Scott Gilmour named New Zealand Arch Angel 2019

Scott Gilmour has been awarded Angel Association New Zealand’s (AANZ) Arch Angel Award today at the 12th New Zealand Angel Summit in Christchurch.

Scott is an experienced high-tech company founder and director and an active Ice Angels member and former board member. In 2002 he founded the first I Have A Dream project outside the USA to help kiwi children.

The Arch Angel Award is the highest honour in New Zealand’s angel investment community, given to those who best exemplify the quintessential angel and who are champions for the endeavour making a significant difference to New Zealand’s start-up ecosystem. As well as their personal capital, Arch Angel recipients share their time, insights, deeply relevant skills and their networks with high growth start-up companies.

The recipient is chosen by the previous years’ winners.

Scott Gilmour has over 35 years experience in the high tech industry, including 12 years with Intel in the United States and New Zealand. He co-founded a successful enterprise software company in the United States in 1989, ABC Technologies Inc., which was sold to SAS in 2002. He served for seven years on the NZ Trade and Enterprise Beachheads Board. And has served as a director and investor in a number of New Zealand tech companies, including Jade, Nextspace, ResourceWare, ViFX and Winscribe.

In 2002 Scott founded and funded the first “I Have a Dream” project outside the United States to “inspire dreams and enable futures” for kiwi children who are living in material hardship.

As a super active angel investor, Scott has invested in over 60 ventures. He is a founding member of Auckland-based Ice Angels, having joined the network at its inception in 2003 and served on the board for four years between 2006 and 2010.

Current Angel Association Chair and fellow Ice Angel, John O’Hara, says Scott has been a lynch pin of New Zealand’s first formal angel network.

“As a founding member of Ice Angels, I doubt there are many, if any, other Ice Angels members who have been such passionate and committed champions of angel investment. Scott has personally introduced and “closed” more new Ice Angel members than any other I can think of,” he said.

Scott received his award at the 12th New Zealand Angel Summit, held at Pemberton in Christchurch and attended by 160 delegates. The annual event provides a hub for angels to learn and network, and is recognised as one of the world’s top angel events. This year’s summit is exploring what it is about scaling an angel-backed venture from New Zealand which gives it a unique comparative advantage when it comes to creating exponential value.

Former Arch Angel winners include The Warehouse founder and long-time angel investor Stephen Tindall; Andy Hamilton, chief executive of The Icehouse and member of IceAngels; US super angel Bill Payne; Movac venture capital firm founder, Phil McCaw; veteran angel investor Dr Ray Thomson; prolific AngelHQ member, Trevor Dickinson, former AANZ Chair, Marcel van den Assum, ardent angel investor, Debra Hall and champion for kiwi start-ups, Dave Moskovitz.

–Ends–

 

For more information, please contact:

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

John O’Hara, AANZ chair
mob: 021 040 3198 or email: [email protected]

The Angel Association of New Zealand (AANZ)

The Angel Association is an organisation that aims to increase the quantity, quality and success of angel investments in New Zealand and in doing so create a greater pool of capital for innovative start-up companies. It was established in 2008 to bring together New Zealand angels and early-stage funds. AANZ currently has 40 members representing over 800 individual angels associated with New Zealand’s key angel networks and funds. AANZ works closely with NZTE and Callaghan Innovation and a number of private sector partners including Jarden, PWC, Avid Legal, Baldwins, KiwiNet, Uniservices, Amazon Web Services, BNZ and BECA. For more, please visit: www.angelassociation.co.nz

 

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Angel Awards Announced Suse Reynolds, Katherine Sandford and Tim Allan recognised

At its 10th Anniversary Summit in 2017, the Angel Association New Zealand announced two new awards to augment the Arch Angel Award which was first awarded in 2009 to Sir Stephen Tindall and was today awarded to Scott Gilmour.

The Puawaitanga Award recognises the founder and investor-director who best exemplify what can be achieved when committed people draw on their collective skills and experience. This award celebrates an angel-backed venture achieving world class success. This venture has excellent governance, a compelling business proposition and a well-defined strategy for exponential returns.

Puawaitanga – ‘best return on integrated goals’.

The Kotahitanga Award recognises those people in the angel community who have made an outstanding contribution to the industry. It acknowledges those who have selflessly given personal time and energy for a sustained period and contributed to the professionalism, profile and reputation of angel investment in New Zealand.

Kotahitanga – ‘unity and a shared sense of working together’.

The Puawaitanga Award has been presented to UBCO Bikes CEO Tim Allan and investor-director chair, Katherine Sandford. UBCO has developed all terrain, electric utility motor bikes. Since the concept was launched at the 2014 National Field Days, the company has gone on to refine the bike and is now selling it in Australia, New Zealand and the USA.  Impressively, UBCO has also since won a number of awards including a Deloitte Fast 50 Rising Star award, Good Design and Best Design awards, been recognised as a TIN100 Spark Early Stage Company and last year won an AmCham exporter of the year award. Katherine Sandford has Chaired the UBCO Board for the last two years and is a true champion for the company helping it raise several million dollars in growth capital. Katherine has been a member of Tauranga’s Enterprise Angel network for the last four years, has served on the Enterprise Angels’ board and last year won the network’s investor director award.

In making the award, Angel Association Chair, John O’Hara said Tim and Katherine are exemplars of what investor/founder alignment and mutual support can achieve.

“No one scales value in a high-growth tech company on their own. To get traction both the founder and the investors need to be committed to the same end-point. This is clearly the case with UBCO. Tim and Katherine, together with the rest of the UBCO team, have been working together to generate great progress in terms of revenue generation, customer acquisition and to secure capital to amplify that growth to generate success for investors and just as importantly, for New Zealand as a whole,” he said.

The recipient of the Kotahitanga Award is Angel Association NZ’s Suse Reynolds.

Suse has been supporting angel investors, angel backed founders and the growth of angel investment in New Zealand for over a decade. Suse was a career diplomat before taking the leap to “live the startup dream’’.

As well as providing countless hours of free advice and counselling to angel investors and founders over the years, Suse currently serves on the Board of AngelHQ. Suse has also fronted dozens of workshops on topics such as angel investment, governance and has led the Angel Association’s flight program. Suse has been particularly helpful to establishing a number of regional angel clubs around New Zealand.  Suse is a successful angel investor in her own right and most recently has led a couple of early angel rounds into Press Patron and Narrative Muse.

“Suse exemplifies the values which make angel investment rewarding and successful. Her warmth, generous spirit, ambition, professionalism, depth of knowledge and genuine care for investors and founders alike have imbued New Zealand’s startup ecosystem. We are fortunate to have people like Suse leading our community,” said John O’Hara.

–Ends–

 

For more information, please contact:

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

John O’Hara, AANZ chair
mob: 021 040 3198 or email: [email protected]

 

The Angel Association of New Zealand (AANZ)

The Angel Association is an organisation that aims to increase the quantity, quality and success of angel investments in New Zealand and in doing so create a greater pool of capital for innovative start-up companies. It was established in 2008 to bring together New Zealand angels and early-stage funds. AANZ currently has 40 members representing over 800 individual angels associated with New Zealand’s key angel networks and funds. AANZ works closely with NZTE and Callaghan Innovation and a number of private sector partners including Jarden, PWC, Avid Legal, Baldwins, KiwiNet, Uniservices, Amazon Web Services, BNZ and BECA. For more, please visit: www.angelassociation.co.nz

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Summit 2019 Introducing Ben Kepes

As a teaser for those of you attending The Runway and Angel Summit events in a couple of weeks time, Ben Kepes, an experienced angel investor who is speaking at both, has thrown down the gauntlet with a really neat articulation below of the conversations we look forward to having with you as we hunt down how to be effective, additive contributors to the businesses we are backing. You can read more of Ben’s other musings on the tech and startup scene here on his Diversity Blog.

Firstly a quick disclaimer: I, like most of you reading this, am an investor. As such, despite any hint of magnanimity in our decisions, our primary driver for investing in early-stage companies is to make money. If our aims were entirely philanthropic, we’d be giving to charity. We can wrap it up nicely and try and avoid the fact but angel investment, while having some good outcomes beyond dollars, is primarily a capitalistic drive.

That said, I wanted to take the opportunity to follow Suse’s lead in theming the upcoming Angel Association conference being held in Otautahi to add my two cents around the topic of expectations – those of us as investors, of our fearless entrepreneurs, and of the ecosystem as a whole.

The financial realities of angel investing in enterprises that fundamentally have a far greater chance of burning out than they do of success means that we do need to make a good return on those that are successful – if all we wanted to do was get rid of some excess cash, there are far more effective ways of doing so than being an angel investor.

But sometimes, in the search for good financial returns, we lose sight of the unique position we’re in as investors and the opportunities it brings us. We have the ability to shape a future on a number of levels – we can help have an impact on whether an entrepreneur’s journey is positive or not, we can encourage the development of businesses which benefit society more wisely than simply through wealth creation and, just maybe, we can vote with our wallets and help more planet-friendly businesses to bloom.

In terms of the “founder burnout” topic – we’ve seen much attention from the industry about this aspect of the startup journey. We’ve had some pretty raw admissions of the pain and angst that goes hand in hand with startup life. But, as the (purportedly) mature and experienced people in the relationship, our job is to navigate this road with a reasonable perspective. The fact of the matter is that for both entrepreneurs and investors to meet their objectives there is going to be a heap of hard work and painful moments – there’s no point sugar-coating that fact. But hard moments are different from bad behaviour or absence of empathy and that’s where we have work to do.

So I’d like to suggest as we spend our time in our roles as angels, that we think about what we and our investee companies can do differently. What is it that we can bring to the world that changes the conversation? What does exponential value creation mean beyond simply financial value?

In practice, what does a more empathetic approach towards angel investing look like? I’d suggest that it means we’re sometimes happy to achieve a good, short-term outcome that meets the needs of founders, employees and investors, society, the planet or any of the other myriad layers of stakeholders that exist in this world. How about we think about limiting the downstream hard times that come from aiming for the moon shot? It’s potentially about not going for the one in ten exits that need to generate 20x returns, but rather a greater number of more modest outcomes. It’s about being honest with ourselves, our leadership teams and our ecosystem about what is realistic. And it’s about finding a uniquely Kiwi way of doing angel investing.

Enjoy the journey!

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NEW CAPITAL RAISING TEMPLATES – Key Changes

Angel Association NZ has taken over stewardship of industry templates from the NZ Venture Investment Fund for angel and early stage investment transactions. We have recently released 5 new equity investment templates, which you can find here, that update and replace those originally developed over a decade ago. These documents include:

  • Term Sheet (equity investments)
  • Subscription Agreement
  • Shareholders Agreement
  • Constitution (for companies with ordinary shares)
  • Constitution (for companies with preference shares)

A year or so back the AANZ convened a working group of representatives from half a dozen law firms led by AANZ sponsor Avid Legal to update outdated industry templates. We are particularly grateful for input and support from Simmonds Stewart, Chapman Trip and Simpson Grierson. Below is a summary of the key updates and the rationale for these changes.

Explanatory footnotes 

Like all templates, these new documents are only a starting point.  The aim is not to impose a fixed set of terms on parties which may result in an agreement that is out of alignment with the context and intention of their investment.

With this in mind, explanatory footnotes have been included in the new term sheet.  These footnotes are not exhaustive, but aim to provide enough information for new users to:

  • understand the optionality and high-level impact of the various terms;
  • undertake further research, or seek independent advice, on the purpose and consequences of those terms; and
  • have greater confidence amending or removing terms that are not appropriate in the context of the investment.

As always, if in doubt, it is recommended that you seek independent advice from someone with experience in early stage company capital raising.

More efficient structure for follow-on investment rounds

A key structural change has been the move away from a combined “Subscription and Shareholders’ Agreement” to a separate:

  • Subscription Agreement – focusing on the present-day subscription for shares (investment conditions, payment terms, warranty and disclosure regimes etc.); and
  • Shareholders’ Agreement – governing the enduring relationships between founders, investors and the company.

Most early stage companies (and particularly tech companies) will go through a series of capital raising rounds as their capital needs grow over time.  Separating the documents allows the shareholders’ agreement to stand alone from the initial subscription terms so it is more easily (re)used and/or updated/amended, saving parties time and legal costs over multiple capital raising rounds.

Updates for recent market trends and law changes

Those familiar with the old templates will notice a number of shifts in the AANZ templates to align with recent market trends. At a high level, the AANZ templates display a softening of investor rights.  Again, it is important to emphasise that these positions are just suggested starting points.  Where parties land on various deal terms depends on the context of the investment, and the relative negotiating power of the parties. It’s very important to be aware of these factors when agreeing terms.

Some noteworthy changes include:

  • Calculating the issue price per share: The new term sheet clarifies how the issue price per share is usually calculated. Even some experienced investors and companies have struggled with the concept under the old documents. A separate blog post on this topic will follow soon if you wish to delve into the detail further.
  • Board composition:  The AANZ term sheet introduces a more flexible approach to board composition arrangements.  Under the old templates, some founders felt shoe-horned into losing control of the company’s board without giving the issue proper consideration.
  • Tranchingand milestones:  The AANZ templates move away from tranching investments unless the context provides sound reasons for doing so.  If tranching the investment is agreed, then the guidance is that proper consideration should be given to developing appropriate milestones.  The aim is to avoid unintentionally incentivising the company to pursue a milestone where that milestone is no longer in the best interests of the company.  Milestones should be linked to the company’s planned growth path, and align with key commercial objectives.
  • Anti-dilution:  If anti-dilution protections are agreed, then a “broad based weighted average” provision is suggested as the starting point.  This is comparatively more favourable to existing shareholders than the “narrow based” or “full ratchet” provisions that were seen in earlier templates.
  • Founder vesting:  Founder vesting provisions allow the company to take back a portion of a founder’s shares if that founder leaves the company within the vesting period.  The point of founder vesting is that:

o    it is unfair to the rest of the shareholders, particularly the other founders, if the founder leaves very early on in the life of a company; and

o    it may allow the company to use the equity (acquired from the departing founder) to recruit/incentivise the person who picks up the departing founder’s responsibilities.

The portion of founder equity at risk is often negotiated, and the AANZ term sheet provides general guidance based on recent market practice.  However, context is everything and vesting arrangements may be inappropriate if the founders have contributed significant cash, if there are appropriate vesting arrangements already in place, or if the company is at the more mature end of the spectrum.

  • NZVIF specific provisions:  The NZVIF specific provisions have been pared back to just the core reporting rights and prohibited business restrictions to align with NZVIF’s investment mandate. This allows parties to negotiate terms such as co-sale rights if it is desirable.
  • Simplified preference rights:  If preference shares are agreed, the AANZ template’s starting point is a 1x non-participating liquidation preference right without dividend preferences.
  • Regulatory updates:  The AANZ templates have been updated to reflect amendments to NZ’s Companies Act, and incorporate the requirements under the FMCA regime (including suggested safe harbour and eligible investor certificates to assist with compliance).

We intend to review the templates on an annual basis, and have a dedicated email address ([email protected]) for any comments to be submitted to the templates committee for consideration in such reviews.

We believe investors, companies, entrepreneurs and advisers will find the new equity templates user friendly, and a worthy addition to the NZ capital raising landscape.

 

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Lead Partners

NZTE NZVIF PWC

Expert Partner

AVID “FNZC.jpg”

AANZ Summit Sponsors

Callaghan Innovation “UniServices” Kiwinet “Spark”