NZX backs NZ’s growing angel movement

NZX, the operator of New Zealand’s stock exchange, has thrown its support in behind New Zealand’s growing angel movement, by sponsoring the Angel Association of New Zealand (AANZ).

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.

This partnership between AANZ and NZX is an important one as it not only provides extra resource to help New Zealand angels develop their skills and networks on a national basis, it also strengthens ties for companies-backed by angel investors with the more formal capital markets, says Marcel van den Assum, an angel investor and chairman of the AANZ.

“We’re delighted to announce this sponsorship. Angel HQ, the angel network I’ve been associated with since its inception, launched at NZX six years ago with the aspiration that ventures funded at this level would become opportunities for a wider network of investors to support through NZX. There is much angel-backed companies can learn from the people at NZX and from New Zealand’s many listed companies, their directors and their shareholders, many of whom are also angel investors. We look forward to strengthening our relationship still further over the coming years and providing a pipeline of companies for the new NXT market that NZX will soon launch.”

Aaron Jenkins, NZX’s Head of Markets says NZX’s decision to support the Angel Association was a logical one. “We have mutual and complementary goals. We both want to encourage young New Zealand businesses to ‘take on the world’ for the economic benefit of all New Zealanders. The Angel Association is a key part of the critical breeding ground for New Zealand businesses as well as a representative body of educated investors. These are both important components of our capital markets and particularly NZX’s soon to launch NXT market.

“Ideally, once they’ve proven their abilities, we’d like to see a greater proportion of these growing businesses coming to our public markets to raise the capital they need to fuel the next stages of their growth. NZX also has a focus on improving investor literacy among everyday New Zealanders to encourage more people to take an interest in New Zealand’s capital markets and the businesses that rely on those markets.”

 

For more information on the AANZ or on early stage companies, 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]
For more information about NZX, please contact:

Kate McLaughlin, Head of Communications, NZX on T: 09 3093654, M: 027 533 4529 or E: [email protected]

 

 

Background information

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/

 

NZX

NZX builds and operates capital, risk and commodity markets and the infrastructure required to support them. NZX provides high quality information, data and tools to support business decision making. It aims to make a meaningful difference to wealth creation for its shareholders and the individuals, businesses and economies in which it operates.

For more, please visit: http://www.nzxgroup.com/

Next step for NZX

The AANZ welcomes the launch of the new NZX platform which offers a realistic option for follow on funding for angel backed companies

The stock exchange’s new market for smaller, high growth companies is expected to launch before the end of the year and will be called NXT (Next).

Read more

Serial entrepreneur Linc Gasking acknowledges the power of exits to fire more great NZ startups

Wellington startup 8i, whose virtual reality technology uses the Oculus Rift headset to immerse viewers in the entertainment they’re viewing, has secured a million dollars of new investment to seize on what it calls a huge global commercial opportunity.

UK analysts KZERO estimates there will be 171 million virtual reality users worldwide by 2018 and 8i co-founder and CEO Linc Gasking says giants like Facebook (which bought Oculus VR earlier this year), Sony and Samsung are rushing to bring virtual reality hardware to market.

Read more

AngelSummit14

Angels provide the fuel for Rockit Apples to hit world markets

It took a decision from the United Nations before Havelock North grower Phil Alison could call his Rockit miniature apples, apples.

Slightly bigger than a golf ball, the New Zealand-grown variety looks and tastes like a normal apple but was too small to fit the UN’s minimum size grade.

Read more

AngelSummit14

 

Interested in learning what the Canadians are up to? They have introduced a new visa to attract angel and entrepreneurial talent

Canada’s Citizenship and Immigration Minister, Chris Alexander, met with Kitchener-Waterloo-based business incubator Communitech and other business leaders to discuss the Start-up Visa and its potential for attracting entrepreneurs to Canada who have the vision and ability to build innovative companies that can create jobs and long-term prosperity.

The roundtable aimed to build on the momentum of Alexander’s visit to GrowLab Ventures in Vancouver last month, where he welcomed the first two successful applicants under Canada’s Start-up Visa Program. Alexander discussed the importance of the program with a number of local business leaders and encouraged organizations to continue their efforts in identifying exciting start-up opportunities, as well as the dynamic entrepreneurs behind them, with the help of the Start-up Visa.

Read more

AngelSummit14

 

 

$2.2m Investment from Angels for Lightning Lab startups

Five of the nine start-ups to go through Lightning Lab’s digital accelerator programme have raised a combined $2.2 million of seed funding, more than what they were seeking at a demonstration day in May.

The five successful groups, Common Ledger, Cloud Cannon, GlassJar, CoachSeek and Twingl, were seeking $1.94 million to support the commercial ambitions for their respective software-based ideas, of which $740,000 had already been committed before their May 28 presentations. Lightning Lab’s programme seeks to prepare early stage companies to pitch to investors.
“I was delighted to see that all the teams who pitched on Demo Day 2014 matched the best of what last year had to offer,” angel investor Trevor Dickinson said in a statement. “It was therefore no surprise that the 2014 graduates have attracted serious interest from experienced angel and venture capital investors.”

Last month the government-backed New Zealand Venture Investment Fund said it was too early to judge the success of its Seed Co-Investment Fund, which backs early-stage firms alongside angel investors and was set up in 2006.

In the opening address for the Lightning Lab event in May, Angel Association chairman Marcel van den Assum, who was also part of the successful sale of local software firm GreenButton, urged angel investors to broaden their portfolios if they wanted to improve their chances of a return, with too many backers relying overly on a small number of ventures.

First published on nbr.co.nz 12 August 2014

The Moxie Sessions: Girls can do anything – so how come they’re not?

Every month, The Moxie Sessions bring together a small group of Auckland business thinkers to discuss ways New Zealand can take advantage of the internet and boost its competitiveness. For more, see themoxiesessions.co.nz.  This month, we returned to technology and innovation precinct GridAKL to ask:  have we taken seriously women’s participation in business and society as accelerants for New Zealand’s success or are we still treating it as a ‘women’s’ or ‘diversity’ issue?  What’s to be gained and how do we get there faster, together?

Read more

Positive feedback for Angel sidecar fund

Tauranga’s Enterprise Angels’ investor group last night formally launched its first sidecar fund EA 1, targeted from $1 million to $5 million. Angel group sidecar funds typically operate alongside and co-invest in the same deals as angel group members.

“Angel investors have to create a portfolio of up to 10 or so investments because of the high risk nature of early stage investing,” said Enterprise Angels executive director Bill Murphy.

“And it can be quite a challenge for some individual investors to assess each idea as it comes up and make a call on whether or not to invest. The beauty of the fund is that it will operate alongside the angel investors, so while angel members are investing individually in deals, the fund is investing alongside them and fund shareholders can quickly build up a portfolio.”

EA 1 will be pitched to both the current 123 members of Enterprise Angels and also to qualified investors outside the group. It will be structured as a limited partnership and will be a closed fund – that is, once the fund is closed for initial subscriptions, it will not take further investments – and proceeds from liquidating investments would be distributed to investors not returned to the fund.
The minimum fund size will be $1 million, but Mr Murphy said there had been positive feedback from members and he expected that the fund would eventually come in at between $2 million to $5 million. Because the fund is too small to justify having a full time investment manager, the Enterprise Angels board will also act as general partner in managing the fund. There is currently only one other similar angel group sidecar fund in New Zealand, run by the Manawatu angels group MIGAngels.

Neil Craig, who chairs Enterprise Angels, said that most angel groups worldwide had sidecar funds.

“A lot of people want to enter the space, who qualify as wealthy and or experienced, but don’t really have the confidence to make individual decisions on these types of investments.”

“The sidecar fund gives them a leg up in building a diversified portfolio.

“And it gives the angel group more firepower in terms of funding investments, particularly local ones, so we can bulk up and make a meaningful contribution to an investee company’s equity.”

Mr Murphy said the fund would give outside investors all of the advantages of the angel group members.

And as managers, the Enterprise Angels board had access to the members, many of whom had a real depth of experience in specific sectors.

“Those outside of Enterprise Angels will be able to benefit from that level of expertise and experience in making investment decisions,” he said.

Enterprise Angels sidecar fund – EA 1

Expected size – $1 to $5 million

Minimum subscription – $25,000, with further subscriptions in multiples of $5000

Application fee – 2 per cent of committed capital

Annual management – 2 per cent of committed capital. No exit or carry fees

Term – up to 10 years

First published on nzherald.co.nz 6 August 2014

Judges best in business

Experienced business leaders are the judges at Hawke’s Bay’s inaugural Startup Weekend, beginning Friday.

The three-day event will be held at the EIT campus in Taradale, where people with technology-related ideas can pitch their concepts, form teams, build prototypes, be judged, and may even find funding to launch their company.

Judges are Sir Graeme Avery, Suse Reynolds and Michaela Vodanovich.

Sir Graeme owns Sileni Estates and spent 33 years with global publishing business Adis International. Fourteen years ago he founded Hawke’s Bay Wine Country Tourism Association and Hawke’s Bay Food Group, kicking off the highly successful Farmers Market movement in New Zealand.

Ms Reynolds is the founder of Angel HQ, the Wellington region’s angel network. She was formerly the chief operating officer and investment general manager at Grow Wellington.

Ms Vodanovich is manager of the Hawke’s Bay branch of The Icehouse. She has held a variety of general management positions in a range of industries.

“This is going to be an action-packed, fast-paced weekend and a great opportunity for budding entrepreneurs to test their ideas and gain some valuable experience in starting a business from a germ of an idea. Startup weekend will enable individuals to cut their teeth in a low-risk, supportive environment.”

First published in the nzherlad.co.nz 29 July 2014

Big lift for Kiwi rocket firm

Silicon Valley fund backs NZ rocket-maker’s bold bid to slash satellite costs.

The New Zealand aerospace firm planning to launch a rocket to carry satellites into low earth orbit for a fraction of the cost of competitors has the backing of a Silicon Valley venture capital fund keen to build the company into a niche leader in the space race.

Khosla Ventures was revealed as the principal backer of Auckland company Rocket Lab which yesterday unveiled a prototype of its Electron carbon composite rocket, which it aims to launch next year.

Rocket Lab has some way to go before it can blast off – it has to find a launch site in New Zealand, patent its engine technology and build the final vehicle.

Founder Peter Beck said he was confident of making next year’s deadline, but was not prepared to give a firm date.

“We like to over-deliver,” he said after the unveiling of the Electron at simultaneous events in Auckland and the United States.

The materials in the fuselage and fuel tanks of the rocket are similar to those in fuel-efficient airliners – light and strong.

Beck said this meant his vehicle could be much smaller and lighter than those of competitors.

The size and weight of satellite cargo was also shrinking.

He said the 18m Electron was less than a third the size of average rockets that took satellites into space, and could be launched up to once a week.

Rocket Lab says the average cost of a dedicated satellite launch system is $155 million, but it will be able to do the same job for $5.7 million.

The seven-year-old company has received $25 million of government funding over five years.

It has also had money from The Warehouse founder Sir Stephen Tindall’s angel investment fund and from Khosla.

Neither Beck nor Khosla chief technology officer and operating partner Sven Strohband was willing to disclose the extent of the venture capital fund’s support.

The fund was started by the billionaire co-founder of Sun Microsystems, Vinod Khosla, who is worth $1.7 billion, according to Forbes.

Strohband – who said the Khosla fund had $3.4 billion under management – has high hopes for the New Zealand rocket company.

“We invest in very young companies and try to build very large companies at the end of it,” he said.

According to its website Khosla also supports the New Zealand-founded bio-fuel company LanzaTech.

Strohband said Rocket Lab could start a revolution.

“If you wanted to get into space you had to ride-share with the big boys, go wherever they wanted to go and when they wanted to go,” he explained.

Beck said Rocket Lab hoped to more than double its staff of 25.

“Our vision at Rocket Lab is to make space commercially viable and more accessible than ever before, doing what the Ford Model T did for consumer automobiles,” Beck said. “This technology will really open space for business.”

Electron could be launched from a site the size of a rugby field. The site required a northeasterly aspect and had to be clear of populated areas.

He said there was a shortlist of possible locations for a space port, and any regions interested in hosting the facility should get in touch.

Rocket Lab has successfully launched smaller vehicles from New Zealand sites, including one which flew to an altitude of 100km.

First published on nzherald.co.nz 30 July 2014

Angels help Irrigation idea find fertile ground

The world is running out of water. Demand has grown a staggering 60 per cent every decade for the past 50 years, says Isaac Bentwich, chief executive and chairman of a new Wellington-based irrigation software company.

An Israeli-turned-Kiwi entrepreneur, Bentwich should know, hailing from one of the planet’s drier regions. So perhaps it’s not surprising he was struck by the potential of the technology of his company, Varigate.

The concept is simple, he says. Land is not homogeneous, and hence water absorption and its availability to plants varies greatly across a field.

“Current irrigation systems waste a lot of water because they water fields evenly. Our uniqueness and focus is on ‘listening to the ground’, and providing each part of a field with exactly the right amount of water that it needs, at any given time.”

Varigate’s software technology works with automated irrigation systems to adjust spray levels in response to sensors in the ground, reducing the water needed to irrigate large fields by up to 20 per cent.

Bentwich stumbled across the seeds of Varigate’s technology at Landcare Research when visiting New Zealand in 2010. Landcare was doing some pioneering work on the management of terrestrial biodiversity and land resources.

“Its highly advanced technological approach to eco troubleshooting was inspiring,” says Bentwich, a former commercialisation consultant for Auckland University’s commercialisation arm, Uniservices, and the founder and successful seller of two Israeli technology companies.

“When I first visited New Zealand I was wowed by the strength of innovation here, but I also saw that there was room for significant improvement in the commercialisation of that innovation.”

Determined to commercialise Varigate’s technology and requiring capital and support to do so, Bentwich hooked up with Marcel van den Assum, an early-stage company or “angel” investor and chair of the New Zealand Angel Association, through mutual friend Dean Tilyard, head of the Palmerston North-based business incubator the BioCommerce Centre.

The Varigate system requires the user to download a mobile app and position three wireless sensors in the ground. The sensors send readings to the Varigate cloud.

The patent-pending pattern-recognition analysis methodology coupled with the software then studies a field’s condition and soil structure to determine how much water is required for a specific part of a field and automatically instructs the irrigation system to water where it’s needed.

The user can study irrigation field maps on a cellphone and change settings as needed.

For farmers and landowners, the appeal is obvious, Bentwich says. It’s “simple, cost-effective and low-maintenance” because it solves the puzzle of how to make significant water cost savings while increasing crop and dairy yield.

Van den Assum was first struck by Varigate’s strong intellectual property (IP) portfolio and Bentwich’s impressive track record. “It’s New Zealand IP which is exciting, but I was also attracted by the aspirational story around the planet’s water shortage and the demands on water globally.

“Plus Isaac is someone who has the global expertise to commercialise it effectively. It’s a good proposition for investment in New Zealand but I believe it will get world attention from an investment point of view.”

Varigate raised more than $1.5 million from investors this year.

Small, privately owned farms are embracing the technology and form the backbone of the customer body, van den Assum says.

“But while New Zealand is at the forefront of agricultural technology innovation, the truth is water’s commercial value is still not appreciated here,” he says. “So Varigate is not going to build a significant revenue stream in New Zealand.

“It’s going to be enough to validate the technology and show customers to recognise its value, but the big markets are in the massive arid regions of USA, China and the Middle East.”

Both van den Assum and Bentwich agree it’s hard to argue against any innovation that helps to save the Earth’s haemorrhaging water stocks.

“More than 40 per cent of the world’s food is provided by irrigated agriculture,” Bentwich says.

Produced in conjunction with the Angel Association of New Zealand.

Watering can-do
• Varigate uses a mobile app and sensors in the ground to measure where water is needed and how much.
• Irrigation systems can then deliver water only to the areas that need it based on the soil structure and condition.
• Adjustments can be made using the app from anywhere.
• Described as simple, cost-effective and low-maintenance.

First published on nzherald.co.nz 24 July 2014

 

 

Angels help skincare pioneer fly

Early investment allowing Zeosoft to prove product claims has helped secure backing for international leap.

Patience and a lot of persistence have paid off for natural skin cleaning company Zeosoft after it gained significant backing from the Bay of Plenty’s Enterprise Angels and early stage investment group Movac.

Soft zeolites, formed from volcanic activity and mined near Tokoroa are the key ingredient of Zeosoft’s products.

“It’s a very unique ingredient. And we’re the first to patent its use on skin,” said Zeosoft chief executive Phil Connolly. “Thanks to our initial investment from Movac we’ve now got independent proof of the power of soft zeolites to remove contaminants, including heavy metals and toxins, and help repair skin, while still being soft and dermatologically safe.”

Movac first invested in Zeosoft in 2010 to help the company’s founders prove the power of their innovative skin-cleaning ingredient. It was this research that helped seal the deal for the Bay of Plenty angel investors, says Movac’s Mark Vivian.

Zeosoft raised $8 million in this latest funding round and plans to use the capital to fast-track its way into international markets.

It currently manufactures heavy-duty hand soap, everyday handwash and household cleaners, with personal care, cosmetics and derma product on the cards. Its initial targets are the automotive and engineering industries in Britain, Europe and the Middle East.

To try to speed its way it has joined forces with global leaders Unilever and Stevenson’s Group for product formulation and development.

“Nutting out these relationships is key for us. Everything’s on a completely different scale in the UK, so any mistake is accentuated,” Connolly said.

Vivian said he had high hopes for Zeosoft.

“They’re making excellent progress in the UK market where there’s growing consideration among industrial organisations about the impact products have on their employees, customers and the environment.”

Strong relationships between New Zealand’s angels and early-stage investment companies like Movac were crucial for ensuring Kiwi companies got enough funding to grow, Vivian said. “There are always going to be natural ups, downs, surprises and successes that go with being invested in any early-stage company, but the more experienced people the business is able to surround itself with, the better.”

Enterprise Angels executive director Bill Murphy agreed: “What Zeosoft highlights is there is an increasingly strong early-stage investment network in New Zealand where deals, due diligence and investing are often shared.

“This leads to more capital and more opportunities for promising young companies.”

Produced in conjunction with the Angel Association of New Zealand.

First published on nzherald.co.nz 17 July 2014

App turns colouring books into 3D

A Kiwi invention is taking the beloved pastime of colouring-in to a whole new, high-tech level, allowing kids’ colouring creations to come to life.

New Zealand company Puteko’s colAR Mix app allows users to print, colour-in and then see the image they’ve created come alive in a 3D animated world thanks to some seriously clever augmented reality technology.

Augmented reality (AR) allows users to see 3D computer graphics hovering over 2D coloured images on your mobile phone or iPad.

The technology is based on research carried out by Puteko’s head of research and development, Adrian Clark, during his PhD at Canterbury University’s Human Interface Technology Laboratory (HITLab) research institute.

There are an increasing number of AR apps around, however the colAR Mix app has a key point of difference, explains Puteko’s new chief executive, Edwin Darlow.
“Usually in AR what pops up for you is what pops up for me, and the user has no ability to modify or interact with that,” Darlow said.

“However, Adrian’s research focused on finding a way to make the marker, as it’s called in AR, able to be modified. So with this app people are actually able to colour-in the images – or modify them – and those changes can then be incorporated into the AR environment that pops up.”

Puteko was formed in 2012 and it released the colAR Mix app last year to much fanfare with one reviewer calling it “the colouring book of the future” and a “pretty much perfect” example of AR. It’s since had more than 475,000 downloads.

The fledgling tech firm also caught the eye of the folks at angel investment and advisory firm Sparkbox Ventures leading to a $220,000 investment in Puteko last September by the Global from Day One fund (GD1), made up of investment from Sparkbox, the New Zealand Venture Investment Fund (NZVIF) and GD1 Nominees.

At that time Darlow was on the other side of the fence, heavily involved with the company as a venture associate at Sparkbox. Soon after the investment was made, however, he joined the Puteko team full time and in April this year he moved into the CEO role.

“GD1 invests at a very early stage and a lot of the things they invest in are almost ideas rather than businesses; but ideas with great potential. Those funds have allowed the Puteko team to get in-market and refine their business model, strategy and where the company is placed in the AR ecosystem.”

The funding has also allowed the company to take on four full-time staff, as previously everyone in the company had been working on the venture part-time, around their day jobs. Plus it’s allowed it to move its headquarters to Tokyo so it has the massive mobile markets of Japan and the US closer to hand.

“It was the ideal and the necessary place for the company to be, to be able to grow and evolve at the speed it needed to,” Darlow said.

“At the moment the colouring pages we have are fun, but being able to use well-known characters that people already know from other things like movies is the next step.

“Ultimately what we’re looking to do is connect the physical with the digital.

“I think the technology can really become an AR platform for content in the games, entertainment and education spaces.”

Produced in conjunction with the Angel Association of New Zealand.

First published in the New Zealand Herald on Thursday June 26 2014

 

ROCKIT APPLE INTRODUCED IN ITALY

The size of fruit changes as well as purchase opportunities. In order to adapt to new trends like the tendency to have short lunch breaks and the preference for healthy snacks, Melavì and One App have officially launched Rockit apples on the Italian market.

“Its size is ideal and the innovative packaging means it can be eaten anywhere – it is perfect even for those people who wouldn’t normally eat fruit as a snack,” said Elena Picozzi from One App srl.

The size of fruit changes as well as purchase opportunities. In order to adapt to new trends like the tendency to have short lunch breaks and the preference for healthy snacks, Melavì and One App have officially launched Rockit apples on the Italian market.

“It is a unique apple, as it is fresh and healthy, but also rich in vitamins and mineral salts. Its sugar content is above average and its crunchiness and juiciness are also impressive,” explained Gianluigi Quagelli, chairman of Melavi.

The average diameter of apples varies between 65 and 85-90 mm, whereas these “miniature” apples measure 53-63 mm, on top of having a very long shelf-life.

They are sold in a practical 100% recyclable PET tube, so they can be taken along very easily. Each tube can hold between 3 and 5 mini-apples depending on the size of the fruit.

One App and Melavì (which gathers 75% of Valtellina apple producers) signed an agreement to use the brand and have therefore become the exclusive managers of this variety for the Italian markets with distribution rights in Switzerland, Spain and Russia.

The internationalization strategy for the brand is based on the selection of foreign distributors. Rockit used to be produced only in New Zealand but now it is being produced also in US and South Africa. Until 2017, therefore, these apples will be available only between April/October. Production in Valtellina will start in 2018 and then the fruit will be available the whole year round thanks to the alternation between the two hemispheres.

“Innovation is not as common in the fruit world. In this case, both the variety and the packaging are new. It is a new way to eat apples that we need to promote,” explained Tiziano Caprioli, sales manager for Melavì.

At the moment, Rockit is only on sale in a big supermarket chain, but new channels will be to reach the consumer target – shops, bars, airports, motorways, sports and wellness facilities, golf clubs, stadiums and beaches. So far, prices have been imposed by New Zealand.

For further info:
Società agricola Melavì
Email: [email protected]
Web: www.melavi.it

One App srl
Email: [email protected]
Web: www.oneappsrl.net

Publication date: 6/20/2014

$3m investment for NZ Startups

Lightning Lab Demo Day 2014 generated $3 million in offers of seed investment capital.

It is the largest early stage investment pitch event in New Zealand.

Founders from nine startups, mostly online platforms and tools for both businesses and consumers, took the stage on May 2 , 2014.

The room was full of more than 100 registered investors amid supporters, sponsors, family and friends.

Offers totalling $3 million of investment have been made, including that from NZ Venture Investment Fund’s Seed Co-Investment Fund (SCIF).

Angel investors were joined by institutional investors and larger funds, showing a growing enthusiasm from the early stage investment community for the prospects put forward by the Lightning Lab.

Stefan Korn, CEO, Creative HQ: “This year we saw more teams earning revenue by Demo Day, and a greater sense of commercial acumen and business leadership on the teams – a big win for the programme as we look to expand beyond Wellington in 2015.”

Read more on Techday.com

Arc Angels

ArcAngels hopes to inspire the seasoned investor – men and women – and attract new investors that can actively participate and bring to bear tangible value to the success of New Zealand’s women-managed businesses and financial returns for members over time.

Startup Standouts – Cloud Cannon & Common Ledger

As an investor there’s nothing to stop you from keeping an eye on some of the bright young things coming through. Of nine startups that pitched at Wellington’s Lightening Lab Demo Day, two really stood out reports Yahoo NZ’s business desk.

Common Ledger. The startup has developed a platform letting accountants integrate different accounting software. That might make your eyes glass-over, but if you’re a small business owner, it means you can run your old MYOB accounts in your accountant’s flash new Xero system, without having to copy and paste.

They were looking to raise $550,000 and had attracted half of that in commitments before pitching, which would go to completing a major deal with one of the big four accounting firms, and help pay for their sales and distribution.

Cloud Cannon. These two youngsters have a startup which has developed a platform to make it easier for freelance web developers to create and host websites.

If you don’t hang around any web or design geeks, you probably won’t know the frustration they typically go through to send and upload their final design for a customer. Essentially it’s eight hours of pain-staking graft at the end of what’s already been an arduous process.

Cloud Cannon’s idea was to use Dropbox to cut that time to seconds, in what becomes a drag and drop process.

It’s a simple idea, but also one that would win over the scores of freelance web designers out there if they can get their product down-pat.

Read more from Yahoo NZ Business & Finance News

Investment in Bold Kiwi Colour poised to paint the world

Arc Angels Executive Director, Alex Mercer, said part of drikolor’s® appeal is because it is managed and designed by a woman who has tremendous experience in the paint industry.

“The fact that drikolor a new product with few competitors, and are manufacturing locally with enormous potential offshore, all help make it a compelling business to invest in.”

In just 18 months drikolor® has transformed from a start-up with a disruptive technology, to one that has 10 employees, global partners, and a New Zealand-based commercial manufacturing facility readying to open.

The innovative process proprietary to drikolor® delivers colour in a dry, granulated form that can be stirred into paint. Rachel Lacy says it’s as simple as stirring sugar into coffee.

Read more from Scoop

Lightning Lab thunders into Round Two

The success of New Zealand’s freshest digital companies starts to show as Lightning Lab announces its second accelerator programme to run from March 2014.

With $2.2 million dollars invested into four of Lightning Lab’s inaugural companies, the success of the programme is bearing fruit as the new businesses build their teams, release their products into global markets and ramp up their growth momentum.

Read more

NZ angels – broaden your investment portfolios

New Zealand angel investors are backing too few start-ups and should broaden their angel investment portfolios if they want to improve their chance of a return, according to Angel Association chairman Marcel van den Assum.

The success of software companies such as Wellington-based Xero had helped foster an environment where start-ups can flourish, though local angel investors have been reluctant to expand their portfolios, van den Assum, who was part of the successful sale of local software firm GreenButton to Microsoft earlier this month, told an audience at the Lightning Lab demo day in Wellington yesterday.

Read more at NZ Herald

Angel investors prefer web companies

Investors in start up companies prefer web based software and services according to a recent survey by Angel Association New Zealand.

Angel investor’s preference for software companies is followed closely by technology hardware and equipment, then biotech and life-sciences.

Angel Association Chair, Phil McCaw said “around half of angel investors invest more than $30,000 on each deal, with twenty percent having up to $100,000 to spend.”

“Thirty percent of angels preferred deals involving $250,000 to $500,000 in the first round of funding being sought by a company. Investing in deals at concept stage with the product and market still needing validation was least popular. Investors prefer companies with a proven business model and some sales.”

“Angel investors bring expertise with their capital. Over a third of investors are prepared to roll up their sleeves and get deeply involved in preparing a venture for investment.

The Angel Association surveyed its members including those running seed funds and individuals who are members of formal networks. New Zealand has half a dozen managed funds investing in early stage ventures and approximately 200 angels belonging to networks based in Otago, Christchurch, Nelson, Wellington, the Manawatu, Tauranga and Auckland. A quarter of the members responded to the survey. Industry publication Young Company Finance reported the survey results in the March 2012 issue.

Angel investors have cumulatively invested $220 million into high-growth companies since 2006, in an average deal size of $540,000.

Contacts

Colin McKinnon, Executive Director, Angel Association New Zealand Incorporated
+64276406400
[email protected]

Crowdfunding door opens for NZ corporates

First published in New Zealand Herald Wednesday April 2, 2014

New rules enable firms to raise up to $2m a year without having to issue a prospectus.

Around a dozen companies have indicated interest in setting up crowd-funding or peer-to-peer lending platforms as new rules come into force making it easier for businesses to raise capital. The first regulations in an overhaul of capital markets law came into effect yesterday, opening the door for these new platforms to be set up. Equity crowd-funding involves members of the public providing capital to businesses in exchange for shares.

The new regulations introduced by the mammoth Financial Markets Conduct Bill, which came into force yesterday, enable companies to raise up to $2 million a year in crowd-funding without having to issue a prospectus. Peer-to-peer lending, which allows businesses or individuals to borrow funds from the public, usually through an online platform, is also covered by this new regime. Both equity crowd-funding platforms and peer-to-peer lenders need to be licensed by the Financial Markets Authority.

The FMA has already received around a dozen “expressions of interests” for these licences, which companies could apply for from yesterday, a spokeswoman said. “While applications will not be processed overnight the process is expected to take a matter of weeks rather than months. However, this will also depend on the quality of information provided by applicants,” she said.

As well as paving the way for equity crowd-funding, the new regulations also allow for companies to raise up to $2 million from 20 investors in a year without needing to issue a prospectus or investment statement. New Zealand Private Equity & Venture Capital Association executive director Colin McKinnon said this “small offer” provision would make the capital raising process easier and mean there aren’t as many hoops to jump through. The Icehouse chief executive Andy Hamilton said the provision would save the likes of the Ice Angels investment network “a substantial” amount of time. McKinnon said the capital-raising sections of the law would contribute “to a vibrant capital market from angels [networks] through to private ownership to the public market”.

Law firm Simpson Grierson said both the crowd-funding provisions and the small offer provisions were “particularly relevant to start-ups” and would provide them with more options to raise money without having to go through the “expense of full disclosure”. While he called parts of the new regime exciting, Hamilton said it was unclear what sort of crowd-funding deals would be successful. “Is it going to be consumer-facing companies trying to take advantage of their band of loyal followers who might put in a few hundred dollars each or is it actually going to be a platform where you see bigger investment rounds being done?”

Market watchdog gets sharper teeth: expert New Zealand’s market watchdog now has an “immensely powerful, proactive toolbox” to stamp out misleading behaviour before people are harmed as new regulations kick in today, says Chapman Tripp partner Roger Wallis. A centrepiece of the new capital markets rules is a section banning misleading and deceptive conduct and Wallis said this part was “immensely powerful”. “Particularly when it goes hand in hand with the new tools which the FMA [Financial Markets Authority] have,” he added. If the FMA believes something has been misrepresented, rather than prosecuting someone five years after the fact it can stop the relevant material from being distributed. “So, for example, if they don’t like something they can basically put out a notice saying stop doing it … let’s say there’s a backdoor listing out there. They [the FMA] don’t think the disclosure’s up to scratch, they could issue a notice requiring people to correct their disclosure or provide additional information,” Wallis said. “They could stop distribution of materials until the materials are brought up to scratch.”

Read the original article from New Zealand Herald

Consolidating angels holding their own

Angel investment in New Zealand is consolidating at around 100 deals a year involving $30 million of investment into start-up companies a year, New Zealand Venture Investment Fund chief executive Franceska Banga said today.

Releasing the latest Young Company Finance Index, Franceska Banga said that angels invested $27.6 million across 95 deals involving young New Zealand companies in 2012. This compares to $34.5 million invested across 100 deals in 2011. It is similar to the investment levels in 2007 and 2008, although below the 2009 and 2010 boom years when annual investment reached $50 million.

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Read the full Young Company Finance report

Movac powers up PowerbyProxi

PowerbyProxi is a capital-hungry hard-tech start up. So what convinced Movac this one was a good bet?

Apart from his electric toothbrush, David Beard says he knew nothing about charging wireless devices. But when he and his partners at angel and growth capital investment firm Movac encountered PowerbyProxi in 2008, they quickly recognised the commercial applications for wireless charging and realised they’d remained unexploited for too long.

When you’re working in the field you can’t drape cables everywhere to power machinery or connect wirelessly, as you can to the internet, to power your devices. So PowerbyProxi’s founders set about finding ways for devices to be unplugged from their source of power in hostile industrial environments, without resorting to unreliable cables, using a process called electromagnetic induction.

The brains behind PowerbyProxi is Fady Mishriki, who studied wireless power at the University of Auckland. Initially his focus was on miniaturising the technology for consumer electronics. But after meeting serial entrepreneur Greg Cross through the University’s business incubator, The Icehouse, this changed when the two discovered the amount of capital required and the number of potential competitors trying to do something similar.

“He was dead-set on building a technology company based on the University’s heritage in wireless power research,” says Cross of his co-founder. “Over the past 30 years the university has done more research on wireless power than any other organisation in the world. The IP portfolio and availability of world-class engineers provides us with what I refer to as unfair competitive advantage on the global stage.”

After a lot of market research Cross and Mishriki decided to join forces in 2007 and focus on the less competitive industrial market. But to get the company off the ground and up and running quickly, Cross and Mishriki needed investment, so Cross approached Movac.

“We took a reasonable amount of convincing that this technology was able to solve a large number of industrial and consumer problems,” Beard admits of Movac’s first meetings with Cross and Mishriki. “It was really more about execution than that the technology might be useful.”

Cross’s involvement certainly helped; Movac’s partners had met him at the entrepreneurs’ conference Morgo and had dealt with him on a previous venture he’d sought to fund. But Beard and Phil McCaw, Movac’s managing partner, recognised PowerbyProxi wasn’t just a technology startup; it was a ‘hard-tech’ – hardware products, not just software – startup. “Hard-tech companies require at least $5 million to $10 million to make them successful on the world stage,” says McCaw. That meant PowerbyProxi wasn’t suited to a typical angel investment scenario and was going to require significant support upfront and for the long haul. There just aren’t that many individual investors in New Zealand who’d invest such a large sum in a single, high-risk venture, says Beard.

What intrigued McCaw and Beard in their early conversations with Mishriki and Cross, however, was the discovery that Auckland University’s School of Electrical Engineering was a world-leader in wireless power technologies. “They realised the University of Auckland research, led by Professor John Boys over the last 20 years, gave us a hard competitive edge on the global stage,” says Cross.

Movac backs PowerbyProxi

Movac began backing start-up opportunities in 1998, funding its way with the help of cash generated from its founding partners’ day jobs in management consulting. Its first big success story was Trade Me, which allowed McCaw and his partners to turn their part-time passion into a full-time venture.

In 2005 Movac began putting together their second seed investment fund and used this to invest in PowerbyProxi. “We made about 16 investments out of that fund,” says McCaw.

Since then Movac’s participated in a further three investment rounds in PowerbyProxi from its third, later stage, growth capital fund, Fund 3, giving it both a seed fund interest and a venture fund interest in PowerbyProxi. For companies to succeed, ideally they need to raise more capital than they need at each capital raising, says Beard. “It stops you having to put your business in ‘minimum burn’ mode while you rattle the cup around again. That’s terribly distracting to a company and its growth aspirations.”

Movac began backing start-up opportunities in 1998, funding its way with the help of cash generated from its founding partners’ day jobs in management consulting. Its first big success story was Trade Me, which allowed McCaw and his partners to turn their part-time passion into a full-time venture.

In 2005 Movac began putting together their second seed investment fund and used this to invest in PowerbyProxi. “We made about 16 investments out of that fund,” says McCaw.

Since then Movac’s participated in a further three investment rounds in PowerbyProxi from its third, later stage, growth capital fund, Fund 3, giving it both a seed fund interest and a venture fund interest in PowerbyProxi. For companies to succeed, ideally they need to raise more capital than they need at each capital raising, says Beard. “It stops you having to put your business in ‘minimum burn’ mode while you rattle the cup around again. That’s terribly distracting to a company and its growth aspirations.”

McCaw says Movac is committed to PowerbyProxi “for the long haul” and it will need that tenacity: Cross’s vision for PowerbyProxi is to build a company that puts wireless power on every surface in every room of every home and office.

“Export or die,” the words of Waikato businessman and founder of Trigon Packaging Bill Foreman resonate with the PowerbyProxi co-founder. “

Cross and Movac’s considered and ambitious risk-taking in PowerbyProxi is already starting to pay off, with listed US electronics firm TE Connectivity announcing it was taking a near 11% stake in the company in April as part of a $5 million capital raising to help the company accelerate sales. TE Connectivity’s industrial division in Germany has already helped PowerbyProxi take its ARISO contactless connectivity platform to Market.

“Entrepreneurs not bureaucrats are the one who will unlock the commercial potential of New Zealand’s top researchers,” says Cross.

Lasers solve dairy sperm problem

The director of the University of Auckland’s Photon Factory, a high-tech laser research hub, was more interested in ultrafast lasers when she first met angel investors from tech investment firm Pacific Channel.

“They basically told me there were five big problems facing our dairy industry and asked if I could help with any of them,” says Simpson.

“I didn’t know anything about sperm sorting when I met them. I didn’t even know it was a problem. But that was the challenge that seemed most amenable to a physical, rather than a biological solution.”

It took three years, but Simpson and her team have gone from neophytes to solving one of agriculture’s most nagging problems. Their research – conducted under a new spinoff company, Engender Technologies, has led to a provisional patent on a technology that should be able to sort sperm cells by sex, quickly, inexpensively and without any loss of function.

The only currently available sex sorting method, flow cytometry, uses an electric field to separate male and female sperm in the field.

However, the stress of the process often results in underperforming sperm, thus negating the benefits of sex selection.

Engender’s technology is a direct result of The Photon Factory team’s deep knowledge of photonics – the study and use of light for energy – and what lasers can do when they flash in short, extremely rapid bursts.

The factory’s $1.7 million high-tech laser research equipment includes a femtosecond laser that can emit light pulses lasting in the order of millionths of a billionth of a second.

Engender was formed with co-funding from the University of Auckland’s technology commercialisation arm, UniServices, and Pacific Channel.

Pacific Channel managing director Brent Ogilvie says he and his colleagues originally approached Simpson with their “five problems” because of her reputation.

“The key to early-stage investing is listening carefully to markets and backing talent.

“There are pockets of genius all about the country, so you can’t be too prescriptive about picking sectors, but clearly dairy is something we do very well.”

Ogilvie says the trillion dollar livestock market is dominated by eight or nine artificial breeding providers worldwide.

Pacific Channel provides a bridge between New Zealand’s “world-class science” and the realisation of commercial value, he says.

“What we’re doing is applying our problem analysis abilities and the ability of clever people to do cutting edge research in their own area of expertise at the same time,” says Simpson.

“There is no doubt that advanced, high-tech science and engineering can add power to the New Zealand economy. We find it very rewarding to be part of that effort.”

Produced in conjunction with the Angel Association of New Zealand.

First published in the New Zealand Herald on Thursday March 20 2014

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Smart Show

Marie-Claire Andrews whips into the office like a minor Wellington tempest, curls bobbing, creamy English skin radiating energy from every pore.

“I get bored easily,” she announces.

“When I started working I had about nine permanent jobs in three years. My parents asked me to stop sending them my new email addresses. They couldn’t keep up.”

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Talent before ideas: incubator boss

First published in New Zealand Herald Thursday March 6, 2014

A blueprint for the next WhatsApp – sold to Facebook for a cool US$19 billion ($22.6 million) last month – would be a good start. A business plan for another Trade Me or Xero might be a beginning.

But according to entrepreneur-turned-investor Stefan Korn, a tech startup won’t get very far on an idea alone, however innovative that idea might be.

“Ideas are overrated,” he says. “Yes, you need a point of difference, but what you are really looking for is talent.”

Korn has been in the business of picking winning tech investments for a while now. Before taking over as chief executive of Wellington-based tech incubator Creative HQ last September, he founded several startups through WebFund, a private incubator he set up in 2007.

Incubators such as Creative HQ and WebFund provide startups with all the ingredients they need to grow – finance, expertise, contacts and resources – in exchange for a stake in the business and, less often, some heavily reduced advisory fees.

Increasingly popular, however, are accelerators, which work on a similar principle but over a far, far shorter timeframe and normally have a gaggle of angel, or early stage, investors who co-invest alongside the organisation once the startup’s been put through its paces and graduates.

New Zealand has one – Creative HQ’s Lightning Lab, which provides up to $18,000 in seed funding and aims to get a startup functioning and off on its own within three months in return for a stake of about 8 per cent.

The country needs incubators, accelerators, angel investors and venture capital firms to work together because that’s how the world’s tech hotspots such as Silicon Valley got where they are today, Korn says.

“They reinvest funds from earlier projects into new start-ups. Eventually it becomes a self-feeding mechanism, but it might take place over several decades. You have to take a long-term view.”

Since it was established in 2003, Creative HQ has helped more than 100 ventures, Korn says, but it turns away a lot more applicants than it takes on.

Potential candidates are assessed against an “evaluation matrix” with more than 20 different criteria. Innovation or the strength of the idea is just one aspect, Korn says.

“What’s more important are the background skills a team has. What insights into their business area or industry they bring, what networks they belong to and whether they can sell.”

The strength of the team is vital because at some point every startup will reach a critical point where it has to choose a way forward, change direction or focus on a particular area, Korn says.

“The team has to be able to make that decision when it happens. Otherwise all you’re left with is a great idea but not a viable business.”

According to Korn the investment climate in New Zealand compares well with other countries but sometimes the vision of local investors leaves something to be desired.

“New Zealand investors have usually made their money with traditional business models. They tend to have come from primary industries or property development so they don’t often ‘get’ how tech startups work.

“Traditional investors tend to look for indicators which make sense in their world. They might focus on the startup’s location or physical assets for example, which are irrelevant in our world.”

While New Zealand’s incubators and Lightening Lab accelerator educate eager startups, Korn hopes Creative HQ’s new investor boot camps, which are expected to start this year, will go a long way towards educating investors.

“The bootcamps will explain to investors what to look for in digital startups.

“We’ll cover things like what is involved in the due diligence process of early stage, high-growth ventures and what happens after the investment has been made; how to find out how the startup is doing, for example.”

Produced in conjunction with the Angel Association of New Zealand.

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Ice Angels touts record investment year

Auckland network the Ice Angels announced today that 2013 was its best year to date, with nearly $8 million pumped into 26 New Zealand businesses.

Members of the Ice Angels collectively invested $7,890,819 – nearly double the overall amount invested in 2012 and 2011.

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The mathematics of angels

Last month, two University of Auckland professors, John Boys and Grant Covic, were awarded the Prime Minister’s Science Prize for their development of wireless power transfer technology that can charge your cell phone without the need to plug it in. Some of this wireless charging technology is already on the path to commercialisation via the exciting startup company PowerbyProxi.

Sounds great! We need more companies like this. But realistically, what are the chances that a hot new startup like PowerbyProxi will grow into a major high tech export earner like Tait Electronics, Rakon or Fisher and Paykel? How many of these would we need to start to close the gap in GDP per capita with the rest of the OECD?

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