Top venture capitalist hears Kiwi proposals

LanzaTech's co-founder and chief scientist, Sean Simpson, has said that the US$3.5 million the company received from Khosla Ventures in 2007 was the firm's first 'big break'. Photo / Supplied

Eight cash hungry Kiwi tech companies have pitched their business plans to one of the world's most high-powered venture capitalists during an event held at the top of a central Auckland high-rise this afternoon.

But Silicon Valley-based Vinod Khosla, the billionaire founder of high-powered investment firm Khosla Ventures, is giving away few clues about whether any of those companies will receive funding.

"There's a number I'd intend to follow and delve deeper [into]," said Khosla, who co-founded software giant Sun Microsystems in 1982.

He said the process of allocating funding took three to four months, sometimes longer.
"But yes, there are some very interesting ideas."

Companies making pitches this afternoon included high-tech electric folding bicycle maker Yike Bike, robotics developer Rex Bionics and Carbonscape, a Blenheim-based firm whose technology turns sawmill waste into valuable products including carbon, syngas and bio-oil.

Khosla said Yike Bike and Rex Bionics in particular had caught his attention.

"Most of them were good businesses, the question I will ask is - can I contribute enough thinking to make them much bigger than they are thinking of themselves as?" he said.

Khosla's firm has already sunk US$3.5 million into Auckland's LanzaTech, whose technology converts polluting industrial gases into high-value chemicals such as ethanol, used in the production of biofuel.

He said the innovation eco-system in New Zealand needed developing.

"Most of that is giving entrepreneurs confidence," Khosla said. "I always say you need overconfidence and arrogance to be an entrepreneur - it's an essential quality of entrepreneurship [to] almost not know what your limitations are ... I think that is missing [in New Zealand]."

To compare, he said the innovation ecosystem in the California's Silicon Valley was very well developed.

"Almost every kid graduating from Stanford [University] thinks they can start a company," he said. "I would venture to guess that 50 per cent of the graduates of something like the computer science department of Stanford end up starting a company or being part of a company even before they graduate."

Khosla said that while Silicon Valley teenagers idolised Facebook founder Mark Zuckerburg, Kiwi start-ups needed more local role models like LanzaTech, which signed up its first commercial customer this week.

"I see LanzaTech as a very large, public company in five years, with a wide array of products and hopefully leveraging a large number of partners - very large corporations."

Forbes has valued Indian-born Khosla's personal fortune at $1.3 billion. He flew into Auckland on his private jet.