More money for entrepreneurial women

ArcAngels chairwoman Cecilia Tarrant.

A government-backed investment fund has gone into partnership with ArcAngels, a group of private individuals focused on investing in female-led business start-ups.

The New Zealand Venture Investment Fund (NZVIF) will invest dollar for dollar alongside ArcAngels through its Seed Co-Investment Fund (SCIF).

ArcAngels chairwoman Cecilia Tarrant, a director of Fletcher Building and former Morgan Stanley managing director, said it approached NZVIF to form the partnership on the back of other relationships the fund already had with angel networks around the country.

Tarrant said the deal means it would have access to more capital than the size of its membership suggested.

"That makes us more attractive for entrepreneurs."

ArcAngels was launched in 2014 and has around 30 members although Tarrant said it hoped that would grow to around 40 by mid-year.

So far it has invested $1.6 million in eight transactions including into Pictor, Fuel 50, Acuite and Engender.

Tarrant said with the NZVIF partnership it would hope to increase its investments to around 10 per year both through new companies and follow-up investments.

NZVIF investment director Bridget Unsworth said the ArcAngel partnership was the 17th it had entered into through its SCIF.

To date NZVIF and its angel partners had co-invested around $142m into more than 150 companies.

Unsworth said the ArcAngel partnership would double the capital available to companies.

"The past year has seen continued healthy investment activity across New Zealand with more than $60 million invested by angel funds and groups.

"There is a healthy level of syndication of investments among different angel groups meaning they are likely to invest in opportunities throughout New Zealand. Early stage investing is a high-risk investment class and so diversification is important."

Tarrant said around one-third of start-up companies in New Zealand were led by women or had a major female component but the number of female-led companies which attracted investment was lower.

At the same time the number of women angel investors was also lower.

Tarrant said the group hoped to replicate the success of the New York-based, women-led angel group, Golden Seeds, which has invested more than US$80m ($114m) in more than 76 women-led companies.

"Our principal aim is to make successful investments. But we also want to empower more women entrepreneurs, strengthen their competitiveness and maximise the success of New Zealand's small business engine for greater economic growth in the long term.

"Many of our members are experienced angel investors with the capacity and capability to be able to provide mentoring and ongoing support to the female-led ventures the group invests into."