Angels support “Growing the Pie” report

Angel Association New Zealand (AANZ) whole heartedly supports the findings in Callaghan Innovation’s “Growing the Pie” report released today.

Overseas investment in high growth kiwi start-ups is a critical component of their success and our success as country that grows innovative, globally competitive businesses according to AANZ.

“We need to be aware that it’s not just the capital that is important to ventures looking for fuel for their growth but it’s the connections and experience that comes with that capital that our ambitious start-ups need to be able to scale successfully,” said John O’Hara.

Addressing other points in favour of overseas trade sales and investment John O’Hara noted allegations of so called “selling too early” miss the point. Early trade sales are an important part of our maturing and growing ecosystem and these ventures are part of the pipeline needed to generate unicorns.

“We need these deals to grow our founder experience and expertise. It’s a powerful and legitimate strategy for smaller businesses to grow their market presence via investment and sometimes sale of the business to larger multinationals. These businesses and their founders are part of the pipeline we need to grow the future Xero’s and RocketLabs. The expertise Rod Drury gained in growing and selling AfterMail was absolutely deployed in the creation of Xero,” said John O’Hara.

The recycling of capital and experience feeds more growth and innovation.

“It’s been my experience that not only do exited founders go on to start another business or invest in other founders but most investors in those exited businesses reinvest in other start-ups. We know that 80% of any returns generated when angels are part of a trade sale are channelled back into more start-up investments,” concluded John O’Hara.

To read the report click here.

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Investors have confidence in startup futures

The October issue of Startup Investment New Zealand Magazine is now available here.

In this edition, we shine a spotlight on Kiwi businesses that have earned a place on the world stage. To be successful, Kiwi startups have always had to think and act global from the outset but there’s now a number of factors helping these startups succeed in offshore markets, and often much earlier in their journey. We’re seeing a developing ecosystem of support including government agencies, networks and people with experience at scaling global businesses, as well as investors who have the confidence to support these innovative companies.

The data is supporting this investor confidence. Five times the number of startup organisations successfully raised over $1 million from local investors in the first half of 2018 verse the same period last year, according to the latest Young Company Finance Index. This year almost half of deals are co invested by two or more Angel clubs and funds. Why is the formula to achieve global success so critical? It means little old New Zealand can produce valuable companies winning on the global stage, which attracts investors and ultimately builds prosperity for us as a country.

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Top New Zealand entrepreneur on building successful businesses

Some fascinating insights here from super successful kiwi, Linda Jenkinson who has intimately studied and succeed in scaling and selling businesses.

Linda Jenkinson is one of New Zealand’s most successful businesswomen. She’s been described as a serial entrepreneur, having founded numerous businesses, and was the first New Zealand woman to list a company on the NASDAQ stock exchange. She set up an NGO supporting businesswomen in West Africa, and as well as being a busy and experienced company director, she’s the recipient of numerous business awards. She talks to Kathryn about her beginnings in Palmerston North, and becoming a “relentless advocate” of Brand New Zealand.

Listen here

 

 

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Get More Value From Your (Startup’s) Board

“Who’s on the board?”

A question I hear at least as often as I see a new startup.

Over the past 3 years I have been fortunate to see five boards working in practice, one as member of the management team and the rest as an observer. Alongside that, every entrepreneur we invest in talks about their board: there is good, there is bad, and every one has some ugly.

I wanted to share some observations on boards that I’ve formed in the hope of helping entrepreneurs and directors better select each other, work together, and create value.

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Software the top sector for NZ angel investors

More than half the investment made in early stage companies in New Zealand last year was in the software and services space (53.8%), followed by 17% in technology hardware and equipment.

“Technology is increasingly the engine of growth for all companies, regardless of size” explains PWC’s Anand Reddy.

“It’s no surprise that it’s these areas where the most activity is happening and where angel and early-stage investors are putting their energy. This reflects global trends too. Data generated by Crunchbase notes that the software and services remains the dominant sector for investment.”

Speaking personally, John O’Hara said that his own portfolio leant towards software generated ventures.

“I am particularly proud of Ask Nicely, which produces software for NPS (net promoter score) collection and analysis. This company has already generated tangible returns for a number of the early angel investors. The company is now scaling into the US, with the founder moving to Portland, Oregon in the last couple of months.

“New Zealanders have a knack for practical problem solution and we are increasingly seeing them turn this knack into compelling business opportunities,” said O’Hara.

Click here to find out more about how the startup sector is evolving, and where it’s heading next.

Click here to dive into the data about this asset class.

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A Day in the Life: Josh Comrie

The portfolio life doesn’t choose you. You choose the portfolio life. And that’s what serial entrepreneur, angel investor and general over-achiever Josh Comrie has done. This is how he balances everything.

What time do you wake up?

I start the day at 5 or 5.30am, unless I retired after 11, in which case I’ll treat myself to a 6am sleep in.

Do you have any morning rituals?

Several! First, I make my bed. Fully. I’ve only recently appreciated how important this is:

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Genna Elvin – The Kiwi behind a ‘mini Google’ in Luxembourg

At just 28, Kiwi entrepreneur Genna Elvin has already co-founded a multimillion-dollar tech company and is working with Microsoft and Google.

Elvin and husband Francois Gaspard set up Tadaweb in 2010. Based in Luxembourg, the small data company specialises in human intelligence, providing customers with access to precise and constantly changing online information.

“In a world where everything is about big data, what we focus on is providing our users with a way to basically work with online information, teaching a computer how to interact with online information like a human,” Elvin says.

“We focus on getting better information through replicating the process humans do when they work with online information.”

Tadaweb’s offices are like Disneyland, Elvin says, inspired by Silicon Valley’s start-up culture.
“We invest heavily in a place where people want to be,” she says. “We’re really trying to disrupt our market and really build a technology that no one has ever built before.”

“We have everything from a giant inflatable gorilla, to ping-pong tables, a bar in the office and a giant gong. Each member of the team gets 50 euros when they arrive to make their desk look awesome.
“We’ve created a mini Google in Luxembourg, essentially, with our culture.”

Born on Waiheke Island and raised in the Hauraki Plains-Coromandel region, Elvin didn’t plan for a future in business. At Victoria University, she studied international relations and psychology.

“At that time I started to get involved with my first company, Sun Mana, which was installing solar panels in the Marshall Islands. It was a small project funded by the US government, and that sort of got me bitten by the entrepreneurial bug – although I didn’t know it at the time,” she says.

After graduating, Elvin began working for the New Zealand government in the area of high-risk immigration, receiving five promotions in a year, she says.

“It started off as a holiday job in the immigration department and I worked my way into the intelligence department.”

At 22, Elvin and then-boyfriend Gaspard moved to the other side of the world. “We both had amazing jobs and we decided that we just wanted to try and live in Europe for a few years,” she says.

They first touched down in Brussels, where Elvin did her Masters in international conflict and security, before moving to Luxembourg to start Tadaweb.

“While I was studying, my husband – who is Belgian and I met 10 years ago – had been working on the technology for years and years, and I actually found myself working more on the company than on my studies or my job put together, so we decided to move to the south of Belgium and start our company.”

In six years Tadaweb has grown to a team of 50, with developers from all around the world, and is set to employ another 100 by the end of next year, Elvin says.

The tech firm has received significant investment from some high-profile executives including the former head of mergers and acquisitions at Google Europe and a former head of investment at Goldman Sachs, among others, who are now on its board.

This year Elvin met Bill Gates, the founder of Microsoft and the world’s second richest man.
“It was very, very cool – it was a really rare opportunity,” she says.

“We were fortunate enough to be one of the companies to be selected to go over and present at Bill’s – Microsoft’s – biggest technology conference. It was cool to sort of have a Kiwi presence at that kind of event because there’s not many.”

Elvin was raised by her mother, a teacher who pushed her to work hard at school.
“I didn’t have a lot when I grew up, so I learnt the importance of making the best out of situations and finding innovative ways to make money,” she says. “Throughout my high school years I worked in a fish and chip shop and taught the saxophone to kids at my local primary school.”

Many years later, doing work for Microsoft is a dream come true. Elvin says she likes working with the tech giant as they share the same technical values.

“Nothing drives Microsoft more than tough technology challenges and that’s what gets myself and my team up each day,” she says. “We also highly value their dedication to making the world better and we have already embarked on joint projects with regards to tracking diseases such as dengue fever.”

As a Microsoft official technology partner, Tadaweb has access to its private technology. “We help them to make their technology better, and they help us to make our technology better.”

Her advice for start-ups hoping to partner with large industry players: “If you can provide really big technological challenges to companies like Microsoft and Google – challenge even them – then they’ll be super curious to get involved.”

Elvin is planning her return to New Zealand next year, and is hoping to set up an angel investment hub in the South Island, focusing on areas such as artificial intelligence and renewable energy.

“Our dream is to get into angel investing and try and build up a tech hub in New Zealand – bring back some of our knowledge that we’ve learnt in Europe and the Valley,” she says. “What I really want to do, particularly around the Tasman region or top of the South Island, is build a technology incubator and get young companies through acceleration that have worked in Europe and in America … and into investing and promoting New Zealand’s tech scene.”

Passionate about supporting women in tech, Elvin last year started a scholarship programme at Hauraki Plains College in Ngatea, Waikato – her old high school – to provide three years of funding for a young woman interested in Science, Technology, Engineering and Mathematics (STEM).

“I got lots of scholarship funding when I was going through university so I wanted to give back,” she says.
“Basically, we created the Tada Female in STEM Scholarship which provides three years of funding – $2000 per year – to a young woman that doesn’t have a lot of economic resources, who wants to do science and technology at university.”

Long term, Elvin is unsure if she will sell Tadaweb or take the company public.
“We could potentially sell, we could IPO, or we could hand on the reins to someone else but we are definitely keen to come back to New Zealand,” she says.

“Tada is going to carry on one way or another but we’re definitely, within the next five years, coming home to build something in New Zealand.”

Last year Elvin featured in Forbes as one of Europe’s Top 100 Female Founders and was recently awarded the World Economic Forum’s Woman of the Decade in Business & Leadership Award.

Asked what she’s most proud of, Elvin says raising her son and a successful start-up at the same time. “Jack, my son, is almost the same age as my company and I have learnt so much from both motherhood and building a company.”
Elvin says people should use her as an example of what can be achieved, globally.

“I think that it’s important to reinforce that just because we [New Zealand] are young and maybe far away, that it’s not impossible to go to Europe or America and actually build something amazing.

“That uniqueness of being from so far away and from the kind of place that many people aren’t really sure of can actually be turned into something powerful.

“I’ve had the advantage of talking to the CEO of Microsoft, I’ve had the advantage of talking to some of London’s top VCs and sometimes you can either just be scared because people think you’re not capable, because you’re female, or from New Zealand, and you need to take that and blow them out of the water.”

Genna Elvin
• Age: 28
• Born: Waiheke Island
• Education: Bachelor of Arts from Victoria University, Masters in international conflict and security from University of Kent
• Last book read: Super Intelligence: Paths, Dangers and Strategies by Nick Bostrom
• Last family holiday: Sri Lanka

First Published NZ Herald – 18th November 2017

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24 innovators selected to apply for entrepreneur visa through fellowship programme

24 international Fellows and six New Zealand entrepreneurs have been selected from more than 300 innovators who applied to tackle pressing global challenges in New Zealand through the Edmund Hillary Fellowship (EHF).

The international Fellows will now apply for Global Impact Visas to take part in the programme.

The group selected by EHF are part of the first cohort in a three-year programme run in partnership with Immigration New Zealand (INZ) to provide visionary entrepreneurs and investors with a platform to create positive global impact from New Zealand.

Read more

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Marlborough entrepreneurs launch new investment group 

A new investment group collectively worth millions-of-dollars has been set up in Marlborough with the aim of pumping capital into early-stage businesses in the region.

The initiative has been heralded as a means of encouraging entrepreneurship, and making sure Marlborough businesses with winning ideas get off the ground.

Picton-based businessman Richard Coon, who has founded 10 companies, five in his native United Kingdom and five in New Zealand, set up the investment group.

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Hillary Fellowship chooses six Kiwis for global challenges

Six New Zealand entrepreneurs have been selected from more than 300 innovators who applied to tackle pressing global challenges in New Zealand through the Edmund Hillary Fellowship (EHF).

The group selected by EHF are part of the first cohort in a three-year programme run in partnership with Immigration New Zealand (INZ) to provide visionary entrepreneurs and investors with a platform to create positive global impact from New Zealand. An additional 24 international Fellows have been selected and will now apply for Global Impact Visas to take part in the programme.

Read more

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More money for entrepreneurial women

A government-backed investment fund has gone into partnership with ArcAngels, a group of private individuals focused on investing in female-led business start-ups.
The New Zealand Venture Investment Fund (NZVIF) will invest dollar for dollar alongside ArcAngels through its Seed Co-Investment Fund (SCIF).
ArcAngels chairwoman Cecilia Tarrant, a director of Fletcher Building and former Morgan Stanley managing director, said it approached NZVIF to form the partnership on the back of other relationships the fund already had with angel networks around the country.
Tarrant said the deal means it would have access to more capital than the size of its membership suggested.
“That makes us more attractive for entrepreneurs.”
ArcAngels was launched in 2014 and has around 30 members although Tarrant said it hoped that would grow to around 40 by mid-year.
So far it has invested $1.6 million in eight transactions including into Pictor, Fuel 50, Acuite and Engender.
Tarrant said with the NZVIF partnership it would hope to increase its investments to around 10 per year both through new companies and follow-up investments.
NZVIF investment director Bridget Unsworth said the ArcAngel partnership was the 17th it had entered into through its SCIF.
To date NZVIF and its angel partners had co-invested around $142m into more than 150 companies.
Unsworth said the ArcAngel partnership would double the capital available to companies.
“The past year has seen continued healthy investment activity across New Zealand with more than $60 million invested by angel funds and groups.
“There is a healthy level of syndication of investments among different angel groups meaning they are likely to invest in opportunities throughout New Zealand. Early stage investing is a high-risk investment class and so diversification is important.”
Tarrant said around one-third of start-up companies in New Zealand were led by women or had a major female component but the number of female-led companies which attracted investment was lower.
At the same time the number of women angel investors was also lower.
Tarrant said the group hoped to replicate the success of the New York-based, women-led angel group, Golden Seeds, which has invested more than US$80m ($114m) in more than 76 women-led companies.
“Our principal aim is to make successful investments. But we also want to empower more women entrepreneurs, strengthen their competitiveness and maximise the success of New Zealand’s small business engine for greater economic growth in the long term.
“Many of our members are experienced angel investors with the capacity and capability to be able to provide mentoring and ongoing support to the female-led ventures the group invests into.”
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NZ Angel Values and Expectations

People do business with people. This is a universal truth, but in angel and early stage investment, the people side is writ large.

Angels and founders share a hunger for success and making a difference. It is this trait that aligns us so tightly.

There are a number of other values that underpin an angel investor’s effectiveness. A year or two back it seemed a good idea to explicitly set out these values and how we expect each other to behave, so the Angel Association agreed a Code of Conduct.

It sets out the following values as being important to us:

  • To be passionately ambitious for our ventures,
  • To be collaborative and collegial, and
  • To act with integrity and honesty.

Growing a successful business is hard work. Without passion and ambition, the knock-backs and grind of growing a business would quickly overwhelm most us. Angels share other traits with founders that are critical to success; unremitting optimism and creativity. The ability to positively and constructively address problems is powerful stuff.

Growing a successful business is never done alone. Generosity of spirit is one of the most inspirational aspects of working in angel investment. Angels bring value which goes way beyond their ability to write a cheque. Our experience, networks and expertise are the real rocket fuel. And what’s more, when a founder receives money from an investor in the formal NZ angel community, that investor is bringing over 600 people who share a generosity of spirit and values of collaboration and collegiality.

Another key component of success in the angel world is honesty and integrity. We have made it clear that communicating quickly and clearly is vital. We put great store on ‘doing what you say you are going to do’. When we commit to invest or offer to make an introduction, you should expect we will do it. If we are required to sign a document, you should expect it to be done quickly. Of course this isn’t always possible. We all know “life” happens, but you should expect that if something does get in the way of our doing what we said we would, we will communicate.

We also expect professionalism. Dealing professionally with each other sets the standard we expect of ourselves and our ventures as they grow into world-beating enterprises. Time and energy can be scarce resources in this setting. Sometimes this makes it challenging to operate at the levels of professionalism we are used to in other parts of our lives, but we strive for it nevertheless. Angel investors are also by definition actively involved in the business and with the founder. This level of familiarity also requires us to be sensitive to the need for professionalism.

These principles serve as the foundation for our dealings with each other and are the standards others working with us, such as founders and professional service providers, should expect.

What does this look like in practice?

If you are seeking angel investment should know that our members are looking for a credible entrepreneur with aspirations to grow an internationally competitive business with a well-defined product, customer and market. You should expect professional, prompt, objective and constructive guidance from our members, whether or not you ultimately secure capital.

Ends

Suze Reynolds

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Minister Chagger issues a call to action on women entrepreneurship in Canada and announces $50 million to help businesswomen access capital

Women entrepreneurs from across Canada gather to talk about growing their businesses and accessing new markets
November 9, 2016 – Toronto, Ontario – Innovation, Science and Economic Development Canada
Today, the Honourable Bardish Chagger, Minister of Small Business and Tourism, is hosting the Canadian Women’s Entrepreneurship Conference in Toronto. The Minister invited businesswomen from across the country to come together to share ideas on how more Canadian women business owners can be globally successful. Addressing a crowd of over 200 inspiring women entrepreneurs and the organizations that support them, the Minister issued a call to action to increase the number of women starting and running their own businesses.

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The pitfalls of asking an investor to sign an NDA

There’s one way to lose a potential investor before you even start: demand that they sign a non-disclosure agreement (NDA).
It happens all the time. Someone thinks they have a great idea but won’t send the pitch deck without an NDA first. They’re terrified that the “billion dollar blueprint” will be stolen by some unscrupulous VC guy.
It’s a classic amateur mistake. It means you probably have no knowledge of how the startup ecosystem works. Worse, it means my first impression of you is that you’re an idiot.

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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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Edmund Hillary Fellowship Set To Deliver Global Impact Visa

The Edmund Hillary Fellowship (EHF) is thrilled to be named the implementation partner to deliver the new Global Impact Visa programme for New Zealand, as announced by Minister of Immigration Hon. Michael Woodhouse this morning.

“EHF offers a once-in-a-lifetime opportunity for high-calibre entrepreneurs, investors and startup teams to come to New Zealand to create scalable, global impact,” says Yoseph Ayele, Chief Executive of EHF.

“Aotearoa New Zealand has a unique opportunity to be a world leader in developing transformative solutions for humanity’s most pressing economic, social and environmental issues. Visionary entrepreneurs with fresh new ideas and different ways of doing business can help New Zealand get there.”

Read more

 

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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.

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Failure is forensic: Investors’ views

Do investors run scared when they hear about a founder’s failure, or are battle scars seen as a positive? Is a good idea more attractive than an adaptable team? And are New Zealanders ‘failure tolerant’ enough? Caitlin Salter talks to the experts.

The three types of failure

Fervent Wellingtonian Chris Parkin wears many hats. He’s an entrepreneur, property developer, hotelier, former local body politician, art collector and patron.

His most famous investment was the Museum Art Hotel in Wellington, which he sold to Amalgamated Holdings in 2015 for a tidy sum of $28.5 million.

Readmore

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Lankan Angel Network chairman thoughts on NZ entrepreneurs and angels

We interviewed Eric Wikramanayake, chaiman of the Lankan Angel Network, at the Asian Business Angels Forum and AANZ Summit 2015.

In this video Eric tells us what he thinks of New Zealand entrepreneurs and angels.

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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Benefits to international angel investors – Eric Wikramanayake

In this interview with Eric Wikramanayake conducted at the Asian Business Angels Forum and AANZ Summit 2015, he talks about the benefits to international investors of New Zealand’s entrepreneurial and Angel investment community.

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

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Entrepreneur wants Kiwis to join him

New Zealanders have great ideas, but the commercialisation of them was “near zero”, says Israeli entrepreneur Isaac Bentwich, whose latest venture, CropX, is based on technology from Landcare Research.

“It reminded me of where Israel was 30 years ago,” he said.

Bentwich is the founder and chief executive of CropX, an agritech company formerly known as Verigate, which licensed research from the New Zealand crown research institute. Its first funding round was with New Zealand angel investors including the New Zealand Venture Investment Fund and last year it raised US$9 million in a series A funding round and then a further US$1 million last month.

Investors include Google chairman Eric Schmidt’s venture firm Innovation Endeavours and US-based Finistere Partners which includes a Kiwi, Arama Kukutai, as a partner.

CropX aims to help farmers produce more food with less water and other resources. It makes soil sensors and irrigation controllers for use on commercial farms and an app to help farmers interpret the data they gather.
Bentwich says more global entrepreneurs need to be attracted to the country to help build the innovation eco-system.

Bentwich is a medical doctor by training and serial entrepreneur whose efforts with his previous three companies led to a Nasdaq initial public offering and two acquisitions worth about US$50 million. He discovered the CropX technology while living in Nelson a few years ago and has since migrated the company to Tel Aviv.

“It’s really a co-production of New Zealand technology, Israeli technology, and the US market.”

Speaking to the first-ever New Zealand innovation mission to Israel, Bentwich said, when he was in New Zealand, he was blown away by two things – the quality and quantity of innovation.

Israel is known as the start-up nation with more start-ups per capita than any other country and the second highest level of investment per capita in start-ups behind the US.

Bentwich was initially refused residency in New Zealand because he didn’t meet the immigration criteria and only got approval through special intervention by senior officials.

“You had to have a PhD in biochemistry or biotech. I only employed hundreds of people with these PhDs but that didn’t matter,” he said.

Bentwich said his advice to government officials during his two and a half years in New Zealand was that local entrepreneurs needed access to global serial entrepreneurs who could help them learn the necessary skills to build a successful business.

“Training the local ones is key and then the money will follow. The capital which is critical to a company is secondary to the entrepreneurs,” he said.

With his first company, Bentwich got overseas funding from US venture capitalists in Silicon Valley – their first investment in Israel – and they helped him learn the ropes.

New Zealand’s government recently introduced a new Global Impact Visa aimed at attracting global entrepreneurs to live and start up businesses in New Zealand. The tender process for a private sector partner to run the four-year pilot programme goes out next month.

Bentwich said there’s a lot of potential alignment between New Zealand and Israel which both had small populations, and were “islands” with small populations far away from their markets, having to rely on their resourcefulness. “New Zealand is in a sea of water and Israel in a sea of hostility”, he said.

He’s a fan of the two countries setting up joint funding initiatives to commercialise technology, which would “bring together the mellow Kiwi nature with the caffeinated Israeli one and great things will happen”.

– Disclosure: Fiona Rotherham travelled to Israel with support from the Trans-Tasman Business Circle.

First published on nzherald.co.nz 1 June 2016

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R9 Accelerator Demo Day – 2 June

It would be great if NZ angels could get along to the R9 Demo Day to show our support for the large swathe of public servants in our community who are also aspiring to innovate and create ventures which are disruptive and scaleable….

We’re excited to announce that R9 Accelerator is having its second Demo Day on Thursday 2 June from 2:30pm – If you’re interested in attending please email Edd Brooksbank.

You’ll have the opportunity to invest in teams who are pitching their innovative solutions to improve public service for business customers, meet the teams and find out how they could help you. You will also hear what our panel of experts have to say and know why the R9 Accelerator is important to businesses across New Zealand.

Event details

  • Thursday, 2 June 2016, doors open at 2:30pm for a 3pm start
  • The Embassy Theatre, Kent Terrace, Wellington
  • Presentations will finish by 5:30pm with light refreshments and an opportunity to meet the teams from 5:30pm onwards

Any questions, please email Edd Brooksbank.

 

More information on R9 Accelerator

R9 Accelerator is a real life example of making it Better for Business when interacting with government. The teams are each working on an opportunity to make it better for businesses to interact with government.

The R9 Accelerator is led by the Result 9 Better for Business programme and delivered by Creative HQ to power better public services to business customers.

The R9 Accelerator brings together teams of entrepreneurs, developers, private sector specialists and government experts to work on projects to help solve major pain points for New Zealand businesses and reduce their effort in dealing with government.

The process takes just 14 weeks to generate a customer-validated prototype – ready for further investment. It takes a learn-as-you-go, fail fast approach to develop and test new products and services.
One of the teams – CoHelix. Dan, Nicole, and Alex are helping businesses be compliant by improving the fieldstaff services from regulatory agencies. Find out about the other teams and what they’re working on.

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Angels head to TechweekAKL

New Zealand’s angel investors, a community which actively supports the development of new technologies, will be out in force at TechweekAKL.

Angel Association of New Zealand member’s are involved in two key events, positioned right in the centre of the week-long celebration of all things new and innovative.

[email protected]: 18th May, from 6pm, The Grid – book your seat here.
Tech Innovation Showcase: 18th May, 3.30–5.50pm, Astrolab – apply for an invitation here.

[email protected]

An important event revealing personal accounts of angel-entrepreneur relationships. It is a must-attend evening for founders, and would-be angels.

In relaxed and informal format investors from Flying Kiwi Angels, AngelHQ, Ice Angels and Enterprise Angels will share their personal stories, including their individual entrepreneurial experiences, investment thesis, what they expect from entrepreneurs and how they help grow successful companies – alongside investing their money.

As well as bringing together angels, entrepreneurs and angel groups [email protected] event also brings together key organisations in our New Zealand innovation ecosystem. The event is being held at The Grid, organised by Venture Centre, and is only made possible with the sponsorship of AANZ, alongside New Zealand Software Association and AngelEquity.

To book your ticket and make the most of the opportunity to share a drink, nibbles and some rare ‘get to know you time’ up close and personal with Angel investors click here

The Tech Innovation Showcase

An opportunity for current angel group members to register for a private event focusing on some of the IP rich organisations emerging from government-funded Tech Incubators, Astrolab, Powerhouse Ventures and WNT Ventures. Set up by Callaghan Innovation the incubators are mandated to draw complex IP from Crown Research Institutes and NZ University R&D departments for commercialisation. The event is being held at Astrolab for an invitation click here.

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From the highs and lows of Silicon Valley

KIWI entrepreneurs don’t fail well, says Havelock North businessman Hal Josephson.

“We need to change the mind-set around failure,” he said.

“Unfortunately people here start businesses with friend and family money and may have mortgaged their house, so when you fail you want a crawl under a rock. There are huge ramifications for those types of failures.”

He said where there was a network of investors there was the luxury of “OPM” – other people’s money.

“I was in the United States last year doing interviews with entrepreneurs and investors around failure. The general notion in California is failure is a badge of courage – you have prepared yourself for the future. You are a higher-percentage opportunity because you won’t make those mistakes again.

“Risky investors expect 70 to 80 per cent of their investments to fail. So it is not so bad – you can come back for more money if you feel like you have something and you have a good rapport.
“For my money, if somebody has failed three times I’ll go for fourth. In the United States there is even a conference call FailCon. I wanted to be invited for the 3GO story because that hasn’t really been told.”

It was one of few failures in the 20-year entrepreneurial part of his career.

Hal Josephson talks easily of his 20-year entrepreneurial career on the ground floor of the tech revolution because he is planning to write a book, distilling learnings.

It’s a career of historic failure and success, before the terms “startup” and “angel investor” were coined.

It’s a career that started in the 1970s when the New Jersey teen at Ohio’s Antioch College bought himself a Sony video camera.

“People had never seen themselves on television – it was like a mirror out of time.

“I decided there was an opportunity around it – I didn’t know exactly what it was – and so I started out recording people’s events, ranging from weddings to people doing workshops or giving speeches and they wanted to see themselves and how they came across.”

When he graduated from college he saw further opportunity with cable television.

“The Federal Communications Commission mandated that all cable television operators who had more than 3500 subscribers had to offer what was called Local Origination Public Access Television.”

In 1976, his production company was hired by Grass Roots TV 12 in Aspen Colorado, making TV shows and helping people make their own.

“It was one of the first experimental community television networks that was funded by the Government and donations to basically to see what would happened if you empowered a community to have its own video production.”

His documentaries were picked up by PBS including one about Claudine Longet, who preceded OJ Simpson in that she hired a team of expensive lawyers to escape a murder charge after she killed her live-in boyfriend, Olympian ski racer Vladimir “Spider” Sabich in their Aspen Colorado home. The Rolling Stones wrote a song about her but didn’t release it until 2011 for fear of litigation.

At a New York conference Hal met a video producer and was asked to run workshops in Washington DC for the Episcopalian Church.

That led to Episcopalian Television Network asking him to produce a televised concert featuring John Denver.

“We uplinked it and we connected to cable systems that wanted to carry it around the world. We set up downlinks in parishes all over North and South America, so ultimately more than 100,000 people saw it. It was one of the first live television events.

“I literally walked away from that with a nice cheque, thinking, I could start a company around this.

“I pivoted – I didn’t even know the term at the time – my then video production company into a video teleconferencing and events company.

“About 18 months later, after getting some finance and doing some early work with a lot of the vanguard companies doing this, I gave a talk at the Rocky Mountain branch of Meeting Planners International about how they could run a meeting in multiple locations.

“A guy literally came up to me and said, ‘Teleconferencing is sexy, I’m going to take you public’.

“We decided to take our little company, which wasn’t even incorporated, and work with this guy.

“It was a micro deal on the Denver penny stock market in 1982. There were 37.5 million shares issued at 2 cents a share.”

The company netted $650,000, moved its headquarters to Denver “and we started going after real clients”.

In two years the company doubled its revenue and had $500,000 in the bank but its board decided it wasn’t scaling-up fast enough.

“They merged us with a company needing $500,000 and they took us private, buying everybody out.

“We learned a lot about stockholder management and how you had to put out press releases. A first client actually sued us for putting out a press release because we were forced by the board to announce we were working with one of the biggest companies in America. Their legal arm sued us saying, you must have a contract that says you can’t say you are doing that work for us. But actually they never put that clause in our contract.

“Myself and my partner cashed out. She ended up going with another deal that went public on the penny stock market and I was offered 1 million shares to go into my second deal, which they were doing at 10 cents a share for 30 million shares.

“Then I discovered a whole other range of things – my new partners were dishonest. I wound up having to testify against them 16 months later in front of the Securities and Exchange Commission.

“That was another education, picking your partners.”

With his partner in the first penny stock market company they formed “a company to form companies”.

“Her husband had been head of Bosch America and then Droidworks, one of the divisions of Lucasfilm, but he decided that he wanted to be a start-up entrepreneur.”

Success was “mixed” from 1985 to 1989 when he was asked to join a startup by Trip Hawkins, the original director of marketing at Apple. Trip had left Apple to start successful game company Electronic Arts.

He wouldn’t tell Hal what the new company was about unless Hal joined the venture and signed a non-disclosure agreement.

“I decided, he probably has a good idea so I’ll just go with it.”

The 3DO’s company’s objective was to create a new home video gaming system which was manufactured by various partners and licensees.

It was also a new business model – 3DO would collect a royalty on consoles and games.

“We licensed technology to a company that had no idea how to make money out of it and wouldn’t listen to us.

“Most unfortunately we lost over $100 million for our investors and likely $500 million for our big technology-licensing partners, Panasonic and Matsushita.

“It was a great four-and-a-half year ride and I managed to parachute out, unloading my stock, before the company tanked.”

Trip Hawkins asked him to organise an event.

“He wanted to build better connections between Los Angeles and San Francisco – Los Angeles was the entertainment capital and San Francisco was the technology capital and they weren’t talking to each other.

“He basically said, I want to throw an event for the top 700 people in the tech, film, TV games and entertainment business. They were all either major content producers or publishers and the major studios.

“At the time Matsushita owned Universal Studios, so they were our partner, and they wanted to see something like this happening.

“Trip said, what would it cost to throw a party for 700?

“On the spot I said “say $1 million” and he said, okay.

“I produced the inaugural Hollywood Meets Silicon Valley conference event called Lights, Camera, Interaction!”

Motorola’s PR firm approached him to produce a similar-style event with a $3 million budget, to lift the Illinois company’s West Coast profile.

“This event was big. I shut down Blue Man Group’s New York show and brought them to Los Angeles.”

The performance artists scored Intel TV advertisements on the back of the event and are touring New Zealand in May.

Hal was hired by Australia Multimedia Enterprises (AME) to be its Silicon Valley liaison, making 20 trips Downunder from 1996 to 1999 to evaluate companies.

“The Howard Government shut AME down and it was sold off to a venture capital firm Allen & Buckeridge.

“They asked me to come out and on that trip I met the head of international banking for Westpac. He was seconded to the private sector-led economic development programme for the Sydney Olympics.

“It ran on the periphery of the Games to basically create foreign direct investment in New South Wales.”

He became a consultant, which involved trips to New Zealand because it was a major trading partner.

He built a network of friends in Auckland and met his current life partner Trish Gilmore, originally from Dannevirke.

Hal continued doing regional economic development around high-profile events like the Beijing Games and Shanghai World Expo, escorting delegations of US business people keen to access China.

“I would basically spend 10 to 15 days in San Francisco and 10 to 15 days in Beijing
and Shanghai. I did 40 of those trips between 2003 and 2010.”

They moved to Hawke’s Bay and live in Havelock North where Hal continued creating events.

He attended Rod Drury’s Accelerate 2011, inviting along John Wander of Giantstep Angel Network from San Francisco.

The same year Hal organised the Make Social Media Work for You conference and found persuading keynote speakers to New Zealand was not always difficult.

He invited a “social media guru” Californian friend who said: “If you set me up to play Cape Kidnappers I won’t charge you a speakers fee.”

One hundred attended: 12 from Auckland, 36 from Wellington, 44 from Hawke’s Bay and Jon Leland had a great round of golf.

Hal said it was a “good first event” but he took up his “New Zealand job” with the Auckland University of Technology.

He is Program Chair for The Project – thought leadership events focusing on innovation and creativity in technology and business.

In 2014 the theme was Digital Disruption, in 2015 the focus was Taking Innovation Global and this year it is titled Creativity in Business and Beyond, all utilising his network of contacts.

Contacts drive his world.

“You don’t burn bridges – why would you unless there is a really negative reason? The only people I’ve burned bridges with were dishonest, or have tried to do something illegal or unethical.”

He said technology such as Skype could not displace spending time with people.
“The past 20 years of my life has been projects that grew out of my business relationships and my networks.

“Business is all about relationships. People move from one company to another, but the relationship remains. If you nourish it and it is important to you, it transcends everything, even being in different countries, and you end up doing more and more business.”

First published on nzherald.co.nz 24 April 2016

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Four weeks in: Feeling the pressure at the R9 start-up accelerator

Catherine Taylor from R9 Accelerator’s Tender Advantage team wants to enhance the success of companies doing business with the NZ Government. Here, she shares her experiences over the first four weeks of the R9 Accelerator.

We are at T-2 months to Demo Day.

This means we have just 8 weeks to focus on building a minimum viable product, testing it with the market (allowing enough time to pivot like Princess Odette in Swan Lake) and prepare our venture for Demo Day, the grand event, where we pitch to a large audience of qualified investors.

Read more

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Angel investment hits record $61.2 mn in 2015

Wellington company owner Simon Swallow says he doesn’t expect to get any money back from his angel investment, which is an odd comment from an investor.

He’s put around $1 million into 15 Kiwi start-ups in the past five years for “fun”, driven by a desire to help NZ Inc and is hopeful at least one will turn out to be the blockbuster that at least repays his investment.

“I wanted to give a group of New Zealand entrepreneurs the chance to test the market and even if they fail at their first one they will learn a lot and come back even stronger on the second one,” he said. “I’m backing the jockey rather than the horse.”

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You can’t take it with you: software entrepreneur Scott Houston

According to the old saying, many entrepreneurs sell out for the boat, the bach and the BMW.

But in Scott Houston’s case, things went exactly the opposite way. He sold his boat, his rental, and even his house in order to keep his software business GreenButton afloat during the Global Financial Crisis.

Before Green Button, Houston was Weta Workshop’s IT manager. When the Lord of the Ring’s massive supercomputing power looked likely to be switched off until the next film, Houston suggested renting them out.

Read more

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Business could take off like Lightning

Life is about to get busier for Virginia Fay – and she can’t wait.

The former Dunedin woman has been selected for Lightning Lab XX, New Zealand’s first-ever female founder focused business accelerator.

Ms Fay, who lives at Mapua, near Nelson, founded Patternsnap, a digital library of wallpaper and fabric samples for interior designers.

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Swiss sportswear company launches global equity crowdfunding offer including NZ platform

Australian-founded, Swiss-based premium sportswear brand Skins has launched a global equity crowdfunding campaign today incorporating New Zealand, Australia, the UK, and Europe.

The offer involves raising a minimum of $800,000 in New Zealand and Australia through the Equitise platform and the rest in a parallel offer on the UK-based platform Seedrs. The company hopes to attract $4.42 million from retail investors in an overall fundraising of $9.8 million.

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Crowdfunding laws a turnoff for venture capitalists

Any business that raises capital using equity crowdfunding laws that passed the House Of Representatives on February 10 will have no chance of attracting venture capital investors in future, a leading angel investor says.

Adrian Bunter, a prominent member of the Sydney Angels investor group, says venture capitalists won’t want the hassle of investing in businesses with potentially hundreds of underlying shareholder agreements.

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Lead Partners

NZTE NZVIF PWC

Expert Partner

AVID “FNZC.jpg”

AANZ Summit Sponsors

Callaghan Innovation “UniServices” Kiwinet “Spark”