companies, I have had eight large exits, so I am now in Nirvana. But even with these companies, they’ve all missed payroll a number of times – and these are the winners. If you have a first-time entrepreneur and you couple them with a seasoned angel who has seen a number of deals, I think you have a much more powerful combination and increase the odds for success.”

Bruce Bartley, who runs the Engine Room group in Taupo for entrepreneurs, said he had started a dozen businesses and was involved in six, including the Spidertracks GPS tracking app.

“The normal angel model of building a portfolio doesn’t work for me,” he said. “As an investor, if you’ve got a small amount in you can’t do anything, so I get a larger chunk of a smaller company so that I can step in and help it back on to the rails.”

Rudi Bublitz, born in Germany, opted for New Zealand because he liked the relaxed Kiwi style. He is a co-founder of a new group, Flying Kiwi Angels.

“In a typical angel what you’re looking for is someone who’s done it before, they’ve made enough money to invest and lose it all,” he said. “You want Angels that can share their experience and get you through.”

Steve Saunders, head of Tauranga’s Plus Group of agro-tech companies and a member of the Tauranga Enterprise Angels group, said he was an entrepreneur who invested in entrepreneurs.

“I love the passion of entrepreneurs,” he said.

Mr Saunders stressed the importance of staying connected worldwide and the importance for a New Zealand business to build global scale.

“You’ve got to get around the world and meet people,” he said.

He added that New Zealand had a golden ticket from a primary sector point of view because of its clean reputation.

“People want to be connected to what they eat. Safe food connectivity is our opportunity.”

Background

• American angel investor John Huston launched the first Ohio TechAngel Fund in 2004 with 50 investors, which became a founding member of the USA’s Angel Capital Association.

• Now with 340 members, OTAF is one of the world’s largest angel groups and recently launched its fourth sidecar fund at $7.3 million.

First published on nzherald.co.nz 14 October 2014

Entrepreneur flourishing in start-up mode

Angel investment providing potential growth capital to a returned Tauranga businessman, Paul Symes developing an electrically powered trailer boat loader.

Paul Symes is back in start-up mode.

After almost two decades building his previous CAD design firm 4D into a global company with 200-plus staff, he sold his stake and last year relocated from the Philippines to Tauranga to look for a different lifestyle and new opportunities.

There he connected with Tauranga realtor and boatie Lex Bacon, who had come up with an idea for an electrically-powered trailer boat loader. After rigorous due diligence on the concept, Mr Symes became the majority investor in Balex Marine, which is developing and marketing Mr Bacon’s invention as the Automatic Boat Loader. Industrial design firm Locus Research has also taken an equity share in the company.

The ABL prototype won the Hutchwilco NZ Boat Show Innovative Product Award earlier this year, and Balex is currently engaged in an $800,000 series A fund-raising round with angel investors.

“I miss having my old executive management team of 10 people who were absolutely fantastic,” said Mr Symes.
“It’s difficult not to have those resources available, so that’s a change and a challenge. But I’m really enjoying it.”

Mr Symes grew up in Hawera, before going to boarding school at New Plymouth’s Francis Douglas Memorial College.

In the sixth form he took up a draughting cadetship with the local office of engineering consultancy Holmes Consulting Group, moved to the company’s Wellington headquarters, and later worked for his father’s company Valley Steel.

But the 1987 sharemarket collapse hit the construction industry hard and Mr Symes decided to go to Victoria University, where he got a BCA in accounting, commercial law and IT. To support his studies, he worked for himself. By the time he finished his degree, he had a staff of 15, so he decided to stick with the business and incorporated it as 4D.

He had met his wife Joanne, who came from Christchurch, as did two of his partners, so the business was rebased in the South Island city.

The business did well with New Zealand projects, and 4D also began working across the Tasman. The game-changer for the company came in the late 1990s. An Australian competitor offered the firm the opportunity to join it on the massive Olympic Dam Copper Project, if it committed to investing in the expensive CAD design programme XSteel (now Tekla), which had become available for the first time on PC.

Mr Symes and his wife were forced to turn to family and friends to come up with the $150,000 cost of five of the only 2000 software licences available worldwide.

“It was a ridiculous amount of money to find at the time,” he said. “But everything we achieved resulted from that.”

The software enabled 4D to develop highly-detailed 3D designs for steel structures, down to the nut, bolt, washer and weld placements, which could then be fed directly into computer-controlled machinery to cut, drill and punch out the steel components for the build.

“We started getting involved in mega projects in Australia and were then approached by a company in Nova Scotia, Canada, to work on projects in the USA.”

Over the next decade the company became 90 per cent focused on the North American market. But it was running into increasing problems getting skilled staff. After evaluating China, India and Indonesia, the company settled on the Philippines for an offshore site and opened an office in Manila in 2006.

“The thing with Paul was that he really took the time to try and understand the way things worked in the Philippines and the culture of the Filipinos as well,” said Richard Cullen, now managing director of Te Aroha-based Cullen Engineering, who was part of 4D’s Manilla management team in the early days. “They really respected him.”

But after the firm expanded its Manila office, the global financial crisis kicked in around 2008, forcing a massive restructuring.

“We had come off the back of some massive projects that had tied up a lot of people, then we found ourselves with nothing to do and a really bleak outlook,”said Mr Symes.

The Christchurch office was wound down, and the business based in Manila with total staff cut by 30 per cent to less than 90. The restructuring cut costs by 55 per cent and led to the company growing by 100 per cent over the next two years, with staff eventually building back up to 215 last year.

Meanwhile, 4D Global Group was merged into Australian company PDC Group in 2011, and went on to win a number of significant steel design projects, including the World Trade Centre 3 – which used 30,000 tonnes of steel, equivalent to one-third of New Zealand’s annual steel consumption – as well as the new Google headquarters. Mr Symes was eventually bought out in March 2013.

Michelle Malcolm, a partner with business adviser Crowe Horwath in Tauranga, said Mr Symes knew what he wanted to do and where he wanted to go.

“His past expertise in growing businesses and taking them to where he has, shows in everything he does,” she said. “I have total faith Balex will be a success because you don’t have too many people who have an entrepreneurial head like his.”

Easy fit for dedicated boatie
Getting involved in the Automatic Boat Loader was to some extent a no-brainer for Paul Symes, who is a dedicated boatie and keen beach catamaran sailor.

He was heavily involved during his stint in Manila with the Philippine Inter-Island Sailing Foundation, which runs regattas throughout the archipelago. A member of Phinsaf’s board of directors in 2012-13, he chaired the 2010 Philippines Hobie Championships, and the 13th Philippines Hobie Challenge last year.

“And I went up and sailed again in March,” said Mr Symes. “I love tropical sailing.”

Mr Symes bought an 18ft (5.5m) Nacra catamaran when he returned to New Zealand but sold it again, and is in the market for something smaller that can be easily sailed by one person.

He and his wife Joanne have two daughters, Alannah, 17, and Danielle, 12.

Outside help had a major impact
Paul Symes said that one of the critical moments in his business career came in 2005, when he learned the lesson of working “on not in” the business.

He engaged the business advisory group at PriceWaterhouseCoopers in Christchurch and worked with them to more effectively structure 4D’s governance, which included bringing in an outside chairman.

“I worked closely with PWC in terms of strategic planning, getting really diligent about it. And that was really instrumental in paving the way forward.”

Part of that process included looking hard at pressing issues of the time, such as the need to find skilled staff, and resulted in the decision to open an offshore site in Manila.

“And I don’t know how much the key to success is attracting the right people — I’ve had absolutely fantastic people working with me.”

Richard Cullen, now managing director of Te Aroha-based Cullen Engineering, who was formerly in 4D’s Manila management team, said Mr Symes was highly organised and motivated.

“He has the ability to motivate his team and to share the vision of the business with his team so that everyone’s going in the same direction,” he said. “He’s very good at dealing with people and very knowledgeable.”

Michelle Malcolm, a partner with business advisers Crowe Horwath, said Mr Symes was really well- informed and well-prepared. “His minutes for board meetings are probably the best I’ve ever seen,” she said.

Mr Symes paid tribute to the local business community for the support he’d received since relocating to Tauranga.

“They’ve put their hands up to help, which is humbling and refreshing,” he said.

“The secret of Tauranga’s success, when the rest of the regions are struggling, is that there’s such a vibrant group of people here that are absolutely passionate about making this a successful business community.”

First published on nzherald.co.nz 26 Sept 2014

AngelSummit14

Delivering data to farmers’ pockets

Tags: Entrepreneur

Angels support “mum-treprenuer” of the year, Bridgit Hawkins and her business Regen and in doing so help farmers make better, faster decisions to protect the environment and build better businesses.

These days farmers are as likely to have a smartphone or tablet in their hands as they are a dog at their heels.

As technology becomes an integral part of managing the land, Wellington entrepreneur Bridgit Hawkins is building ReGen, an enterprise texting daily data to farmers to take the guesswork out of key on-farm operations.

Read more

Startup driving cystic fibrosis drug to market

Andrea Miller is used to facing tough situations. As a senior army officer for 22 years, she’s faced all sorts of challenges, including a UN peacekeeping tour to East Timor. Now, as the chief executive of Auckland-based startup company Breathe Easy, she’s fighting for the 75,000 people around the world who suffer from cystic fibrosis (CF), including her 26-year-old daughter, Sarah.

CF is a chronic genetic illness that affects the lungs and digestive system. It’s debilitating and destructive, says Miller. “It’s a tough foe. Sadly the prognosis is really grim.

“It’s improving now, but the average life expectancy is still only in the 30s.”

Sufferers have thick and sticky mucus in their lungs, which settles and clogs the small airways and causes recurrent lung infections.

Miller’s partners in Breathe Easy are Professor Bob Elliott, who Miller first met more than two decades ago when he was her daughter’s paediatrician, and Auckland-based life sciences investor and champion Brent Ogilvie.

Through years of self-education, attending overseas medical conferences and completing an internship with the Cystic Fibrosis Foundation in the US, she’s gotten to know Elliott and Ogilvie pretty well, she says.

Breathe Easy came about after Professor Elliott invented a new drug called Citramel, which melts the biofilms or mucus obstructing the effectiveness of existing antibiotics and the patient’s own immune system in dealing with CF.

With the backing of Ogilvie’s life science investment company Pacific Channel, Ogilvie and Elliott formed Breathe Easy to develop Elliott’s findings into a useable product and bring it to market with Miller’s help.

Since then Breathe Easy has gained regulatory and ethical approvals for the crucial Phase I/IIa clinical trial to test its efficacy and safety. The trial is due to start in early 2015 at the Christchurch Clinical Studies Trust.

It’s potentially a huge breakthrough for the medical world and an important milestone for New Zealand’s medical innovation as this will be the first CF product to enter clinical trials that was invented here and will be manufactured here. “At Pacific Channel we look for both a high potential social good as well as high potential financial returns and Breathe Easy embodies both, very much,” says Ogilvie.

Pacific Channel and its network of angel (early-stage) investors have already pumped in “a few hundred thousand dollars” to get to this stage, says Ogilvie, but Breathe Easy needs another $1.5 million to complete the clinical trial to test Citramel and move the product forward.

It’s a lot of money, but the task is a little less daunting because CF is classified as an “orphan” disease – a disease that affects only a relatively small percentage of the population – and as such can get fast-track approval with important international regulators such as the US Food and Drug Administration (FDA).

“Drug development is tough, and doing it from New Zealand is very tough. However, the beauty of working on an orphan drug, where the market for the number of patients is obviously much smaller than something like heart disease, for example, allows for faster and lower-cost drug development,” said Ogilvie.

Running the clinical trials in New Zealand is also a lower-cost alternative to conducting the trials in Europe or the US, plus it has the added benefit of spreading knowledge and awareness about CF and the treatment possibilities among New Zealand’s medical fraternity, says Miller.

Breathe Easy also believes that Citramel may benefit those with diseases such as chronic obstructive pulmonary disease, which affects around 330 million people, so the potential is enormous, she adds.

“It’s a sensational story! Rather than the awful situation of having to sit and wait for the illness to take its toll, here we are getting up, taking action, and developing a medication that could be really helpful in the fight against CF.”

Produced in conjunction with the Angel Association of New Zealand.

First published on NZHerald.co.nz Thursday Sep 25, 2014

Borton & Sons Inc. Adds Koru, Rockit Apples to lineup

This season, Borton & Sons Inc., headquartered in Yakima, WA, plans to add two new apple varieties to its manifest. The company is a premium grower, packer and shipper of high-quality apples, pears and cherries with more than a century of industry expertise. The fourth generation of family members currently spearheads operations.

“We have started marketing two new varietals out of New Zealand with intentions in growing both here in Washington state,” said Lindsay Ehlis, part of the company’s sales and marketing team. “The first apple is the Koru. Along with Oneonta and New York Apple Sales, Borton Fruit has started marketing this unique variety in the United States. Consumer testing has proven to be overwhelmingly positive thus far. At this time, we are carrying limited volume out of New Zealand while commercial U.S. planting is under way.

“The second variety is the Rockit apple, which we are marketing here in the U.S. along with Chelan Fresh Marketing,” she continued. “These snack-sized apples provide a new healthy eating option on the go. The unique tubed packaging has already seen positive feedback from many industry veterans that have come in contact with the variety. Borton plans to start planting the Rockit here in Washington state next spring.”

Byron Borton, the company’s chief visionary officer, said conditions during the current apple production season have been favorable.

“The first varieties to come off the tree are Ginger Golds and Galas, which we have started picking this August,” he said. “We will be picking apples through November ending with our Cripps Pink/Pink Lady apples.

“Overall, quality is looking fantastic,” he commented. “Size will likely be up one full count across the state from normal years. The great weather early in the season made the apples jump out of the shoot. But perhaps the heat we have had the past three to four weeks may have slowed the sizing down a tad.”

Borton said the company is finalizing a new apple box “that will be one of the strongest in the industry. We have taken our approach to providing the market with the best fruit possible, and applied it to our full supply chain and packaging. This packaging investment ensures that the fruit will retain its superior quality when it arrives on customers’ shelves.”

The company markets apples under the “Apple Tree,” “Sno Chief,” “Yakima Chief” and “Sno Crisp” labels. “We do not grow organic produce, but do source some organics for our customers in small volumes to help fill when needed,” said Eric Borton, vice president of international sales and marketing. “Demand has grown some. But the greatest demand for apples still remains in traditionally grown fruit by a large margin because of its higher overall quality, yield and consistency.”

Borton Fruit markets apples to customers throughout the globe, and Eric Borton said, “We are continually seeking development of new markets and export opportunities.”

The company has a number of seasonal and nonseasonal marketing programs in place that have been highly successful. “One we will be focusing on in the next couple months will be our NFL Fuel Up to Play 60 program,” Ehlis said. “It’s great timing with the new school year beginning as well as the NFL kicking off. The program was designed to tackle childhood obesity by engaging youth to take action for their own health by implementing long-term, positive changes for themselves and their schools, starting with healthy snacks and foods and 60 minutes a day of exercise. This will be Borton’s third year being a part of this movement.”

On the facilities size, Ehlis said some improvements were made this past year. “We’ve implemented a new racking system to improve staging area at our main plant,” she told The Produce News. “This is allowing us to get ahead of orders and turn our truck loading times around much quicker. With an internal Loading Dock Analysis reporting process, we have improved the overall wait time at our facility by about 35 percent already, and are working toward making that an even better percentage. In addition to this staging and loading process, we’ve also designed a new truckers’ lounge for the drivers while they are here.”

First published on Enterprise Angels 15th September 2014

AngelSummit14

Kiwi trailblazers plot success with mapping tool

Online research can be a messy process. Anyone who’s ever searched for something online, only to find themselves hours later, hazy and buried under dozens of open browser tabs, will have some idea of the impetus behind Wellington software startup Twingl.

Trailblazer, Twingl’s first product, is a web browser add-on that automatically tracks and visualises the various paths people take as they follow their nose through any form of online research.

The obvious application for such a product is the education market, which is exactly where Twingl and the company’s backers are taking the product first.

Andy Wilkinson, Twingl’s founding chief executive, was in the late stages of a multi-school pilot programme and on the verge of launching a nationwide school holiday Minecraft competition when he took time out to explain how Trailblazer takes the donkey work out of documenting the research process.

“Trailblazer makes your learning visible. Say you’re researching something new – it might be a paper at uni or an overseas holiday – and you end up with dozens of open browser tabs, bookmarks and a Word document full of notes, well we’ve built a browser extension that turns all those tabs into a map which shows you why that tab is open and where to go next. It also automatically organises the notes you take. And in schools, your teacher will be able to see your map as well, so they can become better at teaching you how to research more effectively online.”

Wilkinson’s belief that humans are spatial thinkers kicked off the idea for Trailblazer.

“The internet doesn’t give you a very good sense of space, it’s almost edgeless in a way and anything we can do to help shape and adapt that content to the way our brains actually work is a good thing.”

Twingl itself is a product of New Zealand’s flourishing startup ecosystem, beginning with Wellington Startup Weekend in 2013 and progressing to theLightning Lab business accelerator programme this year, where Wilkinson and his fellow co-founders, Greg Signal and Matt Kennedy, raised $100,000 in seed funding to develop Trailblazer.

First published on nzherald.co.nz on 18th September 2014

AngelSummit14

Angels lifting the Far North higher

The Angel Assn, with backup from Ice Angels is delighted to support the creation of an angel network in Northland.

Northland start-up companies could now get their hands on investments of up to $100,000 as an Angel Network is ready to spread an investment mantle across the region, with up to 20 high net worth investors poised to give wings to new business. Christine Allen looks at the Dragon’s Den style divine intervention blossoming in the region

There is nothing supernatural about the investors that will consider the business pitches of two Northland companies next month – they just have the capital that start-ups need and are hungry for some tasty returns.
The New Zealand Angel Association is operating networks in Auckland, Tauranga, Wellington and Queenstown, connecting investors with early stage companies.

Through Ice Angels in Auckland, economic development group Northland Inc has so far engaged up to 20 investors in Northland.

Two Whangarei companies, and one from Auckland, will face the panel of Northland angels in October. The companies have IT-based pitches and have been working with Northland Inc to perfect their applications before meeting investors.
Their training has focused on due diligence, business opportunities and presentation skills.
Suse Reynolds, executive director of the New Zealand Angel Association, said individual angels invest between $5000 and $100,000 in any one deal.

They often have up to 20 deals on the go at any one time and accept that 50 per cent of deals will flop.
“Angel investing is such a powerful thing to do for a local economy.
She said some angels preferred to remain under the radar.
“But others are very happy to be ev-angel-ists for the cause.”

Mostly, they are looking for a meaningful return. The association offer networks and also funds, which companies can apply for, with or without opportunities for mentoring and strategic influence.
Currently, angels must earn a net $200,000 per year for over two years or have access to assets worth $2 million or more.
Financial Markets Authority reforms would soon allow smaller investors to come on board, thus expanding angel networks for smaller deals.

Technology is one of the network’s preferred areas of investment. Networks are also accredited with the Seed Co-Investment Fund, allowing for potential for qualifying transactions to receive the matching Government funds.
Joseph Stuart, general manager of business growth at Northland Inc said as 25 per cent of New Zealand’s top 50 rich listers had homes or holiday in the east coast of Northland, we have plenty of angels.
Mr Stuart said Northland offered an attractive lifestyle to business people, which was perhaps why we had so many potential investors here.

“Lots of wealthy New Zealanders come here on holidays, but have they been approached to become investors and mentors?
“Yes they are on holidays, but businesspeople love a good investment opportunity.”

First published on nzherald.co.nz 11 Sept 2014

Angel backed Lightning Lab graduate, Twingl switches tack to create a Google Chrome plugin

Software startup Twingl, which raised $100,000 from the Lighting Lab accelerator programme, has abandoned plans to develop its education track tool as a standalone product in favour of a plug-in for Google’s Chrome web browser.

The Wellington-based company, whose tool tracks a student’s learning process, raised more than its targeted $90,000 from a syndicate of angel investors through AngelHQ and some independent investors, chief executive Andy Wilkinson told BusinessDesk. The company initially planned to build a standalone product and had been working through a number of fixes, before feedback from users encouraged a switch to developing an extension on Google’s Chrome web browser.

Read more

Angels fly south to support Southern innovation: MEPO reaps first reward

Mepo, an innovative platform designed to help teachers and students collaborate, developed by 18 year old, self-taught web designer and developer Josh Harrington, took home $1,000 cash and the support and encouragement of New Zealand’s angel sector in the Invercargill Startup Pitch Competition.

Angels are businesspeople who invest their money and often their time in early-stage and startup companies in order to help them grow and become the next generation of employers and innovators.

The pitch competition was organised to sit between Invercargill’s Startup Weekend, where groups come together to conceive an idea, test the concept and develop a prototype to demonstrate before a group of judges in just 54 hours, and Startup Week, where 40 to 60 post graduate students from the Southern Institute of Technology’s (SIT) business programme attempt to build ideas into businesses in a week. Both are organised and run by Innovate Invercargill, a private enterprise, designed to encourage entrepreneurship in Southland.

Marcel van den Assum, chair of the Angel Association of New Zealand (AANZ), an angel investor and board member of several startup companies, was a judge for this year’s Startup Weekend and a speaker, mentor and judge at the following pitch competition. He presented AANZ’s cheque to Josh Harrington and his team and says he was very impressed by the level of innovation, entrepreneurship and enthusiasm for all thing startup in Invercargill.

“It’s heartening to see the work that’s going on to create a thriving startup ecosystem in Southland. Innovate Invercargill should be congratulated for making this happen. I was impressed by many of the Startup Weekend ideas and by Josh and his team’s pitch for funds for Mepo. If they keep developing the platform the way they have been, perhaps they will be pitching for funds for real in the not too distant future.”

Josh Harrington formed Mepo at Invercargill’s inaugural Startup Weekend in August last year. XingDong Yan, co-founder of Innovate Invercargill and chief executive of JCCA Chartered Accountants and Business Consultants, says it was fantastic to see Josh back this year at the pitch competition. “Josh is truly an inspiration. Through Mepo he is determined to build a better online learning management system for students. It is a great achievement to have taken an idea borne from last year’s Startup Weekend and developed it to such a degree that it was able to win this year’s pitch competition.”

Josh was also part of this year’s winning Startup Weekend team for Stockclock, an intuitive app developed by Diego Brandao, which notifies manual stock traders when to sell their stocks.

Josh says both weekends and the pitch competition have been incredible learning experiences. “I’ve met some amazing people and the mentors have helped me understand what goes into pitches and what investors look for in a startup. The first Startup Weekend also helped me get a different point of view on my idea and gave me the opportunity to meet my two partners in Mepo, Nik (Bielski) and Neil (Riley) who have been working with me ever since.”

Winning the pitch award was particularly special because it validates all the hard work the team have put into Mepo since developing the concept last year, says Josh.

“Entrepreneurs often lose motivation, which I know from my own experience, so it’s important to seek and receive feedback, especially from Angel investors such as Marcel who probably get contacted by startups on a daily basis. It’s that positive feedback or even just a different point of view that pushes an entrepreneur to go the extra mile; to keep their inner fire burning.”

Josh says he’ll be putting the prize money towards server costs, branding and trialling Mepo through New Zealand.

Southland’s startup ecosystem is really beginning to take shape says XingDong. “There are lots of elements involved in building an ecosystem to support a thriving startup community. Part of this is building relationships with organisations like the Angel Association and growing our own local network of angels to support these startups when they wish to take that next step. Collaboration is key.”

Another working to help Southland’s budding entrepreneurial ecosystem thrive and create a local network of Angel investors is Sean Woodward, a partner with Preston Russell Law, who says the local Chamber of Commerce and Employers Association have established a joint venture with SIT to investigate and establish an innovation support centre for local business in Southland.

“As part of that access to investment needs to be improved. So the Chamber is aiming to work with other enterprises, like Innovate Invercargill and the AANZ, to develop a formal angel network over the next six to 12 months.”

Woodward says the support and enthusiasm AANZ has shown towards Southland’s startup sector is instrumental in helping to grow the region’s innovation community.

AngelSummit14

For more information, please contact:

Marcel van den Assum on mob: 021 963 459 or email: [email protected]; or

Suse Reynolds , AANZ executive director on mob: 021 490 974 or email: [email protected]

Xingdong Yan, CEO, JCCA on T: 03 214 4036, M: 021 020 12076 or E: [email protected]

Sean Woodward, Partner, Preston Russell Law on T: 03 211 2192 or E: [email protected]

Josh Harrington, founder Mepo on M: 027 930 8315 or E: [email protected]

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; to support the angel networks and help create new networks; to promote the growth of angel investment in New Zealand by encouraging and educating entrepreneurs, new angel investors and angel groups; and to ensure the ongoing success of the angel movement through developing industry strategy, encouraging collaboration and educating the wider New Zealand public about the importance of angel investing in growing our economy. AANZ currently has 13 members representing more than 600 individual angels associated with New Zealand’s key angel networks and funds. Recent NZ Venture Investment Fund data revealed angels have invested almost $NZ300 million in over 600 deals in the last 7 years. For more, please visit: http://www.angelassociation.co.nz/

The power of angels and accelerators propelling a high growth start up onwards and upwards

Software start-up CoachSeek raised more than $450,000 after going through the Lighting Lab accelerator programme, and plans to knuckle down and develop its product before ramping up marketing efforts.

The Auckland-based start-up, whose software helps sports coaches manage their programmes, raised more than its targeted $450,000 from a syndicate of angel investors through Ice Angels and AngelHQ, chief executive Ian Bishop told BusinessDesk, without being more specific. CoachSeek made the pitch for funds at Lightning Lab’s May demonstration day, with $100,000 already committed at a pre-money valuation of $1 million.

Read more

 

AngelSummit14

Enterprise Angels release their first fund

Enterprise Angels have just released their first Fund (EA Fund 1). This is an exciting opportunity for anyone wanting to invest in seed and start up companies, and will be particularly attractive to those without the expertise, time or inclination to invest directly.  EA Fund 1 is open to all eligible investors from 5 August to 3 October 2014.

The Fund has been created for two main reasons:

  1. To enhance investor returns. The best way to improve returns is to develop a portfolio of investments; the Fund is an efficient way for investors to achieve this. Evidence shows that investors that invest through Angel groups and funds make better investments than Angels investing alone, because of better due diligence and negotiating strength, more professional deal documentation, and the sharing of workload.
  2. To improve the investment decision process and therefore improve the quality of investment opportunities Enterprise Angels has access to and the investment decisions made.

Key Points:

  • The minimum size of the Fund will be $1 million.
  • The minimum individual investment is $25k, payable in tranches.
  • The Fund will invest in seed and startup stage companies throughout New Zealand with a focus on the following industries: high growth potential companies innovating primarily in the life sciences (dairy, agriculture, horticulture, animal health and productivity), food and technology equipment industries (engineered devices often being applied in the above life science sectors).

If you are interested in finding out more, check out the Enterprise Angels website.

We will be holding EA Fund 1 presentations in Tauranga, Taupo, Rotorua and Hamilton throughout the offer period.  Register your interest to attend now by emailing [email protected].

Eight Wire cloud solution heads for the US

Another example of the stunning companies where angel investors have the opportunity to contribute their enthusiasm, experience and networks.

A New Zealand-based data management startup aiming to revolutionise the way businesses move data to the cloud has just launched in the US after a whirlwind 11 months in its own backyard.

Read more

 

AngelSummit14

Equity crowdfunders, not your everyday investors

The Angel Assn is delighted to see Snowball and PledgeMe enter the early stage funding market. The more sources of capital there are for our stunning high growth companies, the better!!

A week after new Zealand’s first foray into equity crowd funding, proponents say the signs are good this could provide a much-needed additional funding source for SMEs.

Overseas, equity crowdfunding has been able to provide an explosive revenue jump for companies seeking to raise capital, says Josh Daniell, head of platform and investor growth for equity crowdfundingplatform Snowball Effect.

Read more

AngelSummit14

Lead Partners

NZTE NZVIF PWC

Expert Partner

AVID “FNZC.jpg”

AANZ Summit Sponsors

Callaghan Innovation “UniServices” Kiwinet “Spark”