New Zealand’s need for growth capital

As early stage investors we need to start getting real about the wisdom of our backing early stage, high growth ventures without far more consideration being given to where we source follow-on growth capital.

Even if we only look at last year’s New Zealand Venture Investment Fund’s seed co-investment data where about $50million was invested in early stage companies, the growth capital required for this cohort of companies is likely to be 10x this figure. So we are talking about finding $500m.

This is not just a problem for the investors in these companies; it’s a problem we need to grapple with in partnership with the government and the institutional investment community. These high growth companies are the engines of our economic growth. We can’t afford to drop the ball.

The development of an innovation led economy is widely accepted to take place over three ten-year horizons. We are coming to the end of ‘horizon one’ where the focus has been on inputs. New Zealand has done well here. The number of startups, early stage investors and dollars being invested has trended upwards over this period.

In the second ten-year horizon we should start to see outcomes from these innovation led companies in the form of jobs, export and tax revenue. But to generate these outcomes and see the true benefit of this investment, we need growth capital. Only then will the third horizon truly deliver in the form of financial returns and recycled capital and ultimately higher standards of living.

As I’ve just mentioned, there is no shortage of deal flow. The quality of that deal flow is improving every year too. This is in large part due to Government support for initiatives such as the Lightning Lab and the investor-led Tech Incubators. It is also a result of work others have done to upskill our entrepreneurs and angel investors.

To date, angels and other early stage investors have been able to fund the early growth of the companies meeting their criteria. We have been investing in startup, high growth ventures in a targeted sense for about 8 years but the really exponential upswing in investment has taken place in the last 3-4 years.

Quite logically, there is therefore an increasing and pressing need for growth capital in New Zealand.

This is illustrated in the recently released NZVIF data showing most investment is into existing deals. Angels are having the stay the course longer and dip back in their pockets for capital it could be argued should be coming from deeper more experienced pockets.

We need to give credit to those venture capital firms raising funds to meet the need for growth capital such as Movac’s Fund 4, the $40m fund GD1 is working hard to raise and the $40m fund raised by Oriens Capital. But it is not enough.

Closing the “growth capital gap” is going to need New Zealand’s pension and other institutional funds to broaden their investment mandates to allocate at least 3-5% to the growth needs of our high growth, early stage companies. We must support work Immigration NZ is doing to inject capital from experienced high network migrants into these companies. We need to tap into our rural and regional wealth more effectively. We have therefore been delighted to see angel networks forming in Taranaki and Marlborough reflecting an increasing awareness that high growth, tech based companies can be the source of future jobs and social and economic wealth in the regions. The banks also need to come to the party.

There is a great deal at stake here. We can’t afford “a hands off, market forces will deliver” approach. If ever a NZ Inc approach was needed, it is now.

Marcel Van Den Assum
Chairman
Angel Association New Zealand

Amplifying NZ’s kotahitanga – working together for our people

One of THE best days I’ve had at work this year was the one I spent with fellow judges, Robin Hapi and Ian Taylor, talking to the finalists in the inaugural Maori Economy category of the HiTech Awards.

Without exception these finalists were not only great businesses – spanning startups to mature enterprises – they were also being run by talented, wonderful people.

What excited me though was how vividly clear it was that the values under pinning these businesses were shared by New Zealand’s angel investors.

As I said in my last post, we know angel investors join our networks for the following reasons:

  • To lift New Zealand higher – economically and socially;
  • To be actually involved in doing this – by contributing money, expertise and connections;
  • For the cool company – to be involved with like-minded, positive people; and
  • For the rich rewards – of course they hope for a financial return but the “psychic return” of doing good and contributing to lifting NZ higher is also a key reason why people become angels.

These values align with key values in Maori business such as:

  • Puawaitanga – the best possible return is sought on integrated goals, including but not just financial outcomes;
  • Kotahitanga – unity and a shared sense of belonging to work together for the benefit of your people;
  • Whanaungatanga – acknowledges the importance of networks and relationships, of developing, managing and sustaining relationships; and
  • Kaitiakitanga – which is about guardianship of natural resources but also extends to sustainable enterprise and taking care of assets as kaitiaki or guardians, the owners and trustees of an enterprise are responsible for protecting (and/or growing) resources for future generations.

The call for more Maori engagement in our rock star, high growth businesses and business people is getting louder. The New Zealand economy generally and the Maori economy specifically need more successful entrepreneurs. Did you know that all the net new job growth in an economy comes from new businesses?

Ian Taylor made the point during the day we spent with the finalists that our young people need more successful business role models. So true!!

Many of these budding role models and businesses would benefit from angel support. Providing capital is only a part of what angels provide. The money is just the fuel in the tank. Fuel in the tank means very little without skill behind the wheel and an experienced support crew. Experienced people who’ve been there before, who know who to talk to and where to source the best resources. And like driving a Formula One car, angel investment is not for the faint hearted. It’s a portfolio game with 90% of your returns coming from just 10% of your portfolio ventures.

More Maori engagement in early stage investment, will find the right time and place to come alive and gain momentum but the word is out now … New Zealand’s angel investment community is keen to do as much as it can possibly can to help.

Ends

 

Help benchmark the NZ ecosystem globally

Maximising the success of New Zealand’s startup ecosystem, and the worldwide ecosystem on which we rely requires input from startups themselves.

If data isn’t collected then how do we know what’s working and what’s not? Where our ecosystem could do with more support and where its doing quite well under its own steam. This is why the AANZ is supporting distribution and participation in the 2016 Global Startup Ecosystem Report (#GSER).

The GSER will include insights from more than 20k executives across the globe which will deliver leaders of all kinds; investors, government and support service providers; with an in-depth understanding of how to best attract, accelerate, and sustain startups.

Conducted by Startup Genome (formerly Compass Research), the report also gives startups themselves a benchmark to measure how they stack up to others across the globe.

By completing this survey founders will enable NZ’s leaders to:
• Assess and benchmark the NZ startup ecosystem across 50+ key metrics
• Accelerate the pace with which NZ ecosystem leaders reach consensus on key issues and develop action plans for change
• Attract a greater share of global resources to our region
• Empower startups everywhere to use data in decisions around raising funds, locating an office, and recruiting top talent
.

The 2015 Global Startup Ecosystem Report helped millions of local leaders globally reach consensus on specific challenges and drive action to improve their ecosystems.

By participating in the 2016 Survey, you will help New Zealand voice to be heard among the voices of entrepreneurs globally and accelerate the global startup ecosystem for hundreds of New Zealand’s entrepreneur’s locally and millions of entrepreneurs worldwide.

*All the information you provide in the survey is confidential. Results are published in aggregate values only.*

To participate in the survey click here and share the link with the founders in your ecosystem.

NXT-listed G3 Group uses equity crowdfunding marketplace to raise funds

The Angel Association has been encouraging investors to manage their angel portfolios more actively for returns. Workshops have focussed on the acquisition process – looking at aspects like working with investment bankers, positioning companies effectively, and setting up quality deal rooms.

IPOs are another liquidity option, and there have been some developments recently in the New Zealand market (with the launch of the NXT Market) and the Australian market (with ASX preparing to introduce more stringent criteria around the listing of early stage ventures).

G3 Group was the first company to list on the NXT market 15 months ago, is now raising up to $3m, primarily to fund further acquisitions.

The offer at $0.75 per share went live yesterday at at 6.25% discount to the last traded market price, and is being made available to the public through AANZ member Snowball Effect. This is the first time that a listed company has used an “equity crowdfunding” marketplace to raise funds in New Zealand.

This is an interesting development for New Zealand’s capital market, especially given the importance of the listing pathway to angel investors, and the ability for young listed companies to raise capital efficiently and fund further growth. Here’s a summary of the key details and parties involved.

Background to G3

G3 assists businesses, including a growing international customer base, to manage their data, documents, and customer communications, deploying new technologies for maximum reliability and efficiency.

G3 began life 10 years ago as a small domestic provider of business mail services under the New Zealand Mail brand. Through a series of acquisitions, including Pete’s Post and Fastway Post, it now commands annual sales of over $40m and across its chosen markets of NZ, UK, and Australia.

Since listing on the NXT market 15 months ago, G3 has done what it said it would do – achieve growth targets, expand via acquisition into document and data management, and expand into Australia. In its recent 2016 financial statements, G3 reported an increase in revenue of 8.4% to $43.95m, and an increase in profit before tax of 12.2% to $2.14m.

G3 has completed 8 successful acquisitions in the past 4 years, and is currently looking at a number of new acquisition opportunities. Acquisitions will be focused on businesses which complement existing operations, and data management technology companies that enable G3 to leverage the strong revenues and customer base from its traditional operations towards emerging digital opportunities.

G3’s growth strategy responds to increasing global trends for compliance and chain-of-custody around managing business documents. “Document management affects all businesses large or small” comments G3 CEO Mark Brightwell. “The cost and effectiveness of document workflows is critical to all businesses, and compliance is becoming increasingly complex especially as businesses attempt to run traditional paper based workflows in tandem with new digital systems.” G3’s service expansion strategy is designed to help businesses with this transition from old to new technologies.

The offer is for up to $3 million by way of new ordinary shares at $0.75 per share listed on the NXT Market. This represents a 6.25% discount to the last traded market price. The capital raised will be leveraged with cash reserves and bank debt (as appropriate) to fund acquisitions in targeted growth markets. Click here to view the offer.

NXT Market

NXT is a stock exchange designed for small and mid-sized companies. It is owned and operated by NZX. G3 was the first company to list on NXT, and is now accompanied by Marlborough Wine Estates Group, Oceania Natural, and Snakk Media.

NXT provides a cheaper and simpler alternative to the NZX main board for growth companies by reducing the complexity of the listing and disclosure rules.

Snowball Effect

Snowball Effect has facilitated around 70% of the equity crowdfunding market in New Zealand, and has amassed an investor audience of more than 10,000 investors in 2 years. The marketplace helps cash-hungry growth companies raise capital from the public, or from its network of high net worth investors, many of whom seek active involvement within the businesses they invest in. This new distribution channel enables companies to raise funds efficiently, and provides investors with a simple way to discover and invest in growth companies.

Snowball Effect last made headlines in April when Squirrel raised over $3.4m through its marketplace – beating the previous record of $2m.

G3’s offer will mark another milestone as the first time that a listed company has used an “equity crowdfunding” marketplace to raise funds in New Zealand.

Why is a listed company raising funds through an equity crowdfunding marketplace?

Listed companies are required to comply with ongoing disclosure obligations, which provide investors with recent information regarding the historic and expected performance of each company. Given the ongoing disclosure, listed companies have much simpler regulatory requirements when offering securities (such as shares) that are the same as its securities which are already listed. This generally makes it easier to raise funds by issuing new shares.

Despite the legal and disclosure obligations being simplified for a listed company, the economics are still difficult for a raise of this size in New Zealand. The large brokers provide the key distribution infrastructure to investors in the capital market, but a raise of this size is too small for the large brokers to participate in. Given the lack of distribution infrastructure to support a small public offer, companies raising small amounts are typically forced to consider private funding channels. They often end up looking for local high net worth investors or offshore investors. The capital raising process can end up being expensive and lengthy, and there is significant opportunity cost as management focus is diverted away from growing the business.

The aim is to use Snowball Effect as a simple and efficient channel for G3 to distribute its offer and tap into New Zealand’s capital market.

Snowball Effect launched the first equity crowdfunding offer in New Zealand in August 2014. Over the past 2 years it has evolved into a marketplace for a range of offers, including public, private, and wholesale investor offers. G3’s offer is not technically an equity crowdfunding offer because it is not relying on the equity crowdfunding regulations. However, it is using Snowball Effect’s marketplace as an efficient channel to reach a wide investor audience.

Governance at the coalface of the future

Hear from our very own Debra Hall (long time AANZ executive committee member) on her thoughts on Governance, the topic she delivers on so well for the AANZ Governance Courses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

I always knew that when I retired from my day job, I wanted to be a company director.  I never imagined how hard that would be – after all, if governance is at least in part about strategy, and I’d made a very good living shaping strategy for my many corporate and public sector clients, why would I not be highly desirable in the governance pool?

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READY FOR LAUNCH

SHOWCASING INNOVATIVE NEW ZEALAND COMPANIES THAT ARE SEEKING TO FUND THEIR NEXT STAGE OF GROWTH.

The Investment Showcase is a partnership between NZTE and the Angel Association NZ and will be held on the opening night of the 2016 Angel Summit.

Guests include Angel Summit delegates, local and international investors and other key stakeholders in the NZ investment community.

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Fintech Innovation Challenge is open for entries

If you’re a fintech startup with the potential to transform the financial services industry, then Payments NZ wants to help you.

They want to help you raise your profile in the industry. They’re running a Fintech Innovation Challenge as part of their conference, The Point 2016, in November and the challenge is now open for entries.

It is widely known that fintech is redefining the financial services sector, with startups  gaining momentum and disrupting the traditional value chain. So in the new world of challenger brands and disruption, in order to progress and keep challenging the norm, fintech needs support.

The Fintech Innovation Challenge, sponsored by Paymark, is designed to foster innovation and support Kiwi startups. The challenge gives emerging fintechs the opportunity to present their concepts in front of the entire conference delegation, of around 250 payments and financial services professionals.

Five finalists will compete in a round of quick-fire presentations to win a cash prize of $5,000 as well as mentoring support and associated networking opportunities.

The finalists and runners-up will also have the opportunity to exhibit on the fintech stand at the conference, enabling one-on-one time with key influencers, decision-makers, and potential business partners.

The finalists and runners-up can also attend conference sessions to access global insights and the latest market intelligence from local and international speakers.

How to enter

The Fintech Innovation Challenge is open to new or recently established innovative, technology-enabled startups and entry is free.

So if you’re an innovative fintech startup working in any area of financial services or supporting sector such as cyber-security, digital identity and data analytics, don’t miss the opportunity to expand your network and gain visibility – get your entry in today.

Applications close at 5pm on Monday 12 September 2016.

You will find the application form on the Payments NZ conference website along with further details about the competition.

What do angels need to grow early stage investment industry?

We have interviewed Nelson Gray at the Asian Business Angels Forum and AANZ Summit 2015, in Queenstown. Nelson Gray is an educator, angel investor, mentor, fund manager, and non-executive director of the Scottish Angel Capital Association.

Nelson Gray explains what investors need to understand in order to get support to achieve successful exits and grow the early stage investment industry.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.banner NZAngelSummit16

Follow-on investments

During the Asian Business Angels Forum and AANZ Summit 2015 we talked to Nelson Gray, educator, angel investor, mentor, fund manager, and non-executive director of the Scottish Angel Capital Association.

In this interview Nelson Gray talks about what angel investors should know about follow-on investments.

 

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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What is great about NZ angel community?

The following interview with Nelson Gray, non-executive director of the Scottish Angel Capital Association, was conducted at the Asian Business Angels Forum and AANZ Summit 2015.

Nelson Gray talks about what is great about the New Zealand angel investment community and what New Zealand can do better.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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Engaging young people

We have interviewed Nelson Gray at the Asian Business Angels Forum and AANZ Summit 2015. And in this video Nelson Gray tells us his toughts on the role of angels in engaging with young people.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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The role of government in angel investment

The following interview with Nelson Gray was conducted at the Asian Business Angels Forum and AANZ Summit 2015.

Nelson Gray talks about how important is the role of government in angel investment.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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What angels are doing different in Scotland

In the following interview with Nelson Gray, conducted at the Asian Business Angels Forum and AANZ Summit 2015, he talks about what angel are doing differently in Scotland and what we can learn from this in New Zealand.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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Nelson Gray: Why should angels go to international conferences?

We have interviewed Nelson Gray at the Asian Business Angels Forum and AANZ Summit 2015, in Queenstown.

Nelson Gray explains why angels should go to international conferences.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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International Syndication

During the Asian Business Angels Forum and AANZ Summit 2015 we talked to Nelson Gray, educator, angel investor, mentor, fund manager, and non-executive director of the Scottish Angel Capital Association.

In this interview Nelson Gray talks about what’s the most important thing to remember on working on International Syndication.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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What should angels takeaway?

The following interview with Nelson Gray, non-executive director of the Scottish Angel Capital Association, was conducted at the Asian Business Angels Forum and AANZ Summit 2015.

Nelson Gray talks about what what should drive angels to do what they are supposed to do.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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University Startup Challenge gives chance for student founders to pitch for funding

The University Startup Challenge is back for its second year to give student startups the chance to get funding from investors.

Student-led investment group First Cut Ventures started the University Startup Challenge last year to give university students who have their own startups the chance to pitch in front of investors at the Ice Angels annual showcase.

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Follow These Tips To Get The Best Acquisition Price For Your Startup

As angel investors we always seek ways to improve our investment odds. Through the years I’ve uncovered one sure bet: Invest in companies that bring value to strategic buyers so that the price of the acquisition increases.

To do this, it’s first important to understand what a strategic buyer is. A great person to ask is Craig Mullett, an active Angel Capital Association member and investor with the Angel Investor Forum in Connecticut, and co-founder of AngelHub in his native South Africa. Mullett isn’t your average angel. He’s also founder of Branison Group LLC, which provides buy-side merger and acquisition advisory services to business owners, corporate executives and private equity groups. Mullett says, “The vast majority of startup buyers out there are strategic. They want to buy your company because it can help accelerate their growth and build their own value quickly.”

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Firms vie for slice of Enterprise funding

This week’s Enterprise Angels meeting saw funding pitches from three companies, including Bay of Plenty-based Balex Marine.

Balex is looking to close out its third funding round of $900,000 and has already raised $415,000 in a rights issue from shareholders in its latest round.

Enterprise Angels (EA) is also about to begin beta testing its new online funding platform, AngelEquity, which will allow any qualified investor in New Zealand to take part in an angel investment deal either originated by or syndicated through the early stage BOP funding group, said executive director Bill Murphy. EA has members from Tauranga, Rotorua, Taupo and the Waikato.

Balex Marine has been developing its production and distribution channels for its Automatic Boat Loader (ABL), which allows for remote controlled launch and retrieval of trailer-boats. The ABL is now being used in the NZ market, with 21 marine dealers, four trailer manufacturers and three boat manufacturers on board.

The company has also lined up a distribution deal with Forge UK for Europe and the Middle East, and is developing its Australian network.

To date, in addition to seed and early stage capital from founders and friends of the company, Balex has completed a first round of $600,000, a second round of $1.2 million, and is now almost halfway through its third round of $900,000, with $415,000 raised in a rights issue from existing investors, including Enterprise Angels members.

“The company is looking to raise funds from new shareholders, including EA members that are new to the deal,” said Mr Murphy.

Paul Symes, Balex’s chief executive and a major shareholder, said it was possible the company could complete the latest round through EA members.

“We’re continuing to work closely with Enterprise Angels,” he said.

“However, we are also going to be casting our net a little wider and will be working with other potential investors, including crowdfunding options such as AngelEquity when it goes live.”

Balex will be taking part in the Sydney International Boat Show where it will share a display with Sydney-based Watersports Marine, which is a key dealer for Dunbier Trailers, Australia’s biggest boat trailer company. Balex is currently in discussions with Dunbier on Australian distribution.

This week’s EA meeting also saw funding pitches from Agersens, a fenceless farming agri-tech startup developing a virtual shepherd, and Synthase Biotech developing a proprietary technology known to neutralise lipid peroxides, which could extend the life of bull semen used in artificial insemination.

Mr Murphy said Enterprise Angels had been busy this year with eight follow-on investments and a number of new deals under way.

First published –  NZ Herald 28 July 2016

The Icehouse welcomes new leaders with diverse expertise to its governance

The Icehouse announced the appointment of new directors to its board, in addition to welcoming new trustees to its owner, the International Centre for Entrepreneurship Trust which is a charitable foundation. Greg Tomlinson, Jonathan Reid and Kerry McIntosh are the three new directors to join The Icehouse board, with Simon Bennett, Craig Carr and Franceska Banga joining as trustees of the Foundation.

Their appointments come at a time when The Icehouse is undertaking a review and refresh of its goal to 2020 of enabling a 10% lift in the country’s GDP while the Foundation starts to broaden its charitable reach within New Zealand.

With backgrounds ranging from construction to agribusiness, investment banking to mussel farming, and technology to recruitment; Chairman of The Icehouse Board, Chris Quin, says these entrepreneurs and experts bring a diversity of approach and thinking to The Icehouse which will be critical for its ongoing performance and contribution to New Zealand.

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Asian investors view of international directors

During the Asian Business Angels Forum and AANZ Summit 2015 we talked to Jayesh Parekh, Managing Partner of Jungle Ventures, in Singapore.

In this interview Jayesh Parekh talks about Asian investors’ view of international directors.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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Creating the board of directors

The following interview with Jaeysh Parekh, Managing Partner of Jungle Ventures, Singapore, was conducted at the Asian Business Angels Forum and AANZ Summit 2015.

Jayesh Parekh talks about what should entrepreneurs and investors think about when creating their board of directors.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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Angel opportunities in China

In the following interview with David Chen, conducted at the Asian Business Angels Forum and AANZ Summit 2015, he talks about Angel opportunities in China.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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Expectations for NZ’s angel investment community

During the Asian Business Angels Forum and AANZ Summit 2015 we talked to David Chen, co-founder of AngelVest Group in China.

In this interview David Chen talks about what he would like to see New Zealand’s angel investment community do as a result of ABAF 2015.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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Sucessful cross-boarder deals

The following interview with David Chen, co-founder of AngelVest in China, was conducted at the Asian Business Angels Forum and AANZ Summit 2015.

David Chen talks about what are the key element for successful cross-boarder deals.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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Key Learning from Angel Investing – Asian investors

The following interview with Eric Wikramanayake was conducted at the Asian Business Angels Forum and AANZ Summit 2015.

Eric Wikramanayake talks about the key learning from Angel investing gained from ABAF 2015.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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Still focused after all those years

In 15 years The Icehouse Business Growth Hub has morphed from one owner manager programme and an incubator to a full suite of services for businesses, including an investment arm. CEO Andy Hamilton reflects on a satisfying journey.

After a career spanning law, marketing and corporate investment, one winter’s day in June 2001 Andy Hamilton found himself standing in leased premises in Parnell’s landmark Textile Centre, with two months to organise a programme for owner managers. The BNZ would help source the 20 business owners, but meantime the programme had to be sorted, premises fitted out and start-ups found for the incubator. Working out of Auckland University, Andy was grateful for the support of the University’s Business School, and Geoff Whitcher and David Irving in particular.

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Bay private equity fund targets regions

A new region-focused private equity fund, Oriens Capital, has been launched in the Bay of Plenty and expects to hit its first closing target of $30 million within the next month. It is understood to be the first regional fund of its type in New Zealand.

The Tauranga-headquartered fund has been in gestation for a couple of years and is aimed at filling a gap in regional funding sources. The Bay already has WNTVentures, focuses on incubating extremely early stage tech companies, and the country’s biggest angel investor group, Enterprise Angels.

“There is a gap in the market,” said James Beale, who is chief executive of the new fund’s management entity.

Peter Tinholt will serve as chief operating officer of Oriens Capital, which has also lined up a strong, well-connected board (See story below).

“We will be targeting profitable mid-market companies that have growth opportunities. The biggest problem for all these businesses right now is that there is no formal source of capital, so we are going to fill a really niche space.”

The fund is aiming to complete up to eight investments in companies with an enterprise value of from $10 million to $50million during its initial five-year life, with individual stakes of $3 million to $10 million. Oriens Capital plans a second fundraising round to bring the total up to $60million.

The new fund has a distinctive structure in that investors in the Limited Partnership will also receive a stake in the ownership of the General Partnership, providing full alignment of interests and reduced costs, Mr Beale said.

Mr Tinholt said the fund had been getting good support, with commitments from Quayside Holdings, TECT, iwi and high-net-worth investors.

Scott Hamilton, chief executive of Quayside Holdings, the investment arm of the BOP Regional Council, said Quayside was approached by many private equity funds.
“Oriens Capital opens up the opportunity to achieve the same return profile through having something focused closer to our own backyard. Genuine growth in businesses is genuine capital growth and that’s what we want to see. It grows jobs, salaries and exports.”

Carl Jones, chief executive of WNT Ventures, said Oriens Capital was a fantastic addition to the region.

“You’ve got the full flow-through from the early and seed stage we do and Enterprise Angels and now on to the mid-market,” he said.

“That’s something that hasn’t been here before.”

Enterprise Angels executive director Bill Murphy said the new fund would provide access in the region to funding for all the critical stages of a company’s growth.

“It’s a tremendous outcome for us as a region and very positive for the business community.”

Tauranga MP Simon Bridges said the new fund would be valuable for business and the wider community.

“It’s also a sign of the growing maturity of our area where we are starting to see new financial tools that weren’t around before.”

Bay of Plenty MP Todd Muller said the fund’s promoters had been smart in seeing the opportunity in the mid-market, and the regional pipeline.

“The fund is a great addition to the regional economy of New Zealand and I have every sense it will be successful.”

Colin McKinnon, executive director of the New Zealand Venture Capital Association, said the fund’s focus was unique.

“NZVCA welcomes the opportunity for new investors to get involved in private equity. And it’s interesting there’s been enough interest in a regional fund to lead to its establishment.”

The challenge was going to be around ensuring diversity of the portfolio and deal flow, he said

“But it’s very positive for the asset class.”

Bay of Plenty’s New Funding Ecosystem:

* WNTVentures – incubation

* Enterprise Angels – early stage

* Oriens Capital – growth capital

Experienced executive team at helm of Oriens Capital
Oriens Capital will come into operation with a very experienced executive team and the support of a well-connected board that is expected to help drive deal flow.

Chief executive James Beale has 20 years of experience, including 14 years at Craigs Investment Partners, where his roles included chairing the investment committee.

Most recently, he has been running his own firm, meeting a need in the region to assist private companies in raising capital.

Chief operating officer Peter Tinholt was a management shareholder in successful exporter Taura Natural Ingredients and left after the company was acquired late last year.

Oriens Capital has also identified a chief financial officer who has extensive experience in private equity. All three key executives will also be investing as LPs.

The founding board of the GP will be chaired by John McDonald, a director of Pohutukawa Private Equity, and a former executive of Fletcher Challenge.

Other directors include Neil Craig, founder and chairman of Craigs Capital Partners – who has been a key supporter of the new fund – and Michael Smith, a director of Port of Tauranga and Quayside.

Once the fund is established, Mr Smith and Mr Craig will be replaced by representatives of the three largest LPs, and Mr Craig will move to the LP board.

Other LP director designates include Colin Groves, a former director of M&A for global packing giant Tetra Laval, Richard Hughes, a director of WNTVentures, as well as Mr McDonald and another GP to be determined.

The investment committee will consist of the executive team, plus Colin Groves, Neil Craig and Richard Hughes.

Also designated are Bob Major, who has significant executive experience with Fonterra, and Dallas Fisher, a shareholder/director of NDA Group.

One other committee member will also be appointed. The focus of the new fund will be very much on regional cornerstone investors focusing on regional New Zealand capital growth opportunities, with specific flow-on benefits from within the BOP-Waikato triangle.

“One of the really important features of the new fund is the network of people appointed and the LPs,” said Mr Beale.

First published on nzherald.co.nz on 15 June 2016

Innovators to rub shoulders with investors

The Fieldays Innovations Centre should be at the top of visitors’ lists this year, say the organisers.

This is where inventors – from backyard to established companies – present their latest innovations on a global stage.

Fieldays has announced a new element to the 2016 Innovations line-up – the Fieldays Innovations Capital Event, partnered by Enterprise Angels.

Read more

WNT Ventures partner with Angel HQ

WNT Ventures Management Ltd are delighted to announce an investment has been secured from leading members of Wellington based Angel Investment group, Angel HQ. Angel HQ have a strong portfolio of companies and is the second SCIF Accredited partner that has invested into WNT Ventures Fund 1.

The strength of this group, their investment knowledge and their Wellington location broadens both our networks and access points for IP driven technology to gain early investment capital and experienced advisers. With our hands-on investment approach and the capital intensive nature of early stage investment, our technology incubator structure is an obvious and positive fit for these Investors.

Manager of Angel HQ Dave Allison states “Our club has always demonstrated wide interest and has invested broadly across industries and life stages over the last 6 years. Investing in WNT Ventures was a great way for our members to support a number of teams and a range of IP in one very well packaged opportunity.”

WNT Ventures existing shareholders and Investors warmly welcome this Wellington based Angel Investment Group and the added depth of connections, skills and industry expertise Angel HQ brings to our shareholding.

HTTP://ANGELHQ.CO.NZ

Lead Partners

NZTE NZGCP PWC “NZX” Callaghan Innovation

Expert Partner

AVID “Jarden”

AANZ Summit Sponsors

“UniServices” Kiwinet “AWS” “BNZ” “Momentum” “Punakaiki” “MBIE” “GD1” “WellingtonUniVentures” “Movac”