Venture fund likes crowd-funding rule change

Changes to the rules governing capital markets could allow investment in start-ups through crowd-funding platforms, a government-backed venture fund says.

New Zealand Venture Investment Fund chief executive Franceska Banga said provisions in the Financial Markets Conduct Act permitting crowd-funding could have a positive effect on start-ups when they came into effect on April 1.

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Board Matters

Shareholders always want a seat on the board. But if you do this right it will be better for your company, shareholders and you, says veteran angel investor Bill Payne.

Many entrepreneurs and company owners are terrified about losing control of their company. They want to grow the company quickly; they need investment, but they hate relinquishing board control, says American early-stage company (angel) investor Bill Payne.

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Wireless charging edges closer

The prospect of being able to recharge devices such as smartphones and cameras wirelessly has edged closer after two international standards bodies merged.

Auckland firm PowerbyProxi, which is a global player in the nascent wireless charging industry with 130 patents, and deals with technology giants Samsung and Texas Instruments, could be one of the beneficiaries.

Wireless charging promises to let consumers get rid of a spaghetti of cables and adapters in their homes, but rival technical standards have threatened to slow progress.

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Richard Branson on Not Going It Alone

I love bumping into people and finding out who they are and what they’re working on. You never know who you’re going to meet. Such encounters can be valuable: If you think about how your most important relationships began — with business partners, your spouse, with friends and mentors — the stories will almost all involve chance meetings. My curiosity about others and ability to connect with people have helped me to succeed — after all, if people don’t know who you are, they are not going to do business with you.

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Algae find sets firm on road to success

It makes salmon and cooked shellfish red. It’s in demand from marathon runners, performance athletes and the sports recovery market as a food supplement and its antioxidant qualities mean it may be beneficial in treating cardiovascular, immune and neurodegenerative diseases.

Auckland businessman and angel (or early stage company) investor Ray Thomson also stumbled across astaxanthin and Dowd’s fledgling astaxanthin company Supreme Biotech while at the Natural Products Conference in Nelson in 2010.

Traditionally New Zealand angel investors have been reticent about biotech but the sector’s image has been boosted recently by the outstanding performance of cancer diagnostics company Pacific Edge, says Thomson, who’s also chairman of the NZ Angel Association.

With revenue now at about $1 million a year, Thomson predicts Supreme Biotech is about six months away from breaking even and unlikely to need another angel funding round.

Angel investing is fundamental to New Zealand’s future wealth, says Thomson, and using the knowledge and experience of successful executives to mentor early-stage entrepreneurs as angels do is crucial in whether a new company succeeds or not. “[It] isn’t just about money. It’s about giving these entrepreneurs some real leadership and help along the way, that’s why it’s so exciting.”

Full story first published in the New Zealand Herald on Thursday February 13 2014

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Talking equity crowdfunding and entrepreneurship with Peter Thomson at Seedrs

Now that we’ve all gotten used to the concept of rewards crowdfunding, it’s time to get up to speed with equity crowdfunding.

One Kiwi at the forefront of the equity crowdfunding wave is Peter Thomson, newly appointed chief marketing officer of European equity crowdfunding platform Seedrs (named in the continent’s Fintech Top 50 for the year).

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Fuel50’s US expansion with Ice Angels support

An Auckland company whose software helps businesses and workers communicate about career development plans to expand into America and open an office in San Francisco with help from the Ice Angels investment network.

Career Engagement Group’s cloud-based software, Fuel50, is used by about 40 organisations worldwide and locally, including Westpac, Frucor, Zed, Fisher & Paykel Finance, and Fonterra.

The software is designed to help workers with career development within an organisation.

The company was launched two years ago and had five staff at the end of December but expected to double in size by March, Fulton said.

It has recently secured more than $1 million of funding from the Ice Angels investment network and plans to open an office in San Francisco early this year.

Full story first published in New Zealand Herald Thursday Janaury 30 2014

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Tech veteran joins project to help NZ firms access US

First published in New Zealand Herald on Monday January 27, 2014

Craig Elliott says the plan is to make the process simpler for New Zealand entrepreneurs who want to sell to the US.

It’s no surprise, really, that US tech entrepreneur Craig Elliott has been appointed a director of the Kiwi Landing Pad, the San Francisco-based hub for high-growth NZ tech businesses wanting to establish their businesses in the States.

Elliott was there in the beginning when KLP was just a twinkle in the eye of Sam Morgan, who set it up with Wellington entrepreneur John Holt and the support of the Ministry of Business, Innovation and Employment in 2011.

Morgan and Elliott met in Wanaka, where they both have property. They agreed that New Zealand businesses needed help to make it past the first hurdle in the complex and competitive US market.

Elliott is a strong believer in the talent New Zealand has to offer the rest of the world.

“The amount of entrepreneurialism and inventiveness in New Zealand is evident.

If we, at KLP, can provide opportunities for Kiwis to have access to markets so they get to compete on the global stage and export their ingenuity in bigger volumes, then we are doing something worthwhile.”

The American is based in Los Gatos in Silicon Valley and visits New Zealand regularly with his family.

He has been on the board of Xero for the past 16 months, is a strategic adviser to New Zealand Trade and Enterprise and has invested in some New Zealand tech companies.

Elliott’s network of contacts in the US is extensive.

With over 25 years of experience in networking and communications, he is now running the Silicon Valley tech start-up Pertino, which he co-founded. His aim is to reinvent networking for the cloud era. He was previously chief executive of Packateer, another IT start-up which he took from a three-person company to 200, going public in 1999 and taking it to a market valuation of over $2 billion.

Elliott’s career began at Apple. He caught Steve Jobs’ eye in the mid-80s when, as a science student from Iowa with aspirations to be a vet, he started selling Macs part-time. He became a top seller for Apple and Jobs rewarded him with a visit to San Francisco, dinner and a Porsche.

Elliott spent 10 years with the company, launching online services in 80 countries and taking on a number of senior roles, including international general manager of internet and online services.

His relationship with New Zealand started when he was working for Apple where part of his area of responsibility was the Pacific Rim. Apple would experiment with new products in New Zealand.

“We would try some things out – that’s how I got to know a number of folks in New Zealand.”

Elliott was taking a break here when he was lured back to Silicon Valley for his latest start-up business, Pertino (an abbreviation of Cupertino, the Californian town where the Apple HQ is) by former Packateer colleague Scott Hankins.

Packateer built networking products, but for large companies. Elliott and his team want to help small businesses use cloud technology to stay connected.

“Your typical small businesses need to buy a lot of hardware and deal with lots of complicated configuration to connect employees, provide security and so on.

“We take a lot of that same technology and with no big up-front cost and with a SaaS model, you can use our service to provide that connectivity, with no hardware and no configuration, for a low monthlycost.

“If you are travelling on the road on business, your laptop looks the same as it does in the office, it is a virtual office that is no different when you are in the coffee shop … these days everyone’s always mobile. We do it all in the cloud.”

The Xero board director admits it is something Xero could be involved in at some stage.

“I’ve had a few conversations with Rod Drury,” he says.

Despite Pertino stepping up a notch this year, Elliott has remained committed to New Zealand.

As a director at KLP, Elliott says his contribution will include making local introductions and “simple stuff” such as recommending the best lawyer.

“The plan should be to make KLP as efficient as possible in helping Kiwi entrepreneurs to access the US, to help them to understand the structures here,” he says.

“We want to make the process simpler for New Zealand entrepreneurs who want to make and sell things.”

Elliott is also organising paid Kiwi internships at his business over the New Zealand summer. He has set up a pilot scheme called InterNZ.

With an apartment ready and furnished and social security numbers organised, he has welcomed three computer science majors and computer engineers from the University of Auckland and Victoria University to spend until the end of February at Pertino.

It’s a win-win situation – Elliott has some new talent and the students get to go back to New Zealand with a good idea of how an American tech start-up works.

Elliott has other “Silicon Valley friends” watching to see how this goes and keen to take it on too if it is successful.

“We are going to kick it off, we have got all the visas sorted, and there is interest from Cisco and Apple to tell them how to do this.”

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Biotechs lured overseas by incentives and specialists

Two of Australia’s largest biotechnology companies are looking at ways of tapping into the greater valuations accorded to the sector overseas, presenting policy makers with challenges in keeping some high technology areas. One of the largest of the locally grown biotech companies, Mesoblast, is believed to be considering a sharemarket listing in the US, in a bid to lift its sharemarket valuation. Read more

Auckland’s plan to attract investors ranks highly

A strategy developed by Auckland Tourism, Events and Economic Development (ATEED) to attract foreign direct investment into Auckland has been named fourth best in the Asia-Pacific.

The ‘Asia-Pacific Cities of the Future 2013/14’ rankings were compiled by highly respected fDi Intelligence, a division of the UK’s Financial Times and the world’s largest foreign direct investment (FDI) centre of excellence.

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New year, new board member for SODA

Graham Gaylard, founder of San Francisco-based Real Time Genomics and managing director of software company NetValue, is the latest appointment to the board of Waikato business incubator SODA Inc.

​”There is a lot of untapped business potential in the Waikato region, and I see this appointment as an opportunity to use my skills and experience to bring together more people from business, technology, education and other sectors to help more startup businesses enjoy success, and ultimately grow our regional economy,” he says.

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IndieReign – something really clever

Independent film distribution company IndieReign began life as Reel Clever, a basket of online tools designed to help film-makers connect and market their wares within the industry. But after talking to customers, founder and chief executive David White realised the real pain in the industry was distribution.

Enter IndieReign, an online distribution platform that taps festival films and delivers them to your living room.

White and his team, and Phil McCaw of angel investment company Movac, have invested $300,000 of their own money developing the company’s technology, building initial networks and testing the concept.

White has already secured three-quarters of the funding he was seeking after, very unexpectedly, signing up three Silicon Valley investors while he was tying down a San Francisco film festival deal. He met the investors through both McCaw’s connections and the Government-backed Kiwi Landing Pad in San Francisco.

Full story first published in the New Zealand Herald on Friday November 23 2012

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Angel investment in two firms backs new particle analysis technology

The technology aims to make it easier and quicker to test and treat animals in the field. Photo / Tania Webb

Greg Mirams’ initial foray into the investment world didn’t go so well. The founder of animal parasite diagnostics company Techion Group was no stranger to capital raising, having set up, sold and bought back Techion. But when he tried to get investment for a new technology that could transform his business he was left out in the cold despite an intensive six-month courtship.

“It was crushing,” he says.

Mirams was seeking $300,000 for Menixis, a start-up company he co-founded with nano-scientist and director of Otago University’s applied science programme Stephen Sowerby.

Menixis holds the intellectual property to a new particle analysis technology developed over more than two years by Sowerby and Mirams. It could transform particle analysis in the field, replacing the need for microscopes or the skills to use microscopes to accurately identify and count particles, such as the number and type of parasitic eggs in a sample of animal faecal matter.

Mirams developed the technology to update Techion’s internationally popular parasitic diagnostic tool Fecpak to make it easier and quicker for farmers to test and treat their animals in the field.

It will also bolster Techion’s revenue by increasing its own monitoring and advisory capacities.

To Mirams the whole deal was a no-brainer. Why wouldn’t you invest in a new technology that already had a customer not only willing but keen to sell it to its significant local and international customer base, built up over more than 20 years?

Fortunately Mirams had been introduced to angel investor Bill Murphy, who decided to champion Mirams’ cause in his Bay of Plenty Enterprise Angel group.

“I just passionately believed we shouldn’t let this opportunity to invest in some significant new primary industry technology pass us by,” says Murphy.

Mirams pitched again, but was thrown when told the Angels liked the product, but wanted to roll Menixis’ technology into Techion and then invest in Techion. “We wanted to secure the connect between the IP and the market,” explains Murphy.

But that didn’t work for Mirams.

He argued that first, Techion had multiple business activities, complex operations and an established shareholder structure; second, Menixis co-founders Sowerby and Otago Innovation would end up with a relatively small shareholding in Techion, which wouldn’t give them as much incentive to continue to develop the technology; and third, the technology itself had far more potential than just animal parasitology (Techion’s focus).

“There are potential applications for this technology in the area of microscopic analysis of any small particle including algal blooms, pollen analysis and in the petrochemical and forensic evidence industries, none of which I know anything about, so Techion just isn’t the right vehicle for that. There’s also this massive opportunity for improving the speed of human parasite diagnostics.”

Murphy and his 13 co-investors at Enterprise Angels agreed and a novel deal was struck to invest in both Menixis and Techion to give Mirams the capital he needed to turn the technology into a commercially saleable product.

Mirams and Murphy say this deal could have implications for investors and companies. Both get the security of investing in growing existing revenue streams, plus the upside of investing in new and potentially even bigger revenue streams.

“My hope is this deal becomes a kind of blueprint for a new New Zealand growth model,” says Mirams.

Produced in conjunction with Angel Association of New Zealand

First published in the New Zealand Thursday November 21 2013

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Gear up for an NZ growth wave, says private business

Tags: investors

First published in New Zealand Herald Tuesday Nov 12, 2013

Kiwi companies need to gear up for a “growth wave”, according to an annual measure of the views of private businesses.

ANZ’s Privately-owned Business Barometerquestioned 3000 businesses across the country and found confidence in the New Zealand economy has risen sharply in the last year and most commercial businesses are expecting earnings growth in the next year.

But it found businesses need to focus on investment, inspiration and planning and scale and collaboration if they want to build sustainable growth.

Graham Turley, ANZ managing director commercial and agri, said the past few years had been tough for Kiwi businesses but there was a wave of growth coming which had the potential to propel New Zealand into an enviable position.

“The question is: are we ready for it and how can we ensure that after rising this wave we’re better placed to ride out future peaks and troughs?”

Turley said businesses had spotted the wave coming and confidence was at a long-term high.

The survey found 78 per cent were slightly to very optimistic about their own business over the next year compared to 65 per cent in 2012.

Confidence in the economy was also up sharply from 44 per cent to 68 per cent and 88 per cent of commercial businesses expected earnings growth in the next year.

Turley said worries over getting paid, tight inventory, cost control and lack of capital for funding were less of a priority.

But businesses now needed to reshape their responses to take advantage of more favourable conditions, he said.

Turley said the most important step was creating scale to provide options. The survey found 16 per cent of commercial respondents were looking at mergers and acquisitions to drive business performance and 11 per cent were looking at partnerships or joint ventures.

“It’s not necessarily about mergers or acquisitions, though these can provide a step-change in scale for some. It could be about achieving the size and earnings capacity to attract skilled people who can help drive further growth.”

Investment was also important, Turley said. “The most important investment may be in the capabilities of the owner or manager so they’re fully equipped to evaluate and seize opportunities.”

The survey also identified inspiration and planning as a key different that could fuel a company’s next leap forward.

“A sound plan will consider a range of possible future scenarios and the best business response. This helps ensure a business will not be unduly shaken by the next peak or trough in economic fortunes,” Turley said.

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Gear up for an NZ growth wave, says private business

Kiwi companies need to gear up for a “growth wave”, according to an annual measure of the views of private businesses.

ANZ’s Privately-owned Business Barometer questioned 3000 businesses across the country and found confidence in the New Zealand economy has risen sharply in the last year and most commercial businesses are expecting earnings growth in the next year.

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Firm uses cell network, cloud for surveillance work

Imagine you’re charged with managing a number of rural properties from a distance. Private landfill sites or parks and forestry land, for example. How would you protect against fly-tippers (illegal dumping), vandals or arsonists?

Video surveillance is expensive and technically difficult, especially when your locations are far from your base. Transferring your surveillance footage from one place to another needs a high-capacity broadband connection, which isn’t available in many remote locations.

Husband and wife entrepreneurs Helen and Scott Wattie founded their business Mi5 Security with business partner and director Nick Mooyman and decided to target this untapped potential market.

“Technology’s solving a problem where once only a human response was possible,” Helen says.

Mi5 uses the cellular network and its proprietary cloud computing platform, iDefigo, to keep tabs on remote locations.

This simplifies surveillance and monitoring of remote environments, even where power and Wi-Fi aren’t readily available.

Surveillance footage can be transferred using only modest amounts of bandwidth.

The business is based on four interwoven revenue streams – video surveillance as a service subscription via the cloud, mobile data services, platform licensing fees and hardware sales.

But the Watties soon realised having a product on the market and their business processes and structures in place weren’t enough if they wanted to develop the business quickly. They approached angel investor and entrepreneur Scott Gilmour for advice on raising capital to fuel their expansion plans.

They’d first met Gilmour through the Software Association. Initially, it was not their intention for him to invest in the business – they simply wanted his advice on where to look for investment, says Helen.

“Scott quickly introduced us to the possibility of gaining angel investment at a critical growth stage of our business.”

Gilmour, meanwhile, was an established angel investor, having worked at Intel for more than 12 years and was founder of the “I have a Dream” charitable trust in ths country.

Mi5 security was an interesting-sounding investment opportunity, he says, but he was initially more attracted by the founders’ commitment to the company.

“I got to know them and the company and I just thought they were good people, which is my prime requirement for getting involved.”

Gilmour is a founding member of the Ice Angels, the largest group of angel investors with more than 100 members. With a decade of Ice Angels experience, as well as seven years on the advisory board of Trade and Enterprise’s Beachheads Initiative (which connects companies to a network of private sector advisers), Gilmour says between 30 and 40 companies present their business plans to him every year, but few grab his attention like Mi5 did.

Gilmour became chairman of Mi5 Security in July last year and has since raised more than $1 million in two finance rounds, helping pave the way for the company’s expansion into Britain.

From their earliest discussions Gilmour understood Mi5’s proposition, Helen says, and having such a good and committed chairman has been instrumental in helping the company to grow quickly.

“Without Scott as the communication gateway between ourselves and our investors, we’d find ourselves crippled by paperwork and frustrated by the time spent educating people on our business and justifying our decisions.”

Like many high-tech start-ups Mi5 isn’t profitable yet as it’s reinvesting for growth, but it already has many customers here and in Australia and channel partners, as well as a growing UK and mainland European presence.

But it faces the same challenges all Kiwi tech companies do, says Gilmour: access to capital, management capabilities and distance from market. So the Watties are now based in London.

Produced in conjunction with the Angel Association of New Zealand.

First published in New Zealand Herald on Thursday November 7 2013

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Paper slaps warning on equity crowdfunding

A discussion paper with draft Financial Markets Conduct Act regulations, recently released by the Ministry of Business, Innovation and Employment, proposes a warning for investors who may use crowdfunding services.

The paper includes a condition for crowdfunding service providers to make a warning statement available as part of the market services license to provide the service, on the home page of their website or on the page on the site immediately before the investor uses the site to apply for or acquire financial products, and prominently displayed on application forms for acquiring financial products using the service.

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Meeting gives backers wings to help with development

Tags: Angel Summit

Delegates at the Angel Summit would be wiser about investing in new ventures.

An angel investor is also looking to help entrepreneurs and hopefully see the local economy do better as a result.

What did the Dunedin summit set out to do?

The purpose was to increase the professionalism of angel investing in New Zealand. We tackled the issues of due diligence, valuations and term sheets. We heard from international expert Basil Peters on the importance of and rationale for looking for early exits. The summit was all about making us better angel investors and learning and networking with others with a similar mind to help entrepreneurs and New Zealand economic development.

What criteria do angel investors generally use to invest in New Zealand and internationally?

They look for unique ideas or projects that are internationally scalable and are led by a good team.

How would you define an angel investor?

How much do small New Zealand businesses rely on angel investors?

Private equity investors and banks only fund larger profitable companies. Angels fund earlier stage companies that generally are not yet profitable.

What are some recent triumphs of angel investors in New Zealand?

There are angel-backed companies going through big valuation increases – PowerbyProxi and Lanzatech – and a number looking to list – Triplejump and Rex Bionics. But the success story has been Pacific Edge, which was spun out from Otago University 12 years ago and is now capitalised on the NZX at more than $400 million.

Why do some angel investors prefer to invest in groups?

This is high-risk investing and doing it in groups allows capital to be aggregated. Investors can also leverage the expertise of others in their group.

Are there any particular sectors that New Zealand angel investors are interested in?

They tend to invest across the broad spectrum of business but the two most popular sectors are ICT and life sciences.

What drives you as an angel investor?

I want to make a difference to New Zealand’s economic performance. I could easily just invest in the sharemarket and go and live at the beach. But I enjoy the challenge of angel investing and love working with entrepreneurs. Entrepreneurs are a special breed who deserve all the help we can give them. I have invested about $1 million in about 25 companies. But my biggest start-up success has been a large investment with a group of friends in Manuka Health, which I helped found seven years ago. It has done spectacularly well with sales now more than $30 million and ebit over $5 million.

Ray Thomson chairs the Angel Association of New Zealand.

Angels found, angels wanted

First published in the New Zealand Herald Friday October 11, 2013

Antony Dixon is bubbling with excitement. The chief executive of electronics-technology company Times-7 has just returned from Hong Kong, where the firm was named in the prestigious Red Herring Top 100 Asia awards.

The awards celebrate emerging technology companies from the Asia-Pacific region, so it was a big deal for a small company from New Zealand, says Dixon.

Even bigger, however, was what happened between the pitches and the handshakes. Dixon used the awards as an opportunity to visit his Asian contacts; confirming two new distributors in Hong Kong and Singapore and netting a new client in Japan in the process. “It was all really worthwhile, we got international recognition for our technology and we signed up a couple of new partners,” says an obviously delighted Dixon.

All this is a far cry from a year ago.

Times-7’s business is supplying equipment for the radio-frequency identification (RFID) or “smart tag” market.

Back then Dixon had been knocking on doors for almost a year trying to raise enough capital to develop and market the company’s new robust, slim-line antennas. His invitation to pitch at the 2012 Angel Summit – the annual gathering of the country’s angel investors (individuals who have a bit of spare cash to invest in tomorrow’s Kiwi companies) – was his last attempt to raise the $600,000 he badly needed.

“Before the summit we still didn’t have enough money on the table to make the [investment] round worthwhile. So we had to really put our best foot forward – which we did.”

Times-7 was one of 13 budding Kiwi companies asked to pitch at last year’s summit and one of six profiled by The Business last November.

It was one of the successful ones. Others were equally or even more successful; a couple, far less so. One is still trying to close the capital raising round it embarked on more than 18 months ago, making the Summit showcase a small part of what is now a long and arduous journey.

Even those who were successful, however, still have capital raising firmly on their agendas. That’s a fact of life for early-stage companies that doesn’t surprise Angel Association chairman and investor Ray Thomson.

“One of the problems with early-stage companies in New Zealand is they tend to run on the smell of an oily rag,” he says. “They don’t have enough capital to get themselves to market fast enough. It’s one of the major problems we have around commercialising Kiwi technology.”

Thomson says he encourages companies to raise as much as they can, whenever they can. Too many raise too little, slowing their potential progress and leaving them at risk of being overtaken by competitors or new developments.

Finding enough capital, however, is a problem Thomson shares with the companies. A key function of the association and its annual Summit is to encourage new angels to join the ranks and share their money, and the risks, with other angels in order to grow the total pool of money available to early-stage companies.

“That’s why we have the Summit in a different part of the country each year, to encourage more local interest.”

Last year’s Summit in Wellington, co-hosted by the local angel group Angel HQ, helped swell the capital’s angel numbers by 50 per cent, from 31 to 45. The association’s push to grow numbers also seems to be working across the country, with the official number of angels now at 420 compared with 368 this time last year.

Thomson and his association colleagues are beavering away on other initiatives in an effort to continue the momentum. A women-only angel group called Arc Angels is being launched this month in Auckland and Wellington. The group is the brainchild of Kiwi expat and staunch early-stage company supporter Bridget Liddell, now a senior partner with US investment company 212° Equity. Liddell is earmarked as chairwoman of the new group, and communications consultant Alex Mercer has been signed up as executive director.

Women-only angel investment groups are very successful in the US, says Thomson, especially at finding capital for businesses led by female entrepreneurs.

Golden Seeds, which started as a women-only group focusing primarily on women-run businesses, is now one of the largest and most active angel investment organisations in the States, investing US$58 million in 58 companies since 2005.

Thomson’s aim is to increase New Zealand angel numbers to more than 550 next year and he expects the Arc Angels to provide a significant chunk of that target.

There’s also a push to develop dedicated angel groups in some of the smaller centres, including Whangarei, Hamilton, Oamaru and Invercargill.

The latest Young Company Finance Index, produced by the Government’s NZ Venture Investment Fund, shows that angel investment increased 18 per cent to $36.5 million in the year to June, compared to $30.9 million in the year to June 2012. Cumulatively, $274 million has been invested in early-stage companies by angel investors since data was first recorded in 2006.

But Thomson says the numbers don’t reflect the true health of New Zealand’s angel sector, which is second only to the States, based on the number of angels per head of population.

“Twenty-three New Zealand angels went to the US Angel Summit this year. We were the largest country represented outside America, so there’s a huge amount of interest [in angel investing] here.”

This passion for angel investing is a large part of the reason why New Zealand can attract big international names to its Summit, says Thomson. “[International] angels like coming down here because this is one of the most vibrant angel communities in the world.”

This year the Summit’s line-up includes Canadian technology entrepreneur turned angel guru Basil Peters, a regular speaker on the US angel circuit and a strong advocate of early exits for angel investors. He is speaking for the first time outside North America, says Thomson. Others on the list include well known US angel and Kiwiphile Bill Payne; Singapore-based British angel investor Hugh Mason, who runs the emerging company accelerator JFDI Asia; and Stuart Fox, principal of one of Australia’s larger angel funds.

Driving best practice and angel numbers goes hand in hand, says Thomson. “It’s all about supporting the ecosystem. It’s no use the Government helping to build these little companies, and get the intellectual property out of our research organisations, if there’s no capital around to help them reach their targets.”

So how did our pick of companies from last year’s summit showcase go?

Read the original article

If you would like to find out more about the 2014 Summit, please see AANZ Summit 2014.

Rehab firm needs more to take the next step

Elliott Kernohan, chief executive of rehabilitation technology company IM-Able, embarked on a $1.25 million capital raising round at the 2012 Angel Association of New Zealand Summit in Wellington.

Before the summit he’d had $640,000 pledged from Cure Kids Ventures, which is interested in the company’s technology for children with cerebral palsy, so the end was in sight. But no end came.

The company managed to attract only another $200,000. Not enough to close the round, take the money and put it to work, says Kernohan. “we’ve moved away from the angel networks to focus on investors who have experience in the healthcare sector. So the conversations we’ve been having have been a lot more successful.”

Kernohan echoes Polybatics head Tracy Thompson when he says capital raising is difficult in New Zealand for budding healthcare companies. He also suspects IM-Able (pronounced “I’m able”) was a little too far down the track for angel investors, requiring perhaps a little too much money for their comfort. The trouble is, to take these projects any further requires capital, says Kernohan. The grand scheme to translate its technology to the web, to give clinicians the ability to develop large-scale rehabilitation programmes for stroke victims and others who suffer from neurological problems, is also on hold until the round closes.

First published in the New Zealand Herald on Friday October 11 2013

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Bread man uses his loaf to beat crate conundrum

Steve Haythorne says his Mobot can save firms thousands.

In his past life as a supply chain manager, entrepreneur Steve Haythorne would send 30,000 loaves of bread from Auckland to Whangarei each night. But he noticed a problem – each of the three trucks it took to do the job was only 60 per cent full.

Haythorne’s conundrum stemmed from a baking industry convention: standard loaf crates were stacked in piles of 12 or 13, which was as high as they could be stacked to allow the delivery guys to heft them around on a handbarrow and reach the top to unload.

The stacks were too low to fill up the trucks, but still heavy and dangerous, Haythorne said.

“It’s a very labour-intensive job that involves a lot of man-handling as well as creating a dangerous environment … I thought there has to be a better way.”

After searching for some handling machinery that could do the job better drew a blank, Haythorne set about creating his own.

The result is Mobot – an all-electric, stand-on, zero-turn device designed to move items that are too small for forklifts but too heavy to be safely moved by the ubiquitous handbarrow.

A Mobot is manoeuvrable enough to work within the confines of a delivery truck.

It is capable of lifting a stack of 10 crates and then putting another 10 on top, so it can fill a delivery truck to its full height, Haythorne said.

“That results in a massive financial payback. A Mobot could save that Whangarei bread run $700,000 annually, because it can now be made by two trucks instead of three.”

The machines will also vastly improve health and safety conditions, increasing workplace productivity and reducing ACC costs, he said.

After receiving some early expressions of interest in a concept vehicle he built more than 18 months ago from his then-employer, Goodman Fielder, as well as Fonterra and bread maker Tip Top, Haythorne quit his job to work full-time on his new company, Mobotech.

“I sold my house, all my shares and went into hock on everything and just poured it all into getting a prototype vehicle together.”

A year ago Haythorne showed that prototype to the guys at angel investment firm Sparkbox Ventures. They liked what they saw and invested seed capital of $200,000 from the Global from Day One fund – a joint venture between Sparkbox and Auckland business incubator The Icehouse, with half the funding matched from the Government’s New Zealand Venture Investment Fund.

A further boost was given to the fledgling company with a $112,000 grant from Callaghan Innovation.

Sparkbox venture principal Mark Robotham said Mobots had great market potential.

“The niche market in the bread and milk sectors is enough to make the business very successful, but there are other opportunities to extend it to wider markets,” he said.

“What we’re trying to do with companies like this is get engaged very early on to ensure they reach global markets as quick as they possibly can … it’s all based on the rationale of grow fast [or] fail fast.”

Haythorne has used his seed funding to create a final prototype, which he plans to show at a world baking expo in Las Vegas this month.

He’s also about to embark on a second investment round to help fund Mobot’s manufacture and initiate sales in the US. Already having a track record with funders will make that process a lot easier, he said.

“I’m just very appreciative that the angels elected to get in behind the idea because it never would have gone anywhere without them.”

Produced in association with the Angel Association of New Zealand.

First published in the Herald on Thursday October 10 2013

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Linear Technology Corporation & PowerbyProxi Announce Partnership

Linear Technology Corporation (NASDAQ: LLTC) and PowerbyProxi (www.powerbyproxi.com) today announced that they have been working in partnership to develop wireless power systems for use in a range of applications and environments. As a first result of that partnership, Linear Technology today introduced the LTC4120 integrated circuit that combines a wireless power receiver with a full-featured battery charger to implement the receiver side of a complete wireless power transfer system – a first for the company and a revolutionary product for wireless battery charging.

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BioLumic raises GD1 funding for offshore growth

Plant science company BioLumic has successfully completed a new investment round with backing from the Global from Day One programme (GD1). The investment will finance customer trials and a foray into international markets.

BioLumic is a Palmerston North company which is commercialising ultra violet light technology developed to improve crop growth within large scale horticultural systems. Its proprietary UV and ‘Smart Array’technology is able to control plant size, growth, stress tolerance and a range of consumer quality attributes in a way that has never beforebeen commercially achievable. “BioLumic is a very attractive investment proposition due to the significant potential of its technology to increase returns for high volume vegetable and algae growers internationally,” says GD1 chief executive Greg Sitters.

“The company is still at an early stage of developing technology that has massive worldwide applicability. The technology will revolutionise the way plants are grown. This kind of early stage investment in companies with immediate global potential is precisely the sort of opportunity which GD1 is very interested in backing.”

“BioLumic is fortunate to have the backing of a GD1 investment to follow our initial fundraising through the MIG Angels’ Fund 1 and the New Zealand Venture Investment Fund’s SCIF fund,” says Warren Bebb, BioLumic general manager.

“This latest investment enables us to conduct extra customer trials and engage more with potential international partners and markets. As a result of this funding, we will be in a strong position to have our first product in market by the end of 2014.”

The science behind BioLumic was developed by Dr Jason Wargent, an applied plant physiologist at Massey University. The company was founded in November 2012. Palmerston North-based BCC has to date managed the commercialisation process, and the company has also received a Callaghan Innovation Project Grant and a loan from the Central Energy Trust.

“The MIG Angels identified BioLumic as a company with high potential and invested in it through MIG Fund 1,” says Mike Creed, who represents MIG Fund 1 on the BioLumic board. “We are happy with the progress the company has made so far and absolutely welcome the investment by GD1. Increasing the cash on hand will give the company a bit more breathing space as it works towards its milestones.”

Bebb says BioLumic will soon begin customer trials at two sites in the North Island; the company will start small-scale customer trials later this month, and larger scale customer trials are scheduled to begin in November.

BioLumic has recently completed filing its PCT patent in New Zealand and, over the next year, says Bebb, the company will determine in which other countries to file. He expects the first commercial prototype to be available for testing by the end of 2013 and the second prototype, incorporating modifications of the first, is planned for trials in mid-2014. The company expects to be in production towards the end of 2014.

BioLumic (www.BioLumic.com)

BioLumic is a plant science company based on science developed at Massey University. Through manipulating exposure to doses of UV light, BioLumic’s IP has been shown to optimise plant growth for desired effects including yield, disease control, colour and flavour. Current applications of the technology are being developed that include treatments for transplant crop seedling quality; growth and quality regulation of fully indoor produced leafy vegetables and high-value salad herbs; and pathogenic disease treatments for a range of horticultural crops. The company is also investigating other applications of the technology such as manipulation of desired characteristics in the biological material for nutraceuticals, pharmaceuticals and algae.

Global from Day One (www.globaldayone.com)

GD1 is a seed investment fund which has up to $4.6 million available for investment – having raised $2.3 million from private investors and with access to matching co-investment from the New Zealand Venture Investment Fund. It aims to invest into around 25 start-up companies with international ambitions over the next four years. Nationally-focused early stage investor Sparkbox Ventures is managing the fund.

MIG Fund 1 (www.thebcc.co.nz/cms/page.php?view=mig)

Established in 2007, MIG Fund 1 targets potential investments at the seed and start-up phase of emerging businesses. Potential investments can be in any sector and come from across New Zealand, although MIG Angels are particularly interested in potential investments from the wider Manawatu region. With the fund nearly fully-subscribed, the MIG Angels are planning to launch MIG Fund 2 in 2014.

BCC (www.thebcc.co.nz)

Based in Palmerston North, BCC turns innovative ideas into thriving new businesses. It secures investment funding to grow technology businesses, offers management support and mentoring for start-ups, and facilitates the journey from concept to commercialization.

Media contact
Warren Bebb
General Manager
BioLumic Ltd.
DDI +64 6 352 0102 M +64 21 799 257
[email protected]

For GD1, contact David Lewis 021-976 119

Avocado processor eyes bright future

Avocado-processing company, Vocado, with it’s innovative product has been drawn to Tauranga to be closer to investors and business advisers.

Vocado uses an innovative processing and packaging technique to produce easy-to-use and long-living avocado pulp products.

The company this year received a significant investment from Bay of Plenty angel investment group Enterprise Angels to help it relocate its manufacturing facility from Taneatua in the eastern Bay of Plenty to a new factory in Judea.

Twelve Enterprise Angels investors put $335,000 in Vocado, while a matching investment of $250,000 by the Government’s Seed Co-Investment Fund brought the total investment to $585,000.

In addition to the new money, the Enterprise Angels deal has connected Vocado with key players in the avocado industry who will help the company with supply and export challenges.

Vocado managing director Colin Elder said the move gave the company the capacity to expand, and allowed easy access to new investors and advisers.

“We needed some depth of experience and we’ve got that now so I’m absolutely delighted with the people we’ve picked up and who have supported us in this investment.”

Vocado uses a production process which aims to get the avocado pulp into an oxygen-free environment as soon as possible so that the fruit doesn’t brown. The pulp is then packaged in resealable, plastic pouches to keep it fresh and sold to commercial users such as Hell Pizza and Pita Pit.

“We purposely targeted franchises that were already using avocado and we’re taking over from imported products, we’re not competing directly with any New Zealand supplied products and that’s intentional on our part because it’s a small market and we want to be export driven.”

Vocado is working on setting up a second production line in its Koromiko St factory. There was room in the factory for a third production line if needed, Mr Elder said.

The company’s production manager will be moving to Tauranga in January and local people will be employed in the future. “We see about five people employed, with another couple of people per production line that we manage to put in.”

Enterprise Angels chief executive Bill Murphy said the large investment and quality of the investors/advisers had drawn the company to Tauranga.

“It was important to us to have Colin close by the expertise we have here, it makes it easier for us to really engage and help the company.”

The Vocado deal represented a positive trend towards local investing, Mr Murphy said.

“Including the Vocado deal, we’ve invested in eight companies this year and, of those eight companies, three are Bay of Plenty companies.”

First published in the New Zealand Herald on Wednesday September 11 2013

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5 important things about raising tech company capital in NZ

From the outside, raising capital for technology start-ups seems harder than elsewhere in the world. In truth, it isn’t more difficult, just different. This week’s Moxie Sessions on capital for technology companies revealed five key points. Few of these are widely discussed at the moment. Let’s change that: Read more

Minister heads to United States to promote NZ technology companies

Communications and Information Technology Minister Amy Adams leaves tonight for the United States to support New Zealand technology companies and help them expand further into the market.

Ms Adams, New Zealand Trade and Enterprise (NZTE) and the New Zealand Technology Industry Association will host a number of events and meetings for New Zealand technology companies, leveraging off the current international focus on San Francisco.

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Crowd-funding risks worthwhile – Foss

Businesses and individuals with a bright idea will be able to raise as much as $2 million from the public without having to issue a formal prospectus from April next year.

Commerce Minister Craig Foss said that was when new rules in the Financial Markets Conduct Bill would come into effect that are designed to encourage crowd-funding, “peer-to-peer lending” and employee share-ownership schemes.

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MOVAC Invests In 1Above

MOVAC, the venture capital investment firm, has taken a 13% stake in 1Above, a functional drink that helps people fight jet lag and combat many of the health risks and discomfort related to flying.

1Above raised more than $2.4 million in this latest investment round, which was led by MOVAC and included TradeMe founder Sam Morgan and existing shareholders. Investors were attracted by 1Above’s exponential quarter-on-quarter growth since being launched in December 2010 and the quality of the team.

The funds raised will be used to accelerate the company’s global expansion and build the executive team, says Founder and Chief Marketing Officer Roger Boyd. “Attracting the likes of MOVAC and Sam to our loyal shareholder base is a real endorsement of the company’s abilities to deliver and scale. We are still a small company in the scheme of things, but we have achieved great channel successes. For example in WHSmith, in Australian airports, we are the third or fourth brand in terms of sales out of more than 40 in the fridge. We also have a great repeat purchase rate, terrific unsolicited customer endorsement and a loyal base of flight crew and well-travelled ambassadors who are helping grow the company by sharing their own positive stories. It’s a very exciting time at the moment.”

Work to build the executive team has already begun with the appointment of Tony Kerridge as Chief Executive Officer. Tony was General Manager and a shareholder of Caffe L’affare, a business he helped build from inception. It was sold for a reported sum of $25 million to Cerebos, the Australasian sauce, spice and coffee manufacturer, owned by the Japanese beverage giant Suntory. Tony was also an early investor in Charlie’s, the juice company, which was sold to Asahi in 2011 for $129 million. He has been an investor in 1Above since launch and brings years of FMCG sales and marketing
experience to the business, says Boyd. “He will be a great asset in this high growth period.”

New Zealand business investor and advisor Mark Wynne has also joined the board as Chairman. Mark was President of Kimberly Clark South Asia and has more than 25 years global leadership and brand building experience. He joins MOVAC partner Mark Vivian and investment banker and long-term 1Above investor Toby King on the board.

MOVAC was attracted to 1Above by the company’s targeted focus on a deep narrow distribution channel and 1Above’s creation of a new food and beverage business category, says MOVAC’s Mark Vivian. “Roger has demonstrated the potential of 1Above in a relatively short space of time, and this has been further evidenced by the quality of the team that he has attracted. I’m very excited by the range of opportunities that we have in front of us.”

The investment makes 1Above the third portfolio company in MOVAC’s third fund, and one of several investments MOVAC expects to name shortly as it continues to invest in Kiwi companies which have the ability to rapidly scale revenues.

Boyd, a former Fonterra Brands general manager, says the company is now well placed to reach its ambitious growth targets. 1Above is also advertising for new staff to beef up its international sales and marketing team.

For photos, interviews or further information please contact:

Roger Boyd on +64 201 111 201 or [email protected]

Mark Vivian on +64 272 464 936 or [email protected]

Notes to editors:

1Above® – The Flight Drink – www.fly1above.com

Launched in Dec 2010, 1Above® is a functional beverage targeted at helping people fly well and arrive ready to get more from their travels. The company was founded by Roger Boyd a former Fonterra executive after suffering years of jet lag and on the back of rising health concerns. 1Above contains significant dietary levels of six essential electrolytes; 67-133% of your daily B vitamin needs; grape seed extract; and an active ingredient Pycnogenol®, which has been shown in 58 clinical studies to reduce the length and severity of jet lag and support healthy circulation, amongst other benefits.

MOVAC – Venture capital – www.movac.co.nz

MOVAC is an experienced fund manager that provides venture capital to New Zealand businesses that have potential for rapid and large-scale growth. It has made a number of early stage investments over the past decade and is currently investing Fund 3: a $42m fund that provides $500k to $5m of growth capital to companies who have a plan, the potential and the commitment to grow. MOVAC provides capital, expertise and connections.

Pigment firm’s founder impresses investor

First published in the New Zealand Herald on Thursday August 22, 2013

Angel investor and promoter Brent Ogilvie is tickled pink about his latest investment, colour company D’Arcy Polychrome.

The startup – which has come up with a way to encapsulate and deliver colour through dry pigments to colour paint, concrete and plaster – has a disruptive technology, solid IP position and large and multiple potential markets on its hands.

But ask Brent Ogilvie, angel investor and director of science and technology investment firm Pacific Channel, what attracted him to back the Auckland-based company and he’ll tell you first and foremost it was the person behind the venture, founder Rachel Lacy.

“She has an enormous amount of energy, as well as experience in the paint industry,” Ogilvie explains. “Her mother had a chain of upmarket paint stores in New Zealand and her father is an architect, so she literally grew up in that paint and decorative industry.

“So when she said she had identified a niche you’re more likely to believe that and it’s easier to get the data to validate that.”

Pacific Channel was also impressed by overwhelming expressions of interest in the technology from the paint and concrete industries.

The incumbent technology to tint paint involves dispersing a limited range of liquid colourants through a tinting wheel at your local paint shop. But changing the form in which colour comes – from liquid to dry – opens up a world of new possibilities, including the ability to buy colour separately from a base paint, to distribute it directly online, or develop whole unique colour palettes for high profile designers.

The company now has its first customer, Sto, a billion-euro turnover premium paint company, which is using D’Arcy’s “drikolor” system in Australasia.

The company closed a second round of investment in May, bringing in more than $500,000.

Pacific Channel focuses on companies in the clean-tech and material and life sciences sectors. The firm looks for proprietary technology, a substantial marketplace, and people with deep expertise and passion for their field who they can work with, says Ogilvie says.

As an angel Ogilvie says he tries to focus his efforts on what he can he execute at the micro level; helping to develop the D’Arcy Polychromes of our country, for example.

Produced in association with the Angel Association New Zealand.

Read the original article

Kiwi’s landed in San Fransisco

San Francisco-based Kiwi Landing Pad has become an invaluable staging point for big-thinking Kiwi tech start-ups looking to crack the US market. Jamie Morton caught up with a few of them.

The pelican brief

It might be a run-in with a pelican that Chris Smith has to thank for his booming app company.

Thirteen months ago, Smith and his wife found themselves awe-struck by one of the creatures during a visit to Wellington Zoo.

A sign at its enclosure yielded a few basic facts – one being the bird could hold 13 litres of water in its beak – but the couple wanted to know more.

The StQRy smartphone app is being used by zoos, museums and even Walt Disney.

More than 100 clients include Kelly Tarlton’s Sea Life Aquarium, the Christchurch Botanic Gardens, Auckland Zoo, and, of course, Wellington Zoo.

“If you walk around any of the venues you’ll see StQRy codes and it says, ‘get the story’. If you scan it with the StQRy app, that story will pop up to full multi-media.”

The company’s staff has grown to nine and this year it started a new production team to write stories.

Many regions around New Zealand are using the technology, which is quickly branching out in the US.

San Francisco and Seattle have signed on with StQRy to promote their public art, and major companies including Walt Disney and the Getty Centre in Los Angeles have also bought in.

Booktrack: Reading revolution

When explaining his company’s point of difference, Paul Cameron likes to jump back to movie theatres in 1928.

The introduction of “talkies” – motion pictures accompanied by sound – would revolutionise the movie business.

The soundtrack software developed by Cameron’s company Booktrack could do the same for e-books, he said.

The company offers synchronised soundtracks for e-books, including sound effects and music, to provide users a movie-like experience while reading.

“When you watch a film and you turn the sound down, all the emotion dies with it – so we are just bringing that experience to reading.”

Cameron described the soundtrack software as dynamic: “It’ll adapt to what you are reading, when you are reading.”

When a character might open a door, the reader will hear a creak. Orchestral music will sound at a sad scene.

The company picked up the Innovative Software Product prize at this year’s NZ High Tech Awards and has raised millions of dollars from investors, among them Facebook billionaire and Paypal co-founder Peter Thiel.

It has also found support from Warehouse founder Sir Stephen Tindall, the New Zealand Venture Investment Fund and Sir Peter Jackson’s Park Road Post Productions, which provided the sound for The Lord of The Rings and The Hobbit.

Booktrack bases its research and development out of Auckland and recently moved its US office from New York to San Francisco, positioning itself closer to the tech industry.

Its first free title, The Adventures of Sherlock Holmes: The Adventure of the Speckled Band, was downloaded more than 100,000 times in its opening three months.

Mako Networks: Blocking the card sharks

Each time Mako Networks’ communications manager Kevin Ptak emails out a news update to his colleagues, he throws in the latest tale of credit card fraud.

There was the series of attacks in Brisbane. And there were the five hotels in Hawaii where fraudsters managed to mine months’ worth of customers’ credit card details.

“It’s on the rise around the world,” Ptak said.

For Mako Networks, the age of data crime and data security has presented a business opportunity.

The New Zealand-based network management company specialises in security for small site businesses and organisations, such as petrol stations and fast food restaurant chains, ensuring their data and records are secure.

It began in 2000 as YellowTuna Networks, an enterprise created by former Xtra employees Chris Massam and Simon Gamble to provide managed firewalls to small businesses.

Rebranding as Mako Networks a few years later, its technology was taken up by Telecom, the Ministry of Health and other clients.

In the mid-2000s, new rules were brought in to protect credit card users and combat fraud under the Payment Card Industry Data Security Standard.

Large companies with big budgets and staffing expertise found it easy to comply with new rules, Ptak said.

“But the small businesses – the cafes, the florist shops, the corner stores – they’re all having a really hard time and are struggling with this.”

The tighter standards had pushed the fraudsters targeting corporations “further down the food chain” to these small businesses, he said. “And that’s where our system comes in.”

Mako’s research and development is based in Albany, but it’s estimated around three quarters of its new business will be in North America over the next three years.

The company had a turnover last year of $10 million and now has multiple offices in the US.

It was recognised with the Security Innovation of the Year award at the 2012 UK Digital Entrepreneur Awards – and by the Ministry of Business, Innovation and Employment with a multi-million dollar funding commitment to help boost research and development.

“We were a recipient of a $4.2 million grant … and we are using that money to hire talent just as fast as we can find it to support our growth in the US.”

A Virtual Eye on America

Dunedin-based Virtual Eye might be best known for transforming New Zealand sports coverage with 3D animated graphics, from the America’s Cup Challenge to motor racing, golf and cricket.

But as the company has demonstrated in San Francisco, there’s more to it than just fancy things on telly.

It’s been using augmented reality – computed-generated technology that adds a digital dimension to real-world environments – to showcase the best of New Zealand.

Seizing on the America’s Cup, the company is deploying augmented reality displays, viewable by smartphone, to promote Kiwi wine, sailing and culture.

A display was recently set up at San Francisco’s artificial Treasure Island, to tie in with a Maori hangi and music festival staged there.

At the cup base, the technology allowed Emirates Team New Zealand fans to take a virtual tour of the team’s boat, getting up close with all of its components and comparing its size to that of an elephant.

The company – part of Animation Research, a venture co-founded by Ian Taylor in 1989 – is looking to take its technology to nearby Napa Valley wineries.

Meinung said smaller wineries seeking a point of difference had shown an interest – and not just in using it as a display for visitors.

It could also come in handy as a training tool for waiters and bartenders, she said.

While the augmented reality technology was not Virtual Eye’s, the company had developed it in such a way not accessible elsewhere. “We’ve been getting a lot of recognition,” she said.

Jamie Morton travelled to San Francisco as a guest of Air New Zealand.

First published in the New Zealand Herald on Thursday August 15 2013

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