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.

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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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Startups are finally revealed for the 2016 Auckland Lightning Lab Programme

Today, New Zealand’s premier digital accelerator has announced the ten digital startups that will embark on the 2016 Lightning Lab Programme in Auckland.

Reyedr, Wireless Guard, Foodcourt Online, Sonnar Interactive, WayWiser, Pheonix Audio, SeekStock, Dexibit, Slick Software, and Rock.ai all made it through the extensive application process to be the ten teams to receive $20,000 seed funding, intense mentorship, and the opportunity to work on the business 24/7 through the four month long Lightning Lab programme.

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Research Delivers Investment Lessons for Achieving International ROI

In May 2014, New Zealand tech success story GreenButton was acquired by US software giant Microsoft adding the company to a small but growing list of successful Angel funded kiwi technology exits. 

Dan Khan a tech entrepreneur, investor and former director of Lightning Lab, New Zealand’s first tech company accelerator, has conducted in-depth research on behalf of AANZ and NZVIF into the journey of the company from startup to exit. The resulting papers provide valuable insights for kiwis driving towards doing international deals, the subject of this years Asian Business Angels Forum (#ABAFNZ15) in Queenstown, October 14-16 2015.

ABAF2015, NZ

GreenButton’s success was not born overnight. The reality is one of relentless determination by the founder; big, bold decisions, backed by serious hard work; emotional challenges resulting from financial strains and extensive periods of being away from friends and family; an unrelenting focus on the end goal and a substantial commitment of expertise, time and effort by lead investors.

Angels invested in, or working on investing in Kiwi tech companies can learn how to achieve the highs and bear the lows of tech success on the world stage from the detailed research paper which steps through the “Anatomy of a Successful Exit: The GreenButton story”. Download it here.

Dan has also written a short form overview of his findings in a personal “Reflections on a Successful Exit: A Post-Post-Mortem of the GreenButton Story”, to entrepreneurs as he tours the country. His travel is being supported by the Angel Association of New Zealand and The New Zealand Venture Investment Fund. To receive a copy of the overview paper click here.

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Icehouse Lightning Lab start-ups pitch to 300 investors

More wonderful ‘angel food’ being delivered by Lightning Lab. Congratulations to all those involved and best of luck to the companies for successful first rounds.

More than 300 investors are being offered the opportunity to invest in their choice of nine Auckland technology start-ups.

Auckland’s first Lightning Lab programme comes to a head at Spark’s headquarters on Thursday night as start-ups in a Dragon’s Den-style pitch their businesses to investors in the hope attracting funding.

The start-ups in the programme are Wearit, BrokerBetter.com, Justly, Roll, Designer Wardrobe, Logicore, Preno, Future Insight and Estimeet.

All up they were looking to raise a combined total of about $2 million, MacLeod- Smith said.

Lightning Lab gives selected start-ups $18,000 equity in exchange for an 8 per cent stake in the business.

The Lightening Lab is a digital accelerator programme run in partnership with incubation hub The Icehouse.

Founded by Wellington incubator Creative HQ, Lightning Lab mentors digital start-ups over 12 weeks, providing them with the skills and support to launch their businesses.

Auckland Lightning Lab programme organiser Mark MacLeod- Smith said each start-up was given eight minutes to stand up and sell their company, during which time investors were not able to ask questions.

After all the pitches had been presented the start-up owners networked with investors who then carry out due diligence over several weeks before deciding to invest in any of the companies, MacLeod- Smith said.

Read more on www.stuff.co.nz

 

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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

 

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Bullish claims excite angel investors

This story profiles the role experienced angel investor, Susan Iorns has had in the journey and growth of one of the first Lightning Lab graduates, Expander.

Making a compelling pitch to investors isn’t easy, but Ollie Langridge’s bold claims attracted considerable interest from investors before he even had a product, let alone started marketing it.

The former TV commercial director first addressed potential investors a couple of years ago at Wellington’s startup accelerator Lightning Lab’s demo day. He told them he and business partner Paula Nightingale had an idea that could potentially prevent infant deaths, like those caused by the Chinese melamine scandal.

This bold claim related to the technology they would eventually develop, based on QR codes (abbreviated from Quick Response Code, a two dimensional matrix-like barcode) which could mark products with unique codes like a fingerprint.

Consumers can easily scan this code with their smartphones to check a product is authentic and safe – an option that is in increasing demand given the increase in food safety incidents and resulting tragedies such as the infant deaths in China caused by contaminated milk powder.

Langridge’s claims were enough to whet the appetite of a number of early stage angel investors present at the demo day, including Wellington-based Susan Iorns, who together with other members of Wellington’s angel group, Angel HQ, and the NZ Venture Investment Fund, invested $500,000 to develop Langridge’s Green Codes cloud-based technology under the company name Expander.

Iorns was so impressed she even became chair of the fledgling company. “I look for a couple of things when I’m considering investing in a company – whether the company is likely to create high-skilled jobs in New Zealand and whether it is likely to succeed abroad,” Iorns said.

“Expander’s technology was both scalable and I didn’t see any geographic boundaries. Ollie’s pitch was also a great and worthy call to action.”

A subsequent, oversubscribed capital-raising round last year secured even more funding to help accelerate Expander’s market overseas, says chief executive Erwin Versleijen, who joined the company early last year.

Versleijen formerly worked in mergers and acquisitions with PwC and commercialised products for Minolta, Samsung and BMC Software. He says he saw Expander’s potential from his first introduction.

“It’s a startup in the right space, so it’s likely to be a leader in its field,” Versleijen said.

The anti-counterfeit and brand protection market is expected to grow from US$3.4 billion today and the traceability technology market is expected to be US$14 billion by 2020.

Consumers are demanding more and more information about the origin of products before they buy, he says. “With ever increasing competition for market share, traditional media and sales techniques simply aren’t enough anymore.”

You don’t often see New Zealand shoppers using their smartphones to scan products but it is common in Southeast Asia, with most smartphones owners in China using QR code readers daily, Versleijen says.

When consumers scan Expander’s QR codes on a food or beverage product they are directed to a mobile landing page where they see where the product came from and who made it, nutritional facts and allergy information, and how to get in touch.

Consumers can also register to receive more information like recipes and accept invitations to social media.

For companies, this technology allows them to increase loyalty and brand equity, and get valuable data on where and how consumers are buying their products, Versleijen says.

Expander’s QR technology differs from the competition because its QR codes are randomly generated and not reliant on a legacy system, he says.

“Consumers can scan the codes from any reader on their smartphone. There is no dedicated application to download or training required.”

This year Expander is targeting the global dairy industry.

Exporters of infant milk formula and fresh milk to China need to have unique identifiers, such as a QR code for traceability on each package and a recall process to meet regulatory requirements.

Expander has cracked the QR code, now it’s ready to crack the international market, Versleijen says.

First published in NZHerald 12 March 2015

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Auckland accelerator startups win seed funding

More great ‘angel-food’ in the hopper. Congratulations to all the Lightning Lab companies selected in this next cohort of inspirational startups who will be seeking investment in three months time.  A web business that helps guys get advice from girls on what clothes to buy is among nine Auckland startups that have won seed funding and free advice.

Wear it Her Way and the other winners were selected from 200 entrants to receive assistance from “digital accelerator” Lightning Lab.  The companies get $18,000 in seed funding and will join a three-month course that provides “intense mentoring”, culminating in the opportunity to pitch their business to 200 angel investors.

Read more from Stuff.co.nz

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Web design aid catapults students from Dunedin to Silicon Valley

George Phillips and Mike Neumegen were a couple of Dunedin uni students when their part-time work as freelance web designers led them to hit on a business idea.

Less than two years later that idea has taken them to Silicon Valley, garnered them customers in Europe and the US and been backed by big-name Kiwi investors like Trade Me founder Sam Morgan.

It’s been a wild ride for the pair behind Cloud Cannon, a software company whose solution is aimed at making life simpler for web designers by automating some of their backend work.

“I still have moments where I’ll sit back and listen to one of my team talking about why we should be doing something, and how it fits with the company’s philosophies, and I’m like, ‘Holy crap, this isn’t two guys just making something in their bedroom anymore’,” Neumegen says.

Phillips and Neumegen were computer science students at Otago University and freelancing for local companies in their spare time when they first hit the pain point their company Cloud Cannon aims to soothe.
As designers their brief was to come up with a web design for clients, get sign-off on it, then create the site itself. At that point clients were thinking the job was done, but in reality the designers then had to spend hours on back-end coding and other work that would then allow the client to edit the site themselves.

The pair began spending their evenings working on a solution. Their initial project looked at solving the core issue, but also aimed to address a whole host of web designers’ needs. But the solution ended up being bloated and unusable, says Neumegen.

They scrapped all their code and started over.

The pair launched a pared-back and far more defined solution. After a handful of people started using it, they got a lucky break, featuring in tech industry blog TechCrunch.

“Startup entrepreneurs would chew their own arm off to get on TechCrunch and we just randomly happened to get covered by it,” Neumegen says. “Out of that we got a lot of traction, and a few months later we put in a business model, started charging and found people were willing to pay for it.” Early last year, Cloud Cannon was among the companies accepted into the Lightning Lab digital accelerator in Wellington. While there the pair met John Holt, managing director of the Kiwi Landing Pad – the government-funded base for Kiwi tech companies in the US. Holt sensed their potential and organised funding through New Zealand Trade and Enterprise to put Neumegen on a plane to Silicon Valley to fast-track networking.

Neumegen returned to New Zealand in time to prepare for Demo Day – the penultimate event in each Lightning Lab intake where companies pitch for investment. Cloud Cannon ended up gaining $650,000 from 16 investors including Sam Morgan, Datacom deputy chairman Simon Holdsworth and early stage investment company Movac’s managing partner Phil McCaw.

Among the investors was Laura Reitel, the former manager of the more well-known TechStars digital accelerator in Boulder Colorado, who later mentored Neumegen and Phillips at Lightning Lab.

“The funny thing is I’ve never made an investment before,” Reitel says. “But I found myself thinking, ‘If I’m ever going to bet on any team it’s a team like theirs’. I’ve seen a lot of investment activity and I’ve seen a lot of teams, and you always bet on people who you know you can work with and who really pour their heart and soul and energy into a venture.” Reitel says the ever-increasing number of websites being created annually means Cloud Cannon is in a fast-growing market.

“And there’s real demand for tools that help make websites more beautiful and easy and intuitive to use.” The investment has allowed the company to grow to a team of four and for Neumegen to spend six months in the company’s primary markets of Europe and the US.

Growing the number of freelance web designers using its software has been the main focus of the company in recent months. Connecting with those prospects has been made easier because web designers tend to be well-connected and vocal in online communities, Neumegen says.

Another opportunity the company is now pursuing is the enterprise market, and they’re currently talking to some large organisations about how they might use Cloud Cannon’s solution.

“Enterprises have a lot of websites they’re managing and they need non-technical teams to be able to update those websites. That’s not something we had really thought of, but once we started looking at it we realised we could solve some big problems for some very big companies,” Neumegen says. “And that’s a great feeling.”

First published on nzherald.co.nz 22 January 2015

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Kiwi trailblazers plot success with mapping tool

Online research can be a messy process. Anyone who’s ever searched for something online, only to find themselves hours later, hazy and buried under dozens of open browser tabs, will have some idea of the impetus behind Wellington software startup Twingl.

Trailblazer, Twingl’s first product, is a web browser add-on that automatically tracks and visualises the various paths people take as they follow their nose through any form of online research.

The obvious application for such a product is the education market, which is exactly where Twingl and the company’s backers are taking the product first.

Andy Wilkinson, Twingl’s founding chief executive, was in the late stages of a multi-school pilot programme and on the verge of launching a nationwide school holiday Minecraft competition when he took time out to explain how Trailblazer takes the donkey work out of documenting the research process.

“Trailblazer makes your learning visible. Say you’re researching something new – it might be a paper at uni or an overseas holiday – and you end up with dozens of open browser tabs, bookmarks and a Word document full of notes, well we’ve built a browser extension that turns all those tabs into a map which shows you why that tab is open and where to go next. It also automatically organises the notes you take. And in schools, your teacher will be able to see your map as well, so they can become better at teaching you how to research more effectively online.”

Wilkinson’s belief that humans are spatial thinkers kicked off the idea for Trailblazer.

“The internet doesn’t give you a very good sense of space, it’s almost edgeless in a way and anything we can do to help shape and adapt that content to the way our brains actually work is a good thing.”

Twingl itself is a product of New Zealand’s flourishing startup ecosystem, beginning with Wellington Startup Weekend in 2013 and progressing to theLightning Lab business accelerator programme this year, where Wilkinson and his fellow co-founders, Greg Signal and Matt Kennedy, raised $100,000 in seed funding to develop Trailblazer.

First published on nzherald.co.nz on 18th September 2014

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Startup Standouts – Cloud Cannon & Common Ledger

As an investor there’s nothing to stop you from keeping an eye on some of the bright young things coming through. Of nine startups that pitched at Wellington’s Lightening Lab Demo Day, two really stood out reports Yahoo NZ’s business desk.

Common Ledger. The startup has developed a platform letting accountants integrate different accounting software. That might make your eyes glass-over, but if you’re a small business owner, it means you can run your old MYOB accounts in your accountant’s flash new Xero system, without having to copy and paste.

They were looking to raise $550,000 and had attracted half of that in commitments before pitching, which would go to completing a major deal with one of the big four accounting firms, and help pay for their sales and distribution.

Cloud Cannon. These two youngsters have a startup which has developed a platform to make it easier for freelance web developers to create and host websites.

If you don’t hang around any web or design geeks, you probably won’t know the frustration they typically go through to send and upload their final design for a customer. Essentially it’s eight hours of pain-staking graft at the end of what’s already been an arduous process.

Cloud Cannon’s idea was to use Dropbox to cut that time to seconds, in what becomes a drag and drop process.

It’s a simple idea, but also one that would win over the scores of freelance web designers out there if they can get their product down-pat.

Read more from Yahoo NZ Business & Finance News

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Lead Partners

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Expert Partner

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AANZ Summit Sponsors

Callaghan Innovation “UniServices” Kiwinet “Spark”