KiwiNet Research Commercialisation Awards Winners  

Winners of the fifth annual KiwiNet Research Commercialisation Awards, designed to celebrate commercialisation success within New Zealand’s universities and Crown Research Institutes, were announced at a reception in Auckland last night.

The 2017 KiwiNet Research Commercialisation Awards winners are:

Norman F. B. Barry Foundation Emerging Innovator Award
• Dr Geoff Rodgers, University of Canterbury: Seismic damping for buildings and joint implant diagnostics

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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

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Steve Blank – Angels and the Lean Startup #ACAAngelSummit15

Angels Connect NZ series – Bill Murphy from Enterprise Angels reports from ACA Conference 2015

A major highlight of the American Capital Associations annual conference was Steve Blank’s presentation of his customer development methodology – a process which has had an impressive impact on the teaching of enterprise creation in the last decade.

Steve, an academician, serial entrepreneur and investor with over thirty years experience in the technology industry who has founded or worked within eight startup companies, (four of which have gone public), is recognised for being one of three founders of the Lean Startup movement.

His contribution was recognising that commercialisation is a process of testing a series of hypothesis. He currently shares his theories at Haas School of Business, University of California Berkeley, Columbia University and the California Institute of Technology (Caltech). His methods are now being taught in more than 200 universities worldwide, and are recommended by the National Science Foundation and National Institutes of Health in connection with federal grants.

Prior to the lean startup movement and wide spread use of Steve’s customer development methodology investors assumed because they funded a company the entrepreneur would follow a set plan and the board simply monitored it. Investors were treating startups like they were big companies – work out a business plan and then simply implement it.

Great tools were built for execution against plans in large corporations and then used in early-stage ventures and it was assumed this was enough. People who didn’t execute were fired.

Steve proposed that while large companies execute known or proven business models, startups don’t. What angels and other early-stage investors thought they were funding – execution – was actually the search for a scaleable business model that created true value. Instead of assuming entrepreneurs were ‘doing it wrong’ the question that should have been asked was ‘are the critical assumptions about the business plan wrong’?

He has gone on to show that a large percentage of the time entrepreneurs are just guessing about execution. There are no models for early stage venture execution – and no-one is executing in that first year. They are in fact just burning cash conducting a search for that business model – performing a series of experiments to test a problem, solution, a product and a market.

He then went on to create a much-needed methodology to do this work in a robust and repeatable way.

The customer development methodology is now well documented. A good place to start learning more about it is at www.steveblank.com or on his free Udacity Lean Startup course.

Here are the key points Steve shared with angel investors at ACA:

  • Customer development is a process – founders need to get out of building and turn hypotheses into fact by testing the problem exists, the solution is valuable, the product will work and the market wants it.
  • Only then should they build a minimum viable product.
  • Founders need to do the work themselves so that they hear first hand that ‘this or that’ is a bad idea or ‘I wouldn’t pay for it’, read non-verbal signals and pick up on leads to alternatives that might prove to be the solution, ‘Oh we don’t want that – but if you could invent X we would…’
  • Talking to a minimum of 10 to 15 customers a week is the role of everyone working on the startup, with a goal of talking to 100 to 150 potential customers being the benchmark. This number is shown to produce the best results.
  • Then the founder can report back, ‘here’s what I thought, here’s what I learned, here’s what I’m going to do’.

At the conference Steve also pointed out a great thing about this process is tech founders already understand it. The process of defining hypothesis and testing it is used in their work to create and test software and hardware. Striving for evidence based commercialisation is similar to the process engineers go through to work towards deploying programmes and technologies that work.

Its a proven process for minimising time, money and resources.

So, what should angels learn and do that’s different in light of the lean startup movement and in particular customer development methodology?

  • Recognise that often all the entrepreneur has in reality is a hypotheses – ask for evidence or at least what the plan is to collect the evidence.
  • Understand that a startup is a temporary organisation designed to search for repeatable and scaleable executable business model – it is not a business yet.
  • Know the goal is not to stay a startup, but rather to build something which has real value to a set of customers – a sustainable enterprise – and if it scales too you are going to increase the speed of growth and hopefully the size of your returns.
  • Don’t fund people to execute on an idea, that shouldn’t be done on angel money. Before investing check what evidence the entrepreneur has collected that who they say are customers, really are the customers of the product or service they propose. Ask who they have talked to (and how many) and how they have tested their hypotheses. Rather than angels finding out by funding entrepreneurs ideas and blowing $500k, get the founder to go out and do this validation work themselves. Take the time.
  • Then insist you get access to all those conversations and get the founders perspective on the evolution of the idea.
  • Work with founders who are passionate about doing the quantitive and qualitative validation of facts themselves, using a marketing research company to validate the market is not as effective. It is critical is that the people with skin in the game validate whether anything a marketing company tells you is true.
  • Get out of the building yourselves as angels too, make validation your work too – the purpose being to inform the founder’s vision.
  • Your job is not to fund someone to just do focus groups which come up with superficial data such as ’47 say one thing 3 say another’ the skill you’re investing in may be a founder’s ability to pick up on the feedback from the 3 and testing the opportunity to build a business model around them. (47 say sell it for $9.99 – 3 say its an enterprise play and we’ll pay $200k).
  • Once you have a marketing plan aim to test it yourself and see what you learn that’s different from the entrepreneur’s plan.
  • Celebrate the fact that the startup is a search for that executable business model rather than focus on the original business plan and its implementation. Be glad when you and the entrepreneurs learned these new important things instead of beating up the founder for not delivering on a plan.
  • Do the customer validation test yourselves. When you hear ‘I want to order now’, say ‘OK give me $20 I’ll hold it and give you the product when its done’.
  • Invest with the full understanding the initial goal of a startup is to maximise learning not revenue. Returns come from real value-creating scaleable, sustainable business models that are born from that learning.

Bill Murphy

For more highlights from attendees who attended the conference clik.vc/Angels_connectNZ

To meet and hear from international angels and leaders in New Zealand’s angel investment community secure your seat at one the southern hemisphere’s largest international exclusive investor events Asian Business Angels Forum, being held in Queenstown, New Zealand, October 14-15 2015.

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Hon. Stephen Joyce introduces #AANZSummit14

Angel Association New Zealand Summit 2014

In Auckland, New Zealand, October 2014, over 120 Angels, members of networks and funds across New Zealand, along with international guests from the United States, Australia and Singapore came together for 2 days of mind sharing, networking and collegiality.

The event was introduced by AANZ Chair Marcel van den Assum followed by Minister Stephen Joyce who gave an opening address acknowledging the special role angel investors play across the country. The work they do, by choice, contributing to building the confidence, capabilities and capacity of entrepreneurs, investing in them to achieve success was recognised as bringing significant benefit to New Zealand’s economy and its positioning as an innovative and future focused country.

To view this video on youtube click here

ABAF2015, NZ

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New Tech Incubators – addressing the scarcity of great angel food?

Angels are always looking for great deals.

Great deals have three key characteristics – a really clever product, a lucrative addressable market, and a smart team of people who have the skills and experience to deliver that product to the market.

Last week the Minister of Science and Innovation, Stephen Joyce, announced the successful candidates for the government’s new tech incubator programme. This programme aspires to get more of the wonderful products being researched and explored in New Zealand’s Crown Research Institutes and universities commercialized and into global markets.

“Commercialisation” means different things to different people. To an angel investor it means the relevant intellectual property is owned by a commercial entity they can invest in – a startup company.

New Zealand’s record of generating successful startups from publically funded research is patchy. To be fair, government’s around the world grapple with this. It’s difficult and costly. A huge funnel of opportunities is needed to find the tiny proportion of ideas that will kick on to be profitable companies and substantial sums of venture funding are usually needed.

Angel investors are willing the winning tech incubators – PowerHouse (an Angel Association member), Astrolab and WNT Ventures – to succeed.

A key motivator for angel investors is their desire to lift New Zealand higher – economically and aspirationally. They are keen to see innovative opportunities coming out of as yet largely untapped deal sources. And they are keen to help with their money, their expertise and their networks.

Collaboration will be vital – nationally and internationally.

We all have a stake in seeing this initiative work.

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ROCKIT APPLE INTRODUCED IN ITALY

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

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

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

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

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

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

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

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

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

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

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

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

Publication date: 6/20/2014

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Kiwinet Commercialisation Award Finalists Announced

Finalists have been selected for the second annual KiwiNet Research Commercialisation Awards designed to celebrate success within New Zealand’s universities and Crown Research Institutes.

Innovationsfrom finalists include the Springfree™ trampoline, a rare pharmaceutical ingredient generating major export returns, titanium technologiesincluding 3D printed animal implants, pasture meters, artificial muscle technologies, precision seafood harvesting, eradicating bovine tuberculosis, controlling insects with sex, new vanilla products, and a wireless network partnership.

“The Awards celebrate the tremendous work of research organisations turning clever science into commercial value. Our 2014 finalists are some of the best at this, developing a new wave of exciting innovation that will create new companies, products and servicesto grow our economy,” says KiwiNet General Manager Dr Bram Smith.

“Many exciting stories of research commercialisation success are not well known. By putting the spotlight on the people and research organisations changing the commercialisation landscape in New Zealand, KiwiNet aims to inspire others to similar success,” says Smith.

The 2014 KiwiNet Research Commercialisation Awards finalists are:
AJ Park Commercialisation Collaboration Award
– Eradicating bovine tuberculosis with TBfree New Zealand, (Landcare Research and TBfree)
– Titanium Technologies New Zealand (TiTeNZ), (University of Waikato, Callaghan Innovation, GNS Science, University of Auckland, the Titanium Industry Development Association (TIDA) and a number of industry partners)

Researcher Entrepreneur Award
– Associate Professor Iain Anderson, StretchSense – entered by UniServices, University of Auckland
– Alistair Jerrett, Seafood Technologies, Plant & Food Research Minter Ellison Rudd Watts Research and Business Partnership Award
– Heilala Vanilla, entered by Massey University
– Controlling Insects with Sex, entered by Plant & Food Research
– Precision SeafoodHarvesting, entered by Plant & Food Research
– Wireless Network Partnership (University of Canterbury and Tait Communications), entered by

University of Canterbury Commercial Deal Award

– Springfree™ Trampoline, entered by University of Canterbury
– Kifunensine, entered by Glycosyn, Callaghan Innovation
– C-Dax Pasture Meter and Massey University’s Centre for Precision Agriculture, entered by Massey University

The BNZ Supreme Award will be presented to the entry which demonstrates overall excellence in all core areas of research commercialisation.

The KiwiNet Awards judging panel comprises Dr Andrew Kelly, Executive Director at BioPacificVentures, Sharon Hunter, one of New Zealand’s best-known business women and Director of Hunter Powell Investment Partners, professional director and ex-Angel Association Chairman Dr Ray Thomson, and director and executive advisor Helen Robinson, the founding CEO of TZ1.Lead judge Dr Andrew Kelly says, “It’s great to see another strong new set of applicants this year,
demonstrating that innovation is continuous in this country. These innovations are important as the next generation of the science and technology successes our economy is now seeing like Xero, A2 and Pacific
Edge.”

Kelly adds that the bigger pool of entries has been stimulated by the expansion of KiwiNet, ‘which is now the driving force in research commercialisation in New Zealand.’

Paul Stocks, Deputy Chief Executive of MBIE’s Science, Skills and Innovation Group, says MBIE supports KiwiNet’s collaborative approach to commercialising innovative research. “Research commercialisation is vitally important for New Zealand, as it can be a major driver of economic growth. KiwiNet is helping to
create greater commercial outcomes from our publicly-funded research, which will benefit all New Zealanders.”

The Kiwi Innovation Network (KiwiNet) (www.kiwinet.org.nz), is a consortium of 13 universities, Crown Research Institutes and a Crown Entity established to boost commercial outcomes from publicly funded research. KiwiNet partner organisations include WaikatoLink, Plant & Food Research, Otago Innovation Ltd, Lincoln University, AUT Enterprises, AgResearch, University of Canterbury, Callaghan Innovation, Viclink, Landcare Research, Cawthron Institute, ESR and NIWA. Principal support is provided by the Ministry of Business, Innovation & Employment (MBIE).

The Awards are the pinnacle of KiwiNet activities designed to build awareness and inspire research commercialisation success. Sponsorship support is provided by BNZ, Minter Ellison Rudd Watts, AJ Park, MBIE and Sciencelens photography.

BNZ director – value chain Jason Lewthwaite says New Zealand is increasingly recognised for its innovation, design and engineering which creates a huge opportunity for boutique products and services in overseas markets.

“The early stage innovation commercialisation that KiwiNet fosters combined with market contacts and experienced business partners such as banks and business organisations will allow New Zealand businesses to bring valuable new products and services to niche markets internationally.”All finalists will deliver a presentation in the final stage of judging on 11 June in Auckland. Winners will be announced at a reception that evening.

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NZ leads Europe on University R&D Commercialisation

Unlimited’s report on Australasian University Research and Development Commercialisation puts New Zealand ahead of Europe but behind the US.

Professor Phillip Butler of Canterbury University and his son Dr Anthony Butler commends early stage funds for the role they play in catalysing ventures and bringing skills contacts and experience to startup ventures. “I’ve been in the university system for less than ten years, and even in that short time I’ve noticed a cultural shift,” Anthony says. “It’s no longer the view among academics that you only get involved in commercialisation to make money. There’s now a recognition that if you have a good idea or product and you want it to have an impact on society, then you need to take it through to commercialisation.”

Phil Butler says the development of technology transfer organisations such as Canterprise and UniServices at Auckland has been essential to help spinout companies like theirs get cracking.He is also of the view that New Zealand leads Europe on commercialisation, while lagging behind the US. “There are a variety of mechanisms out there now and I think that variety is a strength.”

Yet there is still plenty of room for improvement, according to the Butlers. The notion that the process of commercialisation involves two distinct phases in which the scientists step aside for the money men is a persistent fallacy, Anthony says.

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Lead Partners

NZTE NZVIF PWC

Expert Partner

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AANZ Summit Sponsors

Callaghan Innovation “UniServices” Kiwinet “Spark”