More Cross Border Investment #ACAAngelSummit15

Angels Connect NZ Series, Brent Ogilvie from Pacific Channel reports from the International Exchange Workshop at the ACA Conference 2015

I last attended an ACA conference two years ago. This year there was clearly not only far greater interest in doing cross-border deals, but angel investors making it happen.

Panelists at the ACA’s International Exchange workshop were up beat about the quality and quantity of opportunities globally. Those on the panel included Audrey Jacobs from Our Crowd the equity crowd funders based in Israel, and Jeff Lynn from another equity crowd funding platform, Seedrs, based in London.

All of the panelists discussed their activity and structures openly to encourage more interest and engagement from investors around the world, whether in groups, networks or funds. They agreed that as an industry angels need to focus more on the outputs of their investment – creating high value jobs and exits.

Audrey Jacob’s view is that the current VC model is ‘broken’. She estimated there are only 100 VCs in the world investing in more than 3 deals per annum. Most general partners now only receive their annual 2% fees from funded capital (not on committed capital).

OurCrowd invests its fund alongside its equity crowd funding members who are all accredited business angels. The crowd funding investors participate as ‘limited partners’. Audrey Jacobs explained OurCrowd negotiate the deal terms and participate as a ‘general partner’. OurCrowd put in a minimum of $50k per deal and will contribute up to 10% of the round.

To date OurCrowd have invested $US110m in 64 companies. They are agnostic about the company’s stage, sector or country of origin and are currently reviewing deals from Brazil and Spain. (Editors note: OurCrowd have invested in Varigate, a NZ company, commercialising an irrigation technology).

Audrey Jacobs’ insights set the theme for the session with multiple examples of early stage investors pooling capital, allowing smaller investors in the ecosystem to participate in deals and securing similar returns to larger lead investors.

Backing up this increased interest in cross border deals Jeff Lynn sited a recent survey where 22% of British angels said they would invest outside the UK. In a later session on US angel investor preferences, more than half said they had no geographic preference. This compares to just six years ago when two thirds said they would only invest in deals no more than a two hour drive away.

Another example of international capital pooling came from Swiss based angel group, Go Beyond, which syndicates with angel groups in 7 countries and has the ability to “transfer shares” among the groups.

Go Beyond has invested in US ventures and put money into deals sourced in France, Spain and Switzerland. The group hold monthly virtual meetings to discuss deal flow. The lead angel in each deal takes a “free carry” and is responsible for quarterly reporting to shareholders.

Blake Witkin, the Chairman of Ontario’s Network of Angel Organizations outlined the problem pooling capital solves. He had found some local angel groups were missing out on deals because their investment processes were too slow. Establishing a fund offers a neat solution as it provides a pool of capital with a mandate to invest quickly and secure an option for its angel participants to invest in follow-on rounds., formed by a San Francisco angel group, has 3,400 accredited investors who want more deal-flow. This group would also like to hear from angel groups internationally who have deals to syndicate.

The session bodes well for New Zealand’s focus on exporting knowledge and spreading kiwi innovation internationally.

Brent Ogilvie

For more highlights from attendees who attended the conference

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


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Firm aims to help cystic fibrosis sufferers

Breatheasy is a wonderful example of what motivates and inspires angels to invest in early stage ventures. Founder and CEO, Andrea Millar spoke compellingly about the difference her venture could make to cystic fibrosis suffers at last year’s Angel Summit.  A New Zealand drug company is seeking $500,000 to trial an experimental cystic fibrosis treatment it plans to have produced locally.

Auckland-based Breathe Easy aims to produce Citramel, a spray designed to dissolve biofilms on the mucus which accumulates in cystic fibrosis sufferers’ lungs.  It is launching a $500,000 share offer on online investment company Snowball Effect.

Chief executive and former Timaru resident Andrea Miller, said the company had already raised more than $1 million from “angel investors”, including at least one South Cantabrian and through investment companies New Zealand Venture Investment Fund and Pacific Channel. Breathe Easy director Brent Ogilvie is also a director of Pacific Channel.


Startup driving cystic fibrosis drug to market

Andrea Miller is used to facing tough situations. As a senior army officer for 22 years, she’s faced all sorts of challenges, including a UN peacekeeping tour to East Timor. Now, as the chief executive of Auckland-based startup company Breathe Easy, she’s fighting for the 75,000 people around the world who suffer from cystic fibrosis (CF), including her 26-year-old daughter, Sarah.

CF is a chronic genetic illness that affects the lungs and digestive system. It’s debilitating and destructive, says Miller. “It’s a tough foe. Sadly the prognosis is really grim.

“It’s improving now, but the average life expectancy is still only in the 30s.”

Sufferers have thick and sticky mucus in their lungs, which settles and clogs the small airways and causes recurrent lung infections.

Miller’s partners in Breathe Easy are Professor Bob Elliott, who Miller first met more than two decades ago when he was her daughter’s paediatrician, and Auckland-based life sciences investor and champion Brent Ogilvie.

Through years of self-education, attending overseas medical conferences and completing an internship with the Cystic Fibrosis Foundation in the US, she’s gotten to know Elliott and Ogilvie pretty well, she says.

Breathe Easy came about after Professor Elliott invented a new drug called Citramel, which melts the biofilms or mucus obstructing the effectiveness of existing antibiotics and the patient’s own immune system in dealing with CF.

With the backing of Ogilvie’s life science investment company Pacific Channel, Ogilvie and Elliott formed Breathe Easy to develop Elliott’s findings into a useable product and bring it to market with Miller’s help.

Since then Breathe Easy has gained regulatory and ethical approvals for the crucial Phase I/IIa clinical trial to test its efficacy and safety. The trial is due to start in early 2015 at the Christchurch Clinical Studies Trust.

It’s potentially a huge breakthrough for the medical world and an important milestone for New Zealand’s medical innovation as this will be the first CF product to enter clinical trials that was invented here and will be manufactured here. “At Pacific Channel we look for both a high potential social good as well as high potential financial returns and Breathe Easy embodies both, very much,” says Ogilvie.

Pacific Channel and its network of angel (early-stage) investors have already pumped in “a few hundred thousand dollars” to get to this stage, says Ogilvie, but Breathe Easy needs another $1.5 million to complete the clinical trial to test Citramel and move the product forward.

It’s a lot of money, but the task is a little less daunting because CF is classified as an “orphan” disease – a disease that affects only a relatively small percentage of the population – and as such can get fast-track approval with important international regulators such as the US Food and Drug Administration (FDA).

“Drug development is tough, and doing it from New Zealand is very tough. However, the beauty of working on an orphan drug, where the market for the number of patients is obviously much smaller than something like heart disease, for example, allows for faster and lower-cost drug development,” said Ogilvie.

Running the clinical trials in New Zealand is also a lower-cost alternative to conducting the trials in Europe or the US, plus it has the added benefit of spreading knowledge and awareness about CF and the treatment possibilities among New Zealand’s medical fraternity, says Miller.

Breathe Easy also believes that Citramel may benefit those with diseases such as chronic obstructive pulmonary disease, which affects around 330 million people, so the potential is enormous, she adds.

“It’s a sensational story! Rather than the awful situation of having to sit and wait for the illness to take its toll, here we are getting up, taking action, and developing a medication that could be really helpful in the fight against CF.”

Produced in conjunction with the Angel Association of New Zealand.

First published on Thursday Sep 25, 2014

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