Puawaitanga & Kotahitanga Award Winners 2018

This year the Angel Association New Zealand’s Puawaitanga Award recognises the founder and investor-director who best exemplify what can be achieved when committed people draw on their collective skills and experience. This award celebrates an angel-backed venture achieving world-class success. This venture has excellent governance, a compelling business proposition and a well-defined strategy for exponential returns.

Puawaitanga – ‘best return on integrated goals’.

The Kotahitanga Award recognises those people in the angel community who have made an outstanding contribution to the industry. It acknowledges those who have selflessly given personal time and energy for a sustained period and contributed to the professionalism, profile and reputation of angel investment in New Zealand.

Kotahitanga – ‘unity and a shared sense of working together’.

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The Puawaitanga Award has been presented to Dexibit’s founder Angie Judge and investor-director, Dana McKenzie.

Dexibit analyzes visitor behavior and venue performance at the world’s visitor attraction institutions such as museums and galleries. Since Angie Judge founded Dexibit in 2015, the company has secured customers like the National Gallery in the UK and The Smithsonian in the USA and, here in New Zealand, the Auckland Art Gallery and Te Papa. Dexibit has won two prestigious High Tech Awards for Innovative Software and Best Technical Solution for the Creative Sector and been a finalist in a number of other categories. Dana McKenzie has Chaired the Board of Dexibit for the last three years and is a true champion for the company and its team, including Angie.

In making the award, Angel Association Chair, John O’Hara said Angie and Dana are great examples of what alignment and mutual support can achieve.

“No one scales value in a high-growth tech company on their own. To get traction both the founder and the investors need to be committed to the same end-point. This has clearly been the case with Dexibit. Dana and Angie have been working together to generate stunning progress in terms of revenue generation, customer acquisition and to secure capital to amplify that growth to support Dexibit to generate exponential returns for the investors and just as importantly, for the New Zealand economy,” he said.

The recipient of the Kotahitanga Award is Matu Managing Partner, Greg Sitters.

Greg has been involved with capital raising for early-stage deep-tech ventures in New Zealand for over a decade. He was an early employee at Sparkbox Ventures and then worked for its successor GD1, before setting up Matu. Matu was founded earlier this year to provide seed and early stage capital for disruptive scientific and IP rich startups. Greg has given countless hours of his time to literally hundreds of budding and early founders, including in his tenure as a long standing member of the Return on Science and Uniservices’ Investment Committees. Greg is a founding member of the Angel Association and served on the Council since its inception in 2008. In this role he has given freely of his time to dozens of professional development initiatives and to represent the early stage industry at events not only all over New Zealand but around the world.

“Greg exemplifies the generosity of spirit that imbues the New Zealand angel community. His depth of knowledge about what it takes to scale a deep tech venture is unsurpassed and has been invaluable to companies like HumbleBee, Lanaco, Objective Acuity and many more,” said John O’Hara.

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On track for another record year

First half year results show angels are investing at rates on a par with previous years. The upward trajectory continues. It’s likely the formal part of the market will hit $100m into high growth start-ups this year.

Reporting on the activity of its members tracked by the NZ Venture Investment Fund, Angel Association Chair John O’Hara said $30.8m dollars was invested in 46 deals in the first six months of the year compared to $20.2m into 29 deals in the same period last year.

More detail and deeper insights can be found at www.pwc.co.nz/startupmagazine in the second edition of Startup Investment New Zealand; a collaboration between Angel Assn and PwC.

Mr O’Hara noted there is always a substantial uplift in activity in the second half of the year, in part inspired by two of the country’s larger angel networks, Ice Angels and AngelHQ, holding their annual venture showcases in September.

“This year Ice Angels’ showcase attracted 1000 guests and that level of enthusiasm has been reflected in capital commitments to the ventures presenting. AngelHQ’s showcase attendance numbers were also up,” said Mr O’Hara.

“We are seeing increasing valuations and amounts raised, and in many cases, start-ups are now appearing to be fully valued. While this is positive it comes with some challenges,” said Mr O’Hara.

“Start-ups that are too well funded can lose their edge and correspondingly high valuations put pressure on founders to deliver the requisite valuation uplift to ensure the next funding round is successful,” he noted.

These sorts of issues were discussed at the Angel Association’s first ever event for founders and investor-directors held the day before the industry’s annual summit in Blenheim on Wednesday 31 October 2018. Called “The Runway”, the day-long event brought together over 35 founders of high growth ventures and the angels who have backed them. As well as building a cohort of like-minded founders who support each other as their ventures scale, the initiative began to build tighter alignment and awareness of what it takes to scale an angel backed company.

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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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International angel experts descend on Summit #AANZ18

The big event in the calendar for the Angel Association New Zealand is the annual Angel Summit.

This year our Summit focuses on the power of diversity and how it delivers better outcomes.

The world has changed significantly since we began over ten years ago. This year we acknowledge the changes and discuss how we can adapt, focusing on amping up the power of angel investment through diversity and inclusion to deliver higher value outcomes. We will be welcoming aligned VCs from NZ, Australia and Singapore to join the conversation and discuss questions like;

Why and how does a more feminine approach, both as founders and investors, add value?
What values do different ethnicities bring to angel backed ventures to increase the prospect of success?
Why is it important we include millennials in our ventures?

Joining our discussion will be;

Randy Komisar
Last year Randy Komisar, managing partner from Kleiner Perkins attended the summit with support from NZTE and Spark Ventures. Randy’s fireside chat at the end of the summit was one of the top rated presentations. As a direct result of his visit Randy was inspired to write “Straight Talk for Startups – 100 rules for beating the odds”. The book is currently ranked no.1 on Kindle’s Business Technology section. His return to NZ is intended to amplify the connections he made last year and he will play a lead role in The Runway event for founders and investor directors and spend a couple of days in Wellington.

Jeffrey Paine
Jeffrey Paine is a founding partner of Golden Gate Ventures based in Singapore. Since it’s inception in 2011 Golden Gate have invested in 30 companies across Asia. GoldenGate consider any ventures expanding into Asia and will invest between $US1-10m in early stage and series A rounds.

Wendee Wolfson
Wendee Wolfson co-founded one of the first angel networks in Washington DC, New Vantage Group with ACA Chair Emeritus, John May. She has chaired the US Angel Capital Association international exchange for the last seven years. Wendee is currently working with the Next Wave Impact Fund and has worked with the predecessor fund, Rising Tide, to educate and engage more women in early stage investment and will spend time in Auckland during her visit.

Marisa Warren
Marisa Warren is from Elevacao which has gained profile and traction in Australia, San Francisco and New York helping woman founders to scale and attract investment. Marisa has deep experience in corporate M&A and extensive networks.

Dr Sean Simpson
Dr Sean Simpson is one of the co-founders and current Chief Science Officer for Lanzatech which is ‘revolutionising the way the world thinks about carbon waste’. Sean has a tremendous depth of experience and belief in New Zealanders’ ability to change the world and will talk about lessons learned along the way as he led a team taking Lanzatech to the world. Dr. Simpson served as Leader of the Biofuels initiative at AgriGenesis BioSciences Ltd.

John Henderson
John is a Partner, Head of Venture and Business Development from Airtree Ventures based in Sydney. Airtree has made over 50 investments, including a number of NZ companies and had over a dozen exits.

We will also be privy to valuable input from a wealth of local early-stage investment experts including; the experience and insight of Marcel van den Assum, former Chair of the Angel Association and currently chairing a number of high growth ventures such as Wipster and Merlot Aero; the marketing chops of Vic Crone, CEO of Callaghan Innovation; the investment strategy of Richard Dellabarca, CEO of NZ Venture Investment Fund; and insights about fast track of growth from Janine Manning, Chair of Crimson Consulting, one of New Zealand’s most highly valued angel backed ventures.

This 11th annual Angel Summit will deliver a unique opportunity to learn how to invest to create a bright future for New Zealand, its talented entrepreneurs and drive returns so we can re-invest.

What will I come away from the summit with?
Friends and super relevant contacts, pithy, practical insights on how to be an angel with more impact, a great little goodie bag, and as is customary when you descend from a summit… arms full of inspiration!!

Check out the draft programme here.

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Into the dragon’s den with New Zealand’s million-dollar investments

Hundreds of New Zealand’s wealthiest investors gathered for the 2018 Flux Demo Day last week for a night of wining, dining, and million-dollar business investments. Jihee Junn went along to watch this year’s plucky startups pitch it out.

“The first rule of investing is: don’t leave the table when the food’s being served!” a jolly looking man at my table exclaimed. We were halfway through the night’s events when platters of braised beef, roast potatoes and Akaroa salmon were brought out to the room’s 400 or so investors. As we dug into our family-style meals, passing along giant plates of food from left to right, I asked some of my fellow diners – all older, wealthier, and a lot more male than me – for their thoughts on the startups that had pitched so far. On the whole, their responses were akin to a placid shrug.

“They were okay,” said one man, who told me his day job was working at a private investment firm. Those sitting next to him nodded in agreement. “I’m not really here to invest tonight, but if I was, there probably hasn’t been anything yet to make me want to get out my wallet.”

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Ten Companies selected for Zino New Kiwis Startup Challenge

Debra Hall, an experienced angel investor and Chairman of Zino Innovation Hub, which runs the Challenge, says the Zino team was delighted at the level of interest shown, with 42 companies, and entrepreneurs from 16 countries, entering the competition.

“As investors in start-up companies, we regularly see talent being wasted because new migrants simply don’t have the connections, the access to capital and sometimes even the language to navigate the early stage of growing a business. Zino is committed to changing this, to create new value for New Zealand” said Hall.

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Why you SHOULD be an angel investor… it’s all about portfolio management

Australian early stage angel investors often treat start-up investing like horse racing. They punt with money they’re willing to lose, but this approach has led to a lack of discipline and very poor returns.

They place a few bets based on a good jockey (founder), their form (prior success), the stable (team and advisers), horse (business), equipment (technology), running line (strategy) and weather conditions (market), but start-ups should not be treated as an adrenaline-shot gamble where the majority of investors lose their money and a few “lucky” punters make a killing.

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Garage to Global

PART 5. TAKING INVESTORS ALONG ON THE JOURNEY

Building a business is a journey, along which there will be all sorts of challenges, setbacks, break-throughs, victories and adventures. We, of course, all hope and plan for more good things to happen than bad things along the way – but regardless, it is always a journey and always an adventure.

Investors in your business are key stakeholders who not only deserve to be included in the journey for their financial support of your business but are also people who have a vested interest in helping you in the various ways they may be able to.

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Angel investment rises 26% to reach record level

Startups in New Zealand received an unprecedented level of funding last year, with $86 million flowing into early-stage businesses across the country. That’s according to Startup Investment NZ, published by PwC New Zealand, the Angel Association of New Zealand (AANZ) and the New Zealand Venture Investment Fund (NZVIF).

“It’s exciting to see such a large number of deals coming through to support early-stage companies. We’re seeing investment levels that are almost three times what we saw just five years ago” said Anand Reddy, Partner at PwC New Zealand.

John O’Hara, AANZ Chair, endorsed this sentiment noting that membership of angel networks continues to grow with a new network established in Marlborough last year and a budding network getting started in the Hawkes Bay.

Established networks like Ice Angels in Auckland, AngelHQ in Wellington and Enterprise Angels in Tauranga are also experiencing growing memberships.

Driving the growth in investment dollars is an increasing number of larger deals in 2017, compared to the year before. The number of deals in 2017 held steady at 111 – one lower than the 12 months previous – the total amount invested has risen by $18 million, a 26% increase.

Offering some insight on the larger number of dollars being invested in a similar number of deals, John O’Hara suggested it reflected a maturing ecosystem.

“A number of the ventures angels have backed are now looking for larger capital injections to fuel their growth. With a thin VC industry, it’s not surprising we are seeing larger deal sizes.

John also offered a word of caution to investors and founders.

“The market’s a little frothy right now. We’re seeing some strong valuations. Entrepreneurs have to be sure they’re not setting the bar too high with their forecast results. If they fail to meet these, it’ll make it make it harder for them to get the next round of funding.

“And investors will be similarly impacted. Flat and down rounds do not impact well on portfolio return prospects.”

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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The network effect: NZ angel networks drive funding

Of the $86 million invested into young companies in 2017, over half ($49 million) came from angel investment networks, rather than individual funds or institutional investment.

“The strength of our angel investment networks in New Zealand is growing every day, which helps to explain why they’re responsible for a growing share of overall funding” says AANZ Chair John O’Hara.

“They’re responsible for over double the funding that’s coming through the next most-popular channel of angel funds.”

Raising funds from angel networks can take a little longer than other sources of early stage funding (such as mico-VCs and high networth individuals) given that sometimes over a dozen individual investors are collaborating to complete DD and gather the investment. Angel networks also tend to be run with a large component of voluntary input so founders and lead investors need to be committed project managers.

John notes that not only do networks tend to bring a larger pool of connections and expertise than single source funding options, they bring deeper reserves of connections for follow on funding.

“Angels are inveterate travellers and networkers and have connections in markets across the world which can be tapped for sales channels, in-market insights as well as follow on funding recommendations,” said John.

“Nothing beats getting on a plane with a line-up of carefully targeted meetings. New Zealand founders and investor directors need to spend more time in-market and be preparing for the founder to be based there,” John added.

He concluded by noting that lining up an in-market Board member was also an important component of scaling into offshore markets.

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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Lead Partners

NZTE NZVIF PWC

Expert Partner

AVID “FNZC.jpg”

AANZ Summit Sponsors

Callaghan Innovation “UniServices” Kiwinet “Spark”