Otago Daily Times

New fund aims to be the Share­sies of ven­ture cap­i­tal

- CHRIS KEALL

AUCK­LAND: A sec­ond in­dex fund from Ice­house Ven­tures, dubbed IV100 II, aims to democra­tise ac­cess to the ven­ture cap­i­tal game — just as Share­sies and Jasper have re­spec­tively opened up the share­mar­ket and com­mer­cial prop­erty to smaller in­vestors.

IV100 II back­ers can chip in as lit­tle as $50,000 — a mod­est sum in ven­ture cap­i­tal fund terms — that is drawn down over four years.

The fund is cou­pled with a new in­vestor por­tal, de­signed to make it eas­ier to track how firms in its port­fo­lio are track­ing.

Ice­house Ven­tures chief ex­ec­u­tive Rob­bie Paul said in­vestors could use those in­sights to choose which star­tups to in­vest in.

The sec­ond ma­jor char­ac­ter­is­tic of the $10 mil­lion IV100 II fund was that it would aim to elim­i­nate risk by spread­ing its in­vest­ment over 100 early stage com­pa­nies.

Ven­ture cap­i­tal funds al­ways in­vested in a rel­a­tively large num­ber of com­pa­nies, fig­ur­ing that while most failed — as was the na­ture of star­tups — a cou­ple of big hits would out­weigh the losses. IV100 II di­alled up this ap­proach by in­vest­ing in a ton.

Mr Paul said the new fund was in­spired, in part, by two pi­o­neers on the North Amer­i­can ven­ture cap­i­tal scene: Ham­ble­ton Lord, of Boston, who vis­ited NZ last year, and Ian So­bieski, director of Sil­i­con Val­ley­based Band of An­gels.

Mr Paul noted Mr So­bieski was be­hind a fund that in­vested in 112 com­pa­nies with a 40% in­ter­nal rate of re­turn over 12 years.

‘‘But if you took the top six com­pa­nies out they were av­er­age. And if you took the top nine out, they were un­der­wa­ter,’’ he said.

IV100 II was launched in Septem­ber and had so far raised $5 mil­lion in­vested in 10 star­tups, in­clud­ing Or­ganic Ini­tia­tive, Re­motely, Re­fund Club, and HeartLab.

Mr Paul ex­pected to have raised the full $10 mil­lion by Christmas.

It fol­lowed the ear­lier IV100 I, which raised funds in 2017 and backed its 100th com­pany, Rev­o­lu­tion Fi­bres, in March this year.

It specif­i­cally co­in­vested in well­funded star­tups backed by one of its other ac­tive funds, such as Tuhua Ven­tures or the newly launched Level Two Ven­tures deep tech fund.

Some of its in­vest­ments — such as the afore­men­tioned Share­sies — had been out­and­out hits. Oth­ers, such as Hal­ter, which is de­vel­op­ing smart col­lars for cows, were still pre­com­mer­cial works in progress.

Mr Paul said IV100 II would in­vest across an ‘‘un­prece­dented’’ va­ri­ety of founders, busi­ness mod­els, in­dus­tries, growth stages, and mis­sions, tak­ing in com­pa­nies led by a di­verse range of peo­ple.

Of its early in­vest­ments, Re­motely (gam­i­fy­ing meet­ings) and Re­fund Club (try­ing to ease the path for peo­ple get­ting re­funds by credit card, such as trav­ellers hit by Covid­19 re­stric­tions) are try­ing to carve out new ter­ri­tory.

Or­ganic Ini­tia­tive, or Oi, is run by vet­eran en­tre­pre­neur He­len Robin­son, and de­vel­op­ing cer­ti­fied or­ganic men­strual prod­ucts.

HeartLab, founded by 20­yearold Auck­land stu­dent Will He­witt, is creat­ing ar­ti­fi­cial in­tel­li­gence to as­sist sur­geons with car­diac pro­ce­dures.

Which could have the best shot at be­com­ing bil­lion­dol­lar suc­cess stories?

Mr Paul said the IV100 II ap­proach meant there was not so much fo­cus on pick­ing in­di­vid­ual win­ners — it was more about fol­low­ing an ap­proach that would give a good shot that there would be some uni­corns in its herd. — The New Zealand Her­ald

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