Heavenly manna from angel investors
The Canterbury Angels startup investment group is on the hunt for startup investments following a recent agreement with the New Zealand Venture Investment Fund.
The partnership means when Canterbury Angels invest in a new company, NZVIF will match it dollar-for-dollar, according to local Angels chairman Ben Reid.
The taxpayer-funded NZVIF was set up by the government in 2002 and has $280 million invested in various companies in funds.
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 NZIF would run for around four to five years, investing into 10 to 15 young companies over the first 18 months.
The first qualifying company is Notice Match, a business that compiles details of people who have died, and making them available to businesses to keep their databases up to date.
Canterbury Angels has about 40 members and invites 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 – Kiwi investors were too focused on more immediate dividends.
Examples of startup investments include the Powerhouse group, seed funded 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 like 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 group 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.
Forty six per cent of the companies 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 2002 the government 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 identified 36 per cent of small businesses in Canterbury are most concerned about cash flow, and 42 per cent say administration takes the most time. Securing new business is the main concern for most sme’s.
All small businesses should be moving bookkeeping and accounting to cloud systems, Hudson said.