Get in quick, startups told as angels spread wings
The Canterbury Angels startup investment group are on the hunt for startup investments following a recent agreement with the New Zealand Venture Investment Fund.
The partnership means that when Canterbury Angels invest in a new company, the NZVIF will match it dollar-fordollar, says local Angels chairman Ben Reid.
The NZVIF, set up by the Government in 2002, has $280 million invested in various companies.
Canterbury Angels is one of several private investor groups around the country, overseen by the Angel Association of New Zealand.
Reid said the partnership with the NZVIF would run for around four to five years, investing into 10-15 young companies over the first 18 months.
The first qualifying company is Notice Match, a business which compiles details of the deceased so businesses can update their databases.
Canterbury Angels have about 40 members and invite investee companies to make presentations – the sooner the better because of the time lag in achieving investment, Reid said.
Angels are professional or habitual investors as defined under securities legislation and will invest between $10,000 and $100,000 in a deal, which may be syndicated with other Angel investment clubs.
Reid echoed the sentiments of many in the startup sector when he said Kiwi investors were too focused on immediate dividends.
Local companies faced big hurdles to commercialise products and sometimes the best option was overseas.
Examples of startup investments include the Powerhouse group, seedfunded from a Christchurch City Council endowment fund and 22 per cent owned by the council’s Canterbury Development Corporation.
Powerhouse subsidiaries HydroWorks and CropLogic are currently seeking funds to list on the Australian Stock Exchange which they believe will be closer to markets and funding sources. Startups also often receive money from other government funders such as Callaghan Innovation.
Many startups commercialised research from Canterbury and Lincoln universities, and Reid said the angels also worked with other governmental and business-subsidised startup supporters including EPIC, Lightning Lab, Greenhouse, Vodafone Xone, and Ministry of Awesome.
These groups are facilitators with drop-in centres to facilitate networking.
The Canterbury Angel investor group included directors Shane Wakelin, Joan McSweeney, Ria Chapman, Mark Cathro, Raphael Nolden, Ian Douthwaite, and SLI Systems co-founder Geoff Brash.
Meanwhile, NZVIF allocates $2.8m a year for Crown seed investment, and provides reports about the companies and the amounts they have received.
Of these businesses, 46 per cent were software companies, 14 per cent biotechnology, 7 per cent technology hardware, 5 per cent healthcare equipment and service, and 5 per cent produce capital goods.
Since it was created, NZVIF has invested in more than 211 companies through partnerships with venture capital funds and angel networks, and those companies have raised a further $1.9 billion from private investors.
Craig Hudson, the country manager of accounting software firm Xero, said research revealed that cashflow was the top concern for 36 per cent of small businesses in Canterbury, and 42 per cent say administration takes the most time. For most SMEs, securing new business is the main concern.
All small businesses should be moving bookkeeping and accounting to cloud systems, Hudson said.