Idealog’s Guide to Tauranga: Follow the money

Businesses in Tauranga looking to scale up should count themselves lucky: the Bay of Plenty is one of the only regional centres in New Zealand with funding available for nearly every stage of business growth. There are three organisations on hand ready to help: early-stage investment provider Enterprise Angels, tech investor and incubator WNT Ventures and later-stage private equity provider Oriens Capital.

For companies in the early stages of investment, WNT Ventures is technology incubator that’s been put together to nurture innovative ideas nationwide. It’s currently on a five-year pilot trial receiving government support through Callaghan Innovation.

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UK fund’s A$200M investment commitment validates Powerhouse  

London Stock Exchange-listed IP Group’s decision to invest A$200 million over 10 years in commercialising scientific innovations from universities Down Under validates the business model of ASX-listed tech incubator Powerhouse Ventures, says its new chairman Russell Yardley.

Powerhouse has a portfolio of 19 companies developing intellectual property spun out of New Zealand research institutions with a combined enterprise value of about $112 million, including CropLogic, an agricultural technology company that published a prospectus this month to raise A$8 million and list on the ASX.

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NZ early stage investors have eye on global prize

Entrepreneurs are being encouraged to chase global markets if they want to win backing for their early stage ventures, with investors having their eye firmly set on international markets with little regard for domestic sales.

Massey University Master of Management student Hattaf Ansari worked with the university’s start-up incubator – the ecentre – to investigate the criteria of investors in early stage ventures in New Zealand and compared that with similar US data.

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Tech incubator Powerhouse Ventures makes two new investments

ASX-listed Powerhouse Ventures has committed to invest up to $450,000 in a new ed-tech software company spun out of Victoria University’s Faculty of Education in Wellington in conjunction with Macleans College Auckland, as its share price languishes 30 Australian cents below its market debut last month.

The deal comes as it’s also about to announce its first ever investment into a spin-out from the University of Auckland – Objective Acuity, that has developed a revolutionary eye technology.

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WNT Ventures

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WNT Ventures is a technology focused incubator with a committed pool of capital in a fund structure, for investing into pre-seed, seed and start-up stage companies.  Based in Tauranga, New Zealand, we actively seek IP-rich technologies throughout the country from publically funded institutes and the private sector.  WNT is often actively involved in company formation and assisting companies in becoming investment ready including developing company strategy, initial IP protection and sourcing of management teams and Boards.

Together with our Limited Partners, we offer significant hands-on experience for investing into a range of technologies including but not limited to the Primary Sector – Agriculture, Horticulture and Food technologies, ICT, Engineering and Materials, Medical Technologies along with Robotics and High-Value Manufacturing.

Our collaborative approach we have with our investment partners means WNT Ventures has the ability to address complex IP opportunities from different perspectives.  We leverage our commercial backgrounds, risk-capital, domestic and international networks and our links within the NZ government via Callaghan Innovation, to provide early stage, high risk capital investment and incubation of technology, accelerating their growth in a targeted manner.

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Lightning Lab accelerator programme increasing investment in 2016

An enthusiastic review of one of New Zealand’s most successful “angel food generators”

An accelerator programme which has helped startups raise millions of dollars in investment is sweetening its offer in 2016 to attract more entrepreneurs.

Founded by Wellington incubator Creative HQ, Lightning Lab is a business incubator which mentors digital startups over three months.

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Angel connections help ideas grow wings

This great story illustrates “the eco-system in action” with Enterprise Angels and WNT Ventures working together to create the angel food of the future…

The boss of Bay of Plenty startup funding group Enterprise Angels says it is working closely with WNTVentures.

“We’re able to refer opportunities that are at too early a stage for Enterprise Angels to WNTVentures, and we’re able in all kinds of ways to be able to give more certainty to that next round of funding at the angel stage,” executive director Bill Murphy said.

Enterprise Angels is a shareholder in the incubator through its sidecar fund EA1, and sits on its investment committee. That involvement could include providing expert guidance and appropriately qualified directors for the incubated company.

Mr Murphy said the Scion nanofibre research was at too early a stage for angel investors because the commercial possibilities were still being worked out.

“We’re really pleased to see Scion is able to take some of its really cool research into WNT and give us the opportunity to invest in it at a later stage.”
WNTVentures chief executive Carl Jones said the incubator to date had three companies that had received the full $600,000 available from a combination of Callaghan Innovation repayable grants and the incubator’s 1:3 matching funding.

Bay of Plenty-based Onesixone has developed a software-hardware solution, which bridges the gap between industry standard DJ software and entertainment lighting systems.

IPO, based in Dunedin, is developing a point-of-care bovine mastitis diagnostic test, which will guide antibiotic treatment decisions. The technology only requires minimal laboratory requirements through vet practice or on farm, a simple sampling procedure.

Mr Jones said he was not yet able to provide details of the third company, which was in the software sector, for reasons of business confidentiality. There was also an agri-tech company at the same pre-incubation stage as Scion’s nanofibre project.

First published on nzherald.co.nz 12 August 2015

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#ABAF15NZ Speakers – Carolynn and Jon Levy

Meet the speakers #ABAF15NZ – Carolynn and Jon Levy

Hosted by the Angel Association of New Zealand, the 2015 Asian Business Angel Forum brings together leading investors and early stage business specialists from around the globe to share their knowledge make their New Zealand connection.

They join a carefully curated audience of investor members of Angel groups, network and fund members from across this dynamic country bought together by the AANZ to celebrate this small country’s big contribution to early stage investment and build international relationships.

Among the highly experienced line up of speakers AANZ is extremely pleased to be able to bring Carolynn and Jon Levy from Y Combinator, one of the most successful incubators in the US to ABAF to share their insights and experience at #ABAFNZ15.

Register-now

Carolynn Levy is a partner at Y Combinator (YC). She was previously at renowned West Coast US firm Wilson Sonsini Goodrich and Rosati, where she helped hundreds of startups with legal questions and acted as Y Combinators counsel for 6 years. She has a BA in political science from UCLA and JD from the USF School of Law, and is a member of the State Bar of California.

Jon Levy, is also a partner at Y Combinator and previously counselled public and private technology companies as an attorney for Wilson Sonsini Goodrich and Rosati. He ran ThinkEquity’s private placement department and worked as a Managing Director at Merriman Curhan & Ford. Jon earned a J.D. from the University of Michigan Law School, and a B.A. in English Literature and Religious Studies from Wesleyan University.

Both Carolynn and Jon are skilled and experienced in dealing with entrepreneurs at all stages of the lifecycle, offering services to those beginning their ventures, those exiting and experiencing the process of merger or acquisition and those that recycle their capital investing in the new. They make themselves available for office hours at YC and Carolynn is active in entrepreneur education via Stanford University providing insights to founders Finance and Legal Mechanics for Startups helping them to get the structure right at the start.

Joining YC was a natural move for the couple, Carolynn says “YC was becoming bi-coastal and needed legal help on the west coast.  So for years, as an associate at WSGR, I helped YC’s portfolio companies with formations, fund raising, etc.  YC kept getting bigger, and my husband Jon joined YC as a legal consultant.  Jon was (is) so happy working with YC because of the people and the culture.  So eventually, since YC kept getting bigger, I decided to leave WSGR and come to YC as a full time partner.  It was a great decision.”

She councils startups with pragmatic guidance, for instance “It doesn’t matter who thought of the idea, who did the coding, who built the prototype, or which one has an MBA. It will feel better to the whole team if the allocation is equal because the whole team is necessary for execution. The take away on this point: in the top YC companies, which we call those with the highest valuations, there are zero instances where the founders have a significantly disproportionate equity split.

Y Combinator itself has an impressive track record, so in their time as independent and in-house council Carolyn and Jon have been involved in some of the biggest deals and best known companies in technology today, including: Airbnb (valued at approx $10B), Dropbox (valued at approx $10B), Stripe (over $1B and growing), Twitch, Heroku and Reddit. Twitch (formerly known as Justin TV) was acquired by Amazon for $970M, Heroku was acquired by Salesforce for $212M.

As detailed by investors following YC’s progress tens of other YC companies have been acquired, those “based on reports had a price greater than $10M were Parse (Facebook, $85M), SocialCam(Autodesk, $60M), Xobni (Yahoo, $48M), Cloudkick (Rackspace, ~$50M),Loopt (GreenDot, $43M), Wufoo (SurveyMonkey, $35M), Omnisio(Google, ~$15M), 280 North (Motorola Mobility, $20M), and Appjet(Google). Parakey‘s acquisition by Facebook likely involved Facebook stock which is now worth a greater amount also. Others that were smaller but non trivial and were likely deemed successes by the founders were Auctomaticand Zenter.

Meet Carolynn and Jon Levy, along with a host of angels from New Zealand’s angel investment community and the world at the Asian Business Angels Forum, Queenstown, October 14-15. Seats are now very limited. Be quick to register yours. ABAF2015, NZ

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Jones to head tech incubator

Former Seed Co-Investment Fund team member, Carl Jones is profiled in this story as he takes up the CEO role at WNT Tech Incubator in Tauranga putting the Enterprise Angels in the front seat to receive some high quality ‘angel food’ in the near future.

Carl Jones, a former Tauranga local with a strong track record in government-led venture capital investment, has relocated back from Auckland to take on the role of chief executive with new local technology business incubator WNT Ventures.

Mr Jones, who began his career with Craigs Investment Partners, was previously investment manager for the Government’s New Zealand Venture Investment Fund (NZVIF). He also played a leading role in NZVIF’s Seed Co-investment Fund (SCIF), which provides matched investment alongside selected partners, including Tauranga early-stage investment group Enterprise Angels.

“Our partners are extremely important,” said Mr Jones, who took up his new role late last year. He noted WNT Ventures was a collaboration bringing together virtually all of the key early stage and technology investment entities in the region.

“The WNT Ventures structure is unusual, but the real selling point for me is to be able to walk into a Crown research institute or university and say, I have this really deep and wide network of not only people and capability, but experience and capital.
That’s really attractive to them.”

WNT Ventures was one of only three new technology incubators announced by the Government last year. It will access a repayable grant programme from Callaghan Innovation for start-up businesses based on locally developed intellectual property and novel technologies.

“There is a gap in the market I call where angels fear to tread, between post-research and where the angel investors get involved.”

While angel investors may like the look of a new technology, they usually required a degree of incubation to prepare it for commercialisation, he said. “We can leverage our internal funding and our Callaghan funding and take on the risk to help the people with the technology to get to the next stage where angels want to invest.”

He added WNT Venture’s ability to help new companies was greatly enhanced by the experience of its partners, as well as Enterprise Angels’ 150-plus members, who have invested almost $12 million in 37 early-stage deals to date.

The incubator had a goal of investing in four early stage technologies a year.

First published on nzherald.co.nz 12 February 2015

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$2.2m Investment from Angels for Lightning Lab startups

Five of the nine start-ups to go through Lightning Lab’s digital accelerator programme have raised a combined $2.2 million of seed funding, more than what they were seeking at a demonstration day in May.

The five successful groups, Common Ledger, Cloud Cannon, GlassJar, CoachSeek and Twingl, were seeking $1.94 million to support the commercial ambitions for their respective software-based ideas, of which $740,000 had already been committed before their May 28 presentations. Lightning Lab’s programme seeks to prepare early stage companies to pitch to investors.
“I was delighted to see that all the teams who pitched on Demo Day 2014 matched the best of what last year had to offer,” angel investor Trevor Dickinson said in a statement. “It was therefore no surprise that the 2014 graduates have attracted serious interest from experienced angel and venture capital investors.”

Last month the government-backed New Zealand Venture Investment Fund said it was too early to judge the success of its Seed Co-Investment Fund, which backs early-stage firms alongside angel investors and was set up in 2006.

In the opening address for the Lightning Lab event in May, Angel Association chairman Marcel van den Assum, who was also part of the successful sale of local software firm GreenButton, urged angel investors to broaden their portfolios if they wanted to improve their chances of a return, with too many backers relying overly on a small number of ventures.

First published on nbr.co.nz 12 August 2014

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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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Company incubator network expands

Tags: Incubator

New Zealand’s nationwide network of business incubators is being expanded, with the introduction of a new type of technology-focused incubator designed to get more high-growth start-ups off the ground, Science and Innovation Minister Steven Joyce announced today.

The list of incubators approved by the Callaghan Innovation Board includes three of the new technology-focused incubators and five founder-focused incubators, previously known as Business Incubators. The technology-focused incubators will have access to the pilot repayable grant programme announced in Budget 2013.

“The response from the market has been really positive, with a considerable number of high quality applications from across New Zealand,” Mr Joyce says.

“It has been encouraging to see a number of new applicants entering the incubation space and the keen interest in the new technology incubators.”

After a rigorous assessment process and a final recommendation from an independent panel, the Callaghan Innovation Board approved the following applicants:

Technology-focused incubators:

  • PowerHouse (Auckland, Wellington, Christchurch, Dunedin)
  • Astrolab (Auckland)
  • WNT Ventures (Tauranga)

Founder-focused incubators:

  • The Icehouse Ltd (Auckland)
  • The Bio Commerce Centre (Palmerston North)
  • Creative HQ Ltd (Wellington)
  • eCentre Ltd (Auckland)
  • Soda Inc Ltd (Hamilton)

Callaghan Innovation and the successful applicants are now in contract negotiations.

Mr Joyce says there was a high rate of collaboration between parties on proposals, especially within regions.

“Collaboration bodes well for developing and growing new companies in our high tech sector, which is crucial to growing our economy. If we can work smarter across industries and improve our access to innovation we will have a competitive edge in this dynamic and challenging sector,” Mr Joyce says.

The Incubator Support Programme from Callaghan Innovation offers support and funding to two types of business incubator companies, the existing founder focused incubator model and the new technology focused incubators.

Technology-focused incubators are privately owned businesses that will focus on commercialising complex intellectual property primarily sourced from publicly funded research organisations, such as universities and Crown Research Institutes.

Technology-focused incubators will be able to access a new repayable grants tool on behalf of the start-up companies they incubate. These grants will be administered by Callaghan Innovation. The Government will contribute up to $450,000 over two years to eligible companies resident in technology-focused incubators, matched 1:3 with incubator owners contributing up to $150,000. The Government grants will be repayable out of the company’s revenue. This pilot repayable grants programme has been allocated $31.3m over four years.

First published on beehive.govt.nz on Friday July 9 2014

 

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Incubator merges with tech investment firm

Dunedin’s Upstart business incubator has announced its merger with early stage technology investment firm powerHouse Ventures.

The merger will provide seed funding and support for businesses within the research-based technology sector.

It follows a partnership between Upstart and the Christchurch-based powerHouse Ventures, which was announced in November last year.

Upstart, which is jointly owned by the Dunedin City Council, University of Otago and Otago Polytechnic, has been helping high-growth companies get started since 2004, by providing incubation and angel investment services.

It has a network of investors across the country and now has operations in Dunedin, Christchurch, Wellington and Auckland.

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