Investment angels show their faith

Bill Murphy says the investment group has been working hard to raise awareness and target potential investors.

Members of Tauranga's Enterprise Angels are working to achieve the investor group's first exit this year, from app company Showsmart, and have good investment flow in the coming quarter, says executive director Bill Murphy.

That follows a strong performance in 2013 with an increased number of local Bay of Plenty deals in the mix, he said.

Last year the group, which has grown to 115 members, invested $1.3 million in 12 deals, nine of which were investments in new companies and three follow-on investments.

Until the end of 2012, just three of the 19 deals Enterprise Angels had done till that date were into Bay of Plenty companies.

"But three of last year's new nine investments were local," said Mr Murphy. "That's a 100 per cent improvement."

He said the investor group had been working hard to raise local awareness and target potential investors.

"The crucial thing is local business people being aware they can have their vision tapped into," he said.

"We're saying we can make the growth of really good companies possible. Some business people who never would have dreamed of getting outside investment, have realised that private angel investment is actually happening in local companies like theirs."

Last year's deals involved some of the new investors who have joined the group, which also has chapters in Taupo and Rotorua.

"All new members go through an induction programme," he said. "It's a high-risk space. If someone becomes a member it doesn't mean from day one they understand how to invest in the early stage space."

Angel investing was a portfolio game, he said, with investors needing to build up a group of 10 or so companies that worked across the range of sectors the investors was interested in.

To date, none of the investments made by Enterprise Angels investors has achieved an exit from any of its portfolio investments - that is been sold to another buyer or listed on an exchange, in order to achieve a return for the original investor.

But Mr Murphy said that could change imminently, with Smartshow, one of the earliest investments by members of the Tauranga group, made back in March 2012, preparing itself for a potential sale.

"Smartshow, is absolutely 100 per cent focused on their exit," said Mr Murphy, who is a director of Smartshow. "They are actively engaged with potential exit partners and we're driving that hard."

Smartshow, which is based in Wellington, has created a mobile phone application that trade and event organisers can use as part of their package to supply to vendors and event attendees.

The app allows users to get specific information and content details on a company as they pass their event stand, or before and after the event.

"Smart Show sales continue to grow strongly off the back of our newly released V6.0 of ShowGizmo," said Smartshow managing director Frances Manwaring.

"Finalising licensing and other arrangements with very large players in our market is a key focus for 2014."

Mr Murphy said Showsmart was highly regarded internationally in its niche.

"Much bigger companies than them are considering acquiring them for the world-leading technology."