Meeting gives backers wings to help with development

By Ray Thomson

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Delegates at the Angel Summit would be wiser about investing in new ventures.

An angel investor is also looking to help entrepreneurs and hopefully see the local economy do better as a result. Photo / Thinkstock
An angel investor is also looking to help entrepreneurs and hopefully see the local economy do better as a result. Photo / Thinkstock

What did the Dunedin summit set out to do?

The purpose was to increase the professionalism of angel investing in New Zealand. We tackled the issues of due diligence, valuations and term sheets. We heard from international expert Basil Peters on the importance of and rationale for looking for early exits. The summit was all about making us better angel investors and learning and networking with others with a similar mind to help entrepreneurs and New Zealand economic development.

What criteria do angel investors generally use to invest in New Zealand and internationally?

They look for unique ideas or projects that are internationally scalable and are led by a good team.

How would you define an angel investor?

Someone who is looking for more than just investment returns. An angel investor is also looking to help entrepreneurs and hopefully see the local economy do better as a result.

How much do small New Zealand businesses rely on angel investors?

Private equity investors and banks only fund larger profitable companies. Angels fund earlier stage companies that generally are not yet profitable.

What are some recent triumphs of angel investors in New Zealand?

There are angel-backed companies going through big valuation increases - PowerbyProxi and Lanzatech - and a number looking to list - Triplejump and Rex Bionics. But the success story has been Pacific Edge, which was spun out from Otago University 12 years ago and is now capitalised on the NZX at more than $400 million.

Why do some angel investors prefer to invest in groups?

This is high-risk investing and doing it in groups allows capital to be aggregated. Investors can also leverage the expertise of others in their group.

Are there any particular sectors that New Zealand angel investors are interested in?

They tend to invest across the broad spectrum of business but the two most popular sectors are ICT and life sciences.

What drives you as an angel investor?

I want to make a difference to New Zealand's economic performance. I could easily just invest in the sharemarket and go and live at the beach. But I enjoy the challenge of angel investing and love working with entrepreneurs. Entrepreneurs are a special breed who deserve all the help we can give them. I have invested about $1 million in about 25 companies. But my biggest start-up success has been a large investment with a group of friends in Manuka Health, which I helped found seven years ago. It has done spectacularly well with sales now more than $30 million and ebit over $5 million.

Ray Thomson chairs the Angel Association of New Zealand.

- NZ Herald

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