#ABAF15NZ Speakers – David Chen

Meet the speakers #ABAF15NZ – David Chen

The 2015 Asian Business Angel Forum takes place in Queenstown, New Zealand, 14 – 16 October 2015.

Hosted by the Angel Association of New Zealand, the 2015 Forum brings together leading investors from around the world to share their knowledge and join together in celebrating this small country’s big contribution to early stage investment.

The AANZ is pleased to be able to bring David Chen – Co-founder, AngelVest to ABAF to share his insights and experience at ABAF.

Register-now

Mr. David Chen is a seasoned business leader and entrepreneur with over 20 years of global experience focusing on investments, operations, and business development in China and the United States. He has led and participated in M&A transactions valued at over US $7 billion and has deep investment experience in China and the US.

A co-founder of AngelVest, an investment interest group helping individual angel investors identify and invest in compelling early stage companies in China, he has grown the group to be one of the largest angel groups in China. With over 80 members in Beijing, Shanghai, and Hong Kong they have funded over 35 companies.

Entrepreneurs typically seek to raise from $US100-$500K from AngelVest and enjoy the benefits of continued interaction and mentorship by its strong group of angel investors. They provide hands-on execution support to help companies achieve their strategic and operating goals.

Unlike the United States and other developed countries, there are few, if any institutionalised angel groups in China today.  AngelVest is the leading the industry in China with presences mainly in Shanghai, Beijing, Hong Kong and Singapore.

Increasingly, AngelVest is actively pursuing middle-market cross-border investment opportunities between China and Europe/USA while capturing the growth opportunities in China.

Mr. Chen is originally from New York and has been living in Shanghai for the last eight years. He started as an Engineer with a BS in Electrical Engineering from the University of Rochester and MBA from Harvard Business School, as well as studying Chinese at Peking University.

He came to Angel investing through his experience as a founder and manager of technology start-ups (as lead on strategy, operations, finance), his work with large institutions (including Salomon Brothers, Advanced Micro Devices, Honda Motor) and specialty boutique investment banks, where he helped a number of clients pursue and complete cross-border M&A (particularly China inbound) and financing transactions.

Mr Chen is a highly sort after thought-leader, particularly on the subject of cross-border investments. He has presented at the APEC Accelerator leadership summit, is a member of the Harvard Business School Business Angels alumni dedicating time and commitment to providing investor expertise as a judge in the HBS New Ventures Competition for the “best investment” category.

You can follow Mr Chen’s activities on twitter @AngelVestGroup

To meet and hear from Mr Chen in person, along with a host of angels from New Zealand’s angel investment community and the world make your New Zealand connection and secure your seat now at one the southern hemisphere’s largest international exclusive investor events Asian Business Angels Forum, Queenstown, New Zealand, October 14-15 2015.

 ABAF2015, NZ

Please follow and like us:

Manuka Health mulls capital raising options

Former AANZ Chair Ray Thomson provides some insights on the next steps for angel-backed Manuka Health.

Manuka Health, the functional food and dietary supplement company, is reviewing capital-raising options to help fund a global roll-out of new products said to boost the antibacterial qualities of manuka honey and its pipeline of research and development.
The private company has ruled out a public listing at this stage but chief executive Kerry Paul said it was considering other options including new investors who bring more than just capital to the table.

Manuka Health was founded in 2006 and exports 90-plus products based on propolis, royal jelly, bee pollen, and manuka honey to 45 countries. It has annual turnover of more than $50 million, 80 staff, and is owned by a number of private shareholders including Paul and family interests associated with chairman Ray Thomson, and institutional investors, Milford Asset Management and Waterman Capital.

Manuka Health holds the worldwide licence and pays royalties on sales to Kobe University of Medicine in Japan for the new technology, which combines encapsulated manuka honey with plant-derived cyclodextrin, “creating a free-flowing powder that can easily be added to foods and beverages for ease of delivery of health benefits,” according to a report on the company’s website.

Read more on www.scoop.co.nz

Please follow and like us:

Angel evangelist making the New Zealand connection

John May is founding chair of America’s Angel Capital Association (ACA). He’s championed the cause of entrepreneurs and angel investors all over the world since realising big organisations weren’t for him, establishing five US angel groups and working internationally to establish more. He’s co-authored books on the subject, is managing partner of angel investment firm New Vantage Group and is investment director for UK-based global venture fund, Seraphim. He came to New Zealand to meet our angel community setting the scene for ABAF 2015 in October, Queenstown, NZ. We asked him why?

I loved it when I was here before, but I wanted to come back for longer, not just for a four-day thing… to get a better feel for the New Zealand business community, the angel community, but also the neighbourhood.

It hasn’t disappointed.

But to what end, exactly?

I’ve been around the world running the (Ewing Marion Kauffman Foundation’s) Power of Angel Investing series and trying to get a better feel for what’s going on in different countries and how best to collaborate.

We’re not looking for countries that have the best deals to go write cheques, that’s the big fallacy: we’re not running international angel development workshops and building global networks because we’re deal orientated; we’re movement orientated.

What happens when your company wants to go from here to a bigger market in Southern California? Wouldn’t it be nice if there was communication between the angels of Southern California and the angels backing the company here? You don’t want to hire a lawyer in Southern California to tell you how to run a business in Southern California… wouldn’t it be better to have mentors and supporters in Southern California who are co-investors.

So you wanted to come here to build connections?

Yes and more. One of my big things is to get more overseas investors to come to our ACA conference to learn what we are doing.

Here’s some sobering statistics: even in the US – the largest economy in the world, the largest venture capital community in the world – we believe only about 5% of households are wealthy enough to be angels, not friends or family, but proper angels. And my definition of a proper angel is an individual who invests their own money in a stranger’s business, in a minority position, gives their time as well as their money and there is no one else in-between.

And of those 5% who can, we think there’s only 5% who do. And now we’re getting to the bottomline: not only do we think that only 5% of those who can, do, only 5% of those who do, ever do it in a structured, disciplined, portfolio diversification, networked group way and I bet New Zealand is pretty similar.

 

JohnMay_Dinner

 

You really push the group concept. But why is it so important for that 5% of 5% to be part of an investment group?

What we’ve learnt is that we need to diversify our portfolios, which means getting out of our comfort zones. It also takes more money than we have personally to take a company that’s going to be significant from startup to breakeven and it takes time to do due diligence on the opportunity. Who’s going to make the phone calls? Who’s going to have the meetings? Who’s going to do the market research? So if you decide you’re going to diversify, if you’re going to do due diligence to make you comfortable, and you’re going to have enough money on the table to make it a viable company, what you learn very quickly is you can’t be a solo angel and do this.

What our companies need are cheques for US$250,000 to US$1 million and to deliver that and diversify your portfolio you need to be in a group, even better, a syndicate of groups – that’s the big movement in the US right now – the syndication of groups.

Why is that so important?

Well if you need US$2 million, it may be above the capacity of an individual group, but you may be able to bundle four angel groups or funds together and all of a sudden you’ve got a couple of million dollars, so then the company can finish developing their product or get their first sales and really get on their way.

 You wrote the book: “Every business needs an angel” – why does every business need an angel?

The real wink is every high-growth, successful business, as opposed to a mom and pop store, needs an angel because it’s lonely out there doing it on your own; you need a mentor; you need risk capital; there’s so many reasons why angels are important for companies…an entrepreneur gets a board member, a friend, an adviser.

Doesn’t it depend on the angel they get?

Yes, and it depends on the entrepreneur. Some entrepreneurs just give lip service to the help; they really just want the money. Then there’s the lip service of an angel who says I’m going to be your friend, I’m going to be your adviser, I’m going to be available and then doesn’t answer the phone. It doesn’t always work. But it’s an art not a science.

The real wink is getting the right angel with the right entrepreneur because some angels can be great board members, but aren’t good at helping to find staff, sales or marketing; while some are good as a shoulder to cry on, but aren’t good at financials; some are good for startup and some are good for growth companies. That’s another reason why groups are better than individuals.

The right angel should always be a joint decision between the entrepreneur and the investors. There should be a chemistry between them and there should be a staging of the need, so the right investor for the company at the right time.

Should angel investors always have representative on the board?

Advisory boards are very important, but companies don’t need boards of directors until they’ve grown a little bit.

It’s also very important for [the chosen investor representative] to have a way of communicating to the other angel investors, so the entrepreneur doesn’t have to waste their time communicating with all of them.

What’s the most common mistake entrepreneurs make when they seek investment?

Thinking they know it all. It’s quite rare to find a coachable, industry-savvy, less egotistical entrepreneur their first time around.

I’m a big believer in investing in second-time entrepreneurs. A serial entrepreneur is a wonderful thing to invest in, because someone has already paid for their mistakes the first time round. But that’s another thing that’s fascinating about here: New Zealand is a place where almost everyone is a first time entrepreneur.

Entrepreneurs need to understand the first thing angels look for is management, management, management; the second thing is a large market; and the third, if we’re smart, is the product or service, the technology, whatever. Yet most entrepreneurs want to sell us on the fact their thing is faster, cheaper, better, slicker, more fun first. But we invest in the jockey not the horse.

The problem is an entrepreneur has to have the dream and the ego to handle it. So there is a natural tendency to want to invest in someone who has a lot of confidence and a lot of energy. But if they are really going to grow their business into a significant company, they need to be humble enough to understand they can’t know everything: they are going to have to hire people; they are going to have to listen to people, so finding someone who is coachable is important.

What’s the most common thing angels do wrong?

Hearts over heads…and not providing enough tough love once we’ve invested: are you being direct enough; are you talking about the exit; are you educating the entrepreneur; are you telling it like it is instead of waiting until it gets worse to say something? That’s why you have to have the right chemistry; you can’t be in awe of each other. The entrepreneur shouldn’t think we’re just money and we shouldn’t think they are running the company so we shouldn’t give them our frank opinion.

Why do you love this area so much?

It’s the people. It’s the entrepreneurs. They are so important because they make businesses; they make money. We benefit from the vision, the energy, the business model of the entrepreneur…so the excitement for me is being a part of this journey.

Plus it’s what it does. It boosts any economy, any city to find a way to finance innovative new technologies and products. Economies will go backward if they don’t stay in touch with newer, faster ways of meeting their needs. And it creates jobs, futures. Major corporations are net job losers; they cut costs, find efficiencies. All the research shows startups and SMEs are the net job creators of modern economies.

But angels also have to make money in the end or it’s a losing proposition and will fade away.

JohnMay_IceAngels

What should we be doing more of in New Zealand to improve our angel ecosystem?

Find as many ways as possible to educate the media, the government, the wider community that supporting high-growth companies matters; make people aware of the benefits to the entire economy of making this work, of encouraging more entrepreneurs, of making smarter entrepreneurs and of helping to make more and smarter angels.

We need to encourage more angels to increase the amount of capital available, because the more capital there is available the more likely people are to diversify and thus the more capital there is for different sectors to develop new products, and we need more angels to bring different skills into the mix. There is so much going on in social media and some of the new technology, for example, that you almost have to find a way to search out the recently cashed-out, under 40-year olds because they can make a material difference to understanding the current consumer market for those sorts of companies. It’s also hard to be an investor and help an entrepreneur and do due diligence on them if you don’t understand what they are doing.

We tend to talk to ourselves far too much.

by Lesley Springall

To meet and hear from international angels and leaders in New Zealand’s angel investment community and make your New Zealand connection 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.

ABAF2015, NZ

Please follow and like us:

The idea: Ken Erskine of The Icehouse

The wind beneath the wings of New Zealand’s angel community, Ken Erskine talks about what makes a compelling, investable business.

You’ve seen lots of ideas for startup businesses come and go over the years. What factors have you observed make for a good business idea?

A good business idea can often be one that initially you’re not really sure if it’s a great idea or a really bad one – it’s usually one that is something in between. What I mean by that is if something’s a really great idea then the obvious question is ‘why hasn’t someone done that before?’.

The opposite scenario is also true – if it’s a really dumb idea, then there’s a good reason why no one has done it. So it’s that area in the middle where I generally see the best ideas coming from.

Often those ideas are also inspired by people’s insights gained from working in or around a particular industry or market. The mad inventor-style ideas – the random ones that just pop into someone’s head in the middle of the night – are generally the ones that are really hard to commercialise without that previous understanding of how the existing market behaves and operates.

When asking people to adopt any new idea you’re asking them to change their current behaviour, and getting them to do that comes down to how compelling a proposition you have to meet their unmet need or want.

The other thing about ideas is you have to understand the time and money it takes to get a new idea to market.

Therefore having an innate knowledge of what the latest trends and developments are in the marketplace, and trying to move ahead of the curve to where the market is going to be – not necessarily where the market is today – is really important.

What are the key factors for taking an idea and turning it into a viable business?

The key thing first of all is to validate the idea and establish if there is true a market need. One of the typical things that people who haven’t started a business before will say is ‘first I need to patent my idea’ and they can spend a fortune doing so.

My suggestion for non-research intensive ideas is, before you invest money on patenting your idea, first of all establish if there is a real market opportunity for it. You don’t need to say what your invention is – you can go out and ask open questions about the market or the need – but there’s no better time to establish if there’s a real opportunity than before you actually build or develop the thing.

Also, an idea on its own is never enough. Very rarely does anyone have a unique idea that no one has had before, so part of the challenge is doing something with it in an appropriate manner. As an entrepreneur it’s really about keeping that balance between dogged determination and resilience, and knowing when to say ‘I’m not getting enough traction, let’s move on to the next idea’.

What I really like to see is a business that’s trying to move towards break-even or commerciality as quickly as it can. You may be commercially sustainable on day one, but it’s important to always have a keen eye on how you get to a point of being cashflow positive. Because without customers and money what you can have is a really expensive hobby. And there’s nothing wrong with having a hobby as long as you realise that’s what it is.

Some entrepreneurs have really interesting back stories to their ideas. What role do you think having a great ‘story’ behind an idea makes?

Every startup needs to have its own story and that story has to resonate. So I think it’s fundamentally important as a way to communicate between the founder and potential partners or customers. People love stories, but a key thing to understand is you have one mouth and two ears; you want to use your story to engage in a dialogue, so you can bring others along on the journey.

What’s a key piece of advice you’d have for anyone looking to turn their idea into a real business?

While the idea is key and a catalyst to get you started, it’s what you do with the idea that makes the difference. Thousands of people have a millions of ideas every day; it’s what you do with that idea and how you bring it to life that’s most important. In business, that involves relating your idea to potential customers and markets and allowing others to join in your idea and share it and help you develop it to meet their needs.

Coming up in Your Business: Etsy is a massive global marketplace to buy and sell all things homemade. So what are some of the great Kiwi businesses making a living out of selling on this platform? If you’ve got a story to tell on growing a small business through Etsy, drop me a note: [email protected]

As published NZ Herald 6 May 2015

Please follow and like us:

Equitise raises $211k in first campaign

Equity crowd funding closes another deal in NZ. Equitise, together with PledgeMe and Snowball have now raised $8m for their ventures. It was clear at the recent Angel Capital Assn conference in San Diego that these platforms are bringing valuable additional funding into the early stage funding market. We need to be sure we keep reminding those taking part of the risk inherent in these investments.

Equity crowd-funding platform Equitise has closed its first campaign after successfully raising $211,000 for Tourism Radio NZ.

The company, which provides location-specific digital travel guide commentary through mobile devices in motor homes and rental cars, says it will use the cash to develop technology, expand its sales force and prepare the business for expansion into Australia.

The 30 investors that took part in the crowd-funding campaign, which valued the firm at $1.2 million, now hold a combined stake of 18.2 per cent in Tourism Radio.

The company, which had revenue of over $950,000 last year, said the investment would drive future revenue growth of 50 per cent year-on-year.

Equitise managing director Jonny Wilkinson said the platform had received a lot of interest from potential issuers since completing its first campaign.

“People have obviously seen that out first deal has closed [successfully] and that has provided some certainty and surety in people’s minds,” he said.

Equitise gained authorisation to operate from the Financial Markets Authority in December.

Wilkinson said Equitise expected to announce its second campaign within the next few weeks.

Equity crowd-funding, which became possible in New Zealand last year through a once-in-a-generation overhaul of securities legislation, allows companies to issue shares to the public through online platforms.

More than $7 million has been raised by three local equity crowd-funding providers – Snowball Effect, PledgeMe and Equitise – since August.

As published  NZ Herald 6 May 2015

Please follow and like us:

Publons pair get scientific publishing moving faster

Frustrated by the glacial pace of academic research, Daniel Johnston and Andrew Preston decided to propel scientific publishing into the 21st century.

“Everybody thinks of science as moving at a blistering pace, but it’s actually one of the most technologically challenged industries out there,” Johnston says.

Preston was working as a physicist in Boston when he and Johnston dreamed up Publons, an online platform for researchers and academics to review and discuss scholarly work and, for the first time in centuries, to earn credit for their efforts.

The idea won Publons $300,000 in startup funding via the 2013 Lightning Lab accelerator programme. According to Johnston, who earned a BA in history and political science from Victoria University, it takes 150 days on average to get a scientific paper published, with 120 of those days because of the peer review process.

Publons pair get scientific publishing moving faster – Business – NZ Herald News

“The way we publish and share research hasn’t really changed in the last 350 years.”

This slowness is caused by a lack of incentives for peer reviewers, he says.

“They don’t get recognition for their contribution, they don’t get paid and they don’t even get anything they can put on their CV, so this crucial part of science is seen more as a chore than anything else.”
Though Publons started off as a platform to discuss published research, this finding caused Johnston and Preston to switch Publons’ primary focus last year to incentivising peer reviewers before publication, bringing on board companies such as GitHub, Amazon Web Services and Makey Makey to sweeten the deal for participants with a rewards programme.
The concept is taking off, says Dave Moskovitz, a Wellington angel investor and one of the first investors to be attracted to Publons.
“The first 500 users took six months, we moved from 500 to 5000 in another eight months, while today Publons boasts nearly 35,000 researchers and 83,000 reviews.”
Moskovitz, a self-described failed PhD student, has watched Publons grow from its very early days three years ago, when Johnston and Preston attended one of his Lean Startup clinics in Wellington.

His own experience in academia showed the promise of the core idea and then when he saw the progress Johnston and Preston made during the 2013 Lightning Lab – where Moskovitz was helping as a mentor and evaluator – he decided to join the team. “I really like their approach to problem solving, to building a team and a market. This is going to democratise science to a degree.”

Johnston says the next big step for Publons is to set up a base in London where it can more easily establish partnerships with potential customers in scientific publishing and find industry investors.

The company’s capital raising, which stemmed from Lightning Lab, came from a number of sources, including the Government’s New Zealand Venture Investment Fund and several Wellington-based angels.

Johnston says it has helped build up the company’s team and rapidly increase its user base.

Publons pair get scientific publishing moving faster – Business – NZ Herald News

Produced in conjunction with the Angel Association of NZ.

As published in NZHerald 16 April 2015

 

Please follow and like us:

Lead Partners

NZTE NZVIF PWC

Expert Partner

AVID “FNZC.jpg”

AANZ Summit Sponsors

Callaghan Innovation “UniServices” Kiwinet “Spark”