The first ever Investment Showcase was held at The Orchard last week. Northland Inc, NZTE, Callaghan Innovation, The Angel Association and the e-centre at Massey University worked together to help seven aspiring early stage businesses pitch to Angel investors. The businesses were looking for assistance – capital, expertise, market opportunities, connections - to grow their businesses and the Angels were looking for investment opportunities.
If you are familiar with Dragons' Den on the telly you might be forgiven for thinking it was one of those, but, thankfully, the reality is somewhat different. We need Angels not Dragons, and I may be doing Dragons' Den a bit of a disservice here as we only get to see on TV the cut and thrust of negotiating a deal, as the reality is for early stage businesses they most often need more than cash. They need capital, yes, but often what they really need is the experience of someone who has walked their path before, advice or specific knowledge of the industry they wish to compete in or maybe to open up new market opportunities through Angel connections.
Angels on the other hand are looking for a return on investment. They will also be looking to hedge their bets by not having all their eggs in one basket. They may, for example, syndicate with others (join up with others to invest in one business) and diversify their investments (invest in a number of opportunities knowing that not all businesses will succeed).
As a result, there are Angel networks where some trust is built up to take advantage of deals without necessarily having to turn up to every event or even clubs where they may delegate someone to invest on their behalf. But there is another side to Angel investors where often they will prefer to invest in businesses in their own community, in technologies or sectors that they believe in or causes they believe in.
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Yep, they have a conscience. That said, their entrepreneurial DNA may cause them to hunt outside their patch or simply do the deal when their instincts tell them to. There is a sense that both the fire-breathing Dragon and the beneficent Angel are at work in the psychology of the deal.
All of this does not necessarily add up to deals being done. The match should work for both. But you need a place for these two groups to meet and negotiate. The Investment Showcase attracted investors from across Northland and New Zealand, which increases the chance of a deal being done. It is also a testament to the organisation of the event and the quality of investment opportunities.
So, here's a pat on the back to those businesses that put themselves on show, presented their aspirations and pitched. You were fantastic. And, here's to those Angels that made the effort to support those businesses, thank you, and be the beneficent Angel, go on.
Our team reflected on the fact that three years ago, when we started on this journey, those investment opportunities where just not there or just not ready. There is no doubt that Northlanders are entrepreneurial and there is no doubt that we are making progress in supporting those entrepreneurs. That was evident on the night. This was a great first step in creating an environment for our entrepreneurs to flourish, here.
■ Dr David Wilson is the Chief Executive Officer of Northland's Economic Development Agency, Northland Inc, and Chair of Economic Development NZ