The 3rd Angel Investor Summit was held in Nelson two weeks ago. The key themes for this years summit – apart from sampling the outstanding local cuisine – were:

• Building global businesses from NZ; and
• Exit – getting out of the business of being stuckholders

We had an excellent range of domestic and international speakers with representatives from China, India, Australia and the United States. The local crew in the form of Rod Drury (Xero) and Derek Handley (Hyperfactory) provided excellent insights into their globalisation and exit experiences; and Scott Gilmour (I have a dream) and Sam Morgan provided the evenings inspiration by sharing their experiences with philanthropy.

For me, the key takeaways from the conference were:

• The upbeat feeling and camaraderie developing between Angel investors not just up and down the county but also with our international colleagues. There is a huge opportunity to build on this and leverage these deepening networks to help take New Zealand businesses to the next level on the global stage.
• The tight collaboration occurring between Angel groups up and down New Zealand.  The level of cooperation is partly in response to the lack of venture funding in New Zealand, but enables us to more effectively leverage the small pockets of experience we have in NZ.
• Our unique global position. I describe this as “we’re a village but on a global stage we’re highly respected and get country credibility”. Practically this means we have extraordinary access to global influencers and when we work closely with the NZ government on the international stage – stuff happens. In NZ we’re all only 2 or 3 degrees separated from the Prime Minister or the NZ Ambassador in the US or the NZ Ambassador in China…in what other country in the world could you build a global business with this level of access?
• The gradual shift in the risk / return profile Angels are seeking.  Historically Angels, largely lead by thinking from the US, have been following a 30 times return, 1 in 10 investment profile.  Basically we’ve sought to build a portfolio of investments where one would “shoot the lights out”, a couple would “do OK” and we’d “lose on the rest”.  With the massive contracting occurring in Venture Capital world-wide Angels / Private investors are being required to invest deeper and longer.  The response we’re seeing to this is a shift to the centre – a focus on smaller returns but lower risk.  This thinking is being lead by Basil Peters and supported by his experience and research published in his book called Early Exits.  I encourage all of you to read this book.

Interestingly, I think that this conference is starting to get so good now that the international networking achieved at the NZ conference is just as powerful as what I managed to achieve in the US and Singapore conferences earlier in the year.  On a further note i’m aware of at least two deals that were struck between investors at the conference and the seeds sewn for a new angel group.

Arch Angel Award

We also announced this years recipient of the NZ Arch Angel award – Bill Payne. Oddly for this award Bill is an American, so what were doing given this award to Bill? Simply put Bill has been helping the development of the NZ Angel scene extensively over that last 3 or more years. His contribution culminated in this years extended stay where he had a dramatic impact on raising the profile of angel investment, assisting angels groups and providing one on one mentoring to a huge number of NZ entrepreneurs. Thanks to Bill and we look forward to seeing him out again next year.

After a long courting period I’m pleased to announce that we’ve entered a formal partnership with the New Zealand Venture Investment Fund (NZVIF) for their seed fund (seed co-investment fund / SCIF).

This partnership enables us to access up to an additional $500,000 in matching funds for early stage New Zealand companies that we’re backing, or could be backing in the future.

I have to admit that we were pretty skeptical of the SCIF programme when it first launched a number of years back. But we’ve been proven wrong and found the people at NZVIF to be incredibly professional, knowledgable and respectful in their approach to supporting the early stage investment market.

We now have seven companies in our current portfolio that are receiving a leg up from SCIF.

Press release below….

NZVIF partners with Movac to invest in young companies

The New Zealand Venture Investment Fund and prominent Wellington angel investment group Movac are forming an investment partnership which will see NZVIF investing up to $4 million into new companies alongside investments made by Movac.

Movac Director Phil McCaw said the partnership with NZVIF’s Seed Co-Investment Fund will increase the capital available to develop a number of highly promising young companies.

“New Zealand produces great ideas and really promising companies. What we, as a country, lack to some extent is capital. What has been pleasing, from both entrepreneurs’ and the industry’s perspective, is the growing level of angel investment in recent years which is assisting innovative young companies to grow.

“We have already invested into a number of companies alongside NZVIF, via existing co-investment partnerships NZVIF has with other angel groups. Establishing this investment partnership will increase the pool of growth capital available to the promising companies which Movac invests into.”

This is the twelfth partnership NZVIF has entered into through the Seed Co-Investment Fund and the first in Wellington. To date, NZVIF and its angel partners have co-invested over $44 million into 40 companies.

When Movac invests into a new company which fits NZVIF’s criteria, NZVIF will match that one-to-one through its Seed Co-Investment Fund.

NZVIF chief executive Franceska Banga said that angel investors are the mainstay of investment for high growth start-ups in New Zealand and the best source of both advice and capital for entrepreneurs starting down the path of building a global company.

“NZVIF is keen to encourage more angel investors to assist in building the pipeline of young innovative start-ups.

“The more active and strong angel groups we have, like Movac, the greater the pool of capital to build the pipeline of young businesses. Angel investing is becoming an important asset class in terms of commercialising New Zealand innovations.”

Hamilton, New Zealand – 6 November, 2009 – AngelLink, a national angel investment network backing New Zealand high growth technology ventures, with an emphasis on life sciences, engineering and ICT, welcomes the inclusion of the Life Science Angels Network into its structure.  The move is designed to create greater scale and focus in the life sciences angel investment space.

AngelLink’s members include some of the country’s leading biotechnology and high technology investors including Movac, K1W1 and Sparkbox.  AngelLink has also partnered with the NZ Venture Investment Fund (NZVIF) through its Seed Co-Investment Fund.

AngelLink Chairman Chris de Boer says, “Our national network of angel investors and international partnerships provide excellent leverage for high-growth potential start-up companies that are seeking to develop unproven markets or technologies.  Life sciences are a key part of AngelLink’s focus. The inclusion of the Life Science Angels Network helps AngelLink achieve greater scale and expertise in this area.  As a result we’ll see more investment activity in the life sciences space which will benefit the network and the sector in New Zealand.”

The Life Science Angels Network was created by a collaboration between NZBIO, ICE Angels and Auckland Plus to validate the concept of creating a virtual network of angel investors who are interested in investing in life science technology deals.

Andy Hamilton, Director, ICE Angels says, “When it comes to early stage funding there is a case for some sectors, such as life sciences, to have specialisation.  The ongoing viability of the sector depends on its ability to raise funds from a variety of sources and to complete value-creating deals. This access to funding is consistently one of the key constraints identified across the bioeconomy in New Zealand yet, based on international experiences angel investment has the ability to be a key part of the funding solution.”

“Having validated the need for The Life Science Angels Network we readily came to the conclusion that the natural home for the network was actually AngelLink as they already have in place a number of critical partnerships for deal flow in the life sciences space.  As a small country we need to take every opportunity to achieve scale.”

The merger will include all research, contacts and emerging international partnerships, including the Australian Life Science Angel Network, Life Science Angels Inc (USA) and Bansea, Singapore.

NZBIO, the national bioscience industry group, has applauded the transfer to AngelLink.

Chief Executive Bronwyn Dilley says, “AngelLink’s strong focus on life sciences and nationwide coverage will be further strengthened by the inclusion of the Life Science Angels Network.  Angel Investment is an important part of the investment landscape and a strong, focused approach is vital to the success of a mature New Zealand life science industry. It’s great to see AngelLink continue to gain momentum, as the result will be more early stage life science projects are spun out of the lab into the market with benefits to all.”

AngelLink, which was initiated by WaikatoLink, the commercial arm of the University of Waikato, connects investees to the full continuum of funding through its lifecycle from science to market spanning proof of concept, angel investment, early stage venture capital, expansion stage venture capital, and public markets.

AngelLink was launched at a function at NZX in August.  The Minister for Research, Science and Technology, Wayne Mapp was the guest of honour.

At the launch, WaikatoLink Chief Executive Mark Stuart said, “At an industry level there is a real need to make some improvements to generate more economic benefit from life sciences and technology research.  We need to start with the end in mind and bring the market in from the start. We need to encourage a co-ordinated approach and funding models that encourage collaboration rather than competition.  AngelLink represents a step change in early stage company investment by formalising visibility to upcoming investment opportunities to all of the partners across the investment continuum”.

Dr Mapp said, “The highest priority for the New Zealand Government is growth. Future opportunities will depend on innovation and entrepreneurship and much of this comes from fundamental science. AngelLink will connect research and investors with the intent of getting science to the marketplace. Our future prosperity depends on getting this right.”

The first Australasian Life Science Angels Network Meeting today in Queenstown, part of the annual summit organised by the Angel Association of New Zealand, is the setting for the first meeting between AngelLink, the Australian Life Science Angel Network and Bansea, Singapore.

For more on AngelLink see http://www.angellink.co.nz

Sir Stephen Tindall has been appointed the first ever New Zealand Arch Angel at the Angel Association of New Zealand’s second Angel Summit in Queenstown on Friday.

Angel Association Chair Andrew Hamilton said the award of Arch Angel honours Sir Stephen’s extraordinary contribution to the angel investing industry.

“Sir Stephen Tindall has invested over $150 million in seed and venture capital companies – both directly and as a fund-of-funds. He and his family have invested in over 100 New Zealand companies.

“His passion is to assist young entrepreneurs and he has invested in a variety of sectors including biotech, clean tech, IT and design led companies. He wants to see New Zealand develop as a leader in the ‘knowledge economy’, and to help create a culture of making New Zealand ‘cash flow positive’ in international goods and services trade.

“Sir Stephen’s wider contribution to New Zealand has been exceptional , including his charity work, founding Kea – the expat organisation that now has over 25,000 members worldwide, focusing on climate change, or actively investing into emerging Kiwi companies that are now taking on world markets. His contribution is quite extraordinary in a world-setting and we are extremely grateful to Stephen for his continued support and investment.”