Angels light the path for NZ start-ups

(from left) Bruce Bartley, John Huston, Rudi Bublitz and Steven Saunders pitch the angel investing model to entrepreneurs. Photo / Supplied

Leading American angel John Huston as well as experienced New Zealand investors Steve Saunders, Bruce Bartley and Rudi Bublitz, last week told a Tauranga audience of entrepreneurs why the start-ups should seek out angel investors.

"I was pretty stunned to hear about the size and vigour of the Tauranga angel group and since I was in the country I dropped by," said Mr Huston, who was in New Zealand to speak at this week's angel investor conference in Auckland.

"My desire is to help young ventures avoid a lot of mistakes that those of us who've been in business for many years have committed," said Mr Huston.

Mr Huston added that he had experienced a 30 per cent death rate in his portfolio.

"Of the 50 companies, I have had eight large exits, so I am now in Nirvana. But even with these companies, they've all missed payroll a number of times - and these are the winners. If you have a first-time entrepreneur and you couple them with a seasoned angel who has seen a number of deals, I think you have a much more powerful combination and increase the odds for success."

Bruce Bartley, who runs the Engine Room group in Taupo for entrepreneurs, said he had started a dozen businesses and was involved in six, including the Spidertracks GPS tracking app.

"The normal angel model of building a portfolio doesn't work for me," he said. "As an investor, if you've got a small amount in you can't do anything, so I get a larger chunk of a smaller company so that I can step in and help it back on to the rails."

Rudi Bublitz, born in Germany, opted for New Zealand because he liked the relaxed Kiwi style. He is a co-founder of a new group, Flying Kiwi Angels.

"In a typical angel what you're looking for is someone who's done it before, they've made enough money to invest and lose it all," he said. "You want Angels that can share their experience and get you through."

Steve Saunders, head of Tauranga's Plus Group of agro-tech companies and a member of the Tauranga Enterprise Angels group, said he was an entrepreneur who invested in entrepreneurs.

"I love the passion of entrepreneurs," he said.

Mr Saunders stressed the importance of staying connected worldwide and the importance for a New Zealand business to build global scale.

"You've got to get around the world and meet people," he said.

He added that New Zealand had a golden ticket from a primary sector point of view because of its clean reputation.

"People want to be connected to what they eat. Safe food connectivity is our opportunity."

Background

• American angel investor John Huston launched the first Ohio TechAngel Fund in 2004 with 50 investors, which became a founding member of the USA's Angel Capital Association.

• Now with 340 members, OTAF is one of the world's largest angel groups and recently launched its fourth sidecar fund at $7.3 million.