Some benefits of New Zealand Inc’s approach to fostering investment in early-stage companies are illustrated by the timely release of NZVIF’s Portfolio Investment Snapshots Report. (full report – summary press release here).
Not only does it show how efficient the Government’s investment has been in leveraging $9 in private capital for every public dollar invested, but also its dataset of nearly 200 companies provides some real intelligence around the risk/reward dynamics of early-stage investment in New Zealand, beyond the usual “1 in 10 (or 20)” rules of thumb of angel investment.
There are probably few surprises in the main lessons from the report. Early-stage investment continues to be risky business and its rewards may often be more intangible than tangible. There are encouraging success stories but investors need to be prepared for tough times, illiquidity, and losses too. Importantly, investors need to consider a portfolio approach and be prepared for making sustained follow-on investments.