Early-stage companies, who have at times struggled to find local funding, have a new option.

The Crown-backed New Zealand Venture Investment Fund (NZVIF) has officially cut the ribbon on its $300 million Elevate NZ Venture Fund.

Elevate was first flagged with Budget 2019, when then-Economic Development Minister David Parker said his Government would address a "venture capital gap" by diverting $240m of NZ Super Fund money to a new $300m fund, which would also include $60m from NZVIF to create a new fund.

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Budget 2019: Govt raids Super Fund to boost venture capital funding

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Mid-sized companies in the $2m to $15m annual turnover range were not well supported by New Zealand's capital markets, although startups were able to get funding, Parker said.

"Filling that gap will help reduce pressure on companies to sell prematurely to overseas buyers, which happens when you have weak early-stage capital markets."

A new wave of Australian VC companies, including Blackbird Ventures, Square Peg, Rampersand and Airtree, has made a series of swoops on early-stage NZ companies recently, along with US players. The Super Fund has until this point largely stayed clear of early-stage companies, resisting an overture from Rocket Lab, although the Crown has been active through NZVIF and ACC's investment arm.

The new Elevate Fund turbocharges NZVIF, which was established in 2002 and over the next 16 years invested $173m in some 239 NZ companies.

NZVIF chief executive Richard Dellabarca said that with Elevate, his agency would follow its long-standing model of coinvesting with private equity outfits - who will be in the driving seat.

"Elevate will not invest directly into companies and will not be involved in the day-to-day decision-making of the underlying VC funds. Instead, we'll be focused on selecting the most appropriate VC fund managers and support them to build connections while allowing them the flexibility to do their jobs," Dellabarca said.

Partners will be asked to at least match Elevate's investment; NZVIF is hoping private funds will exceed its own contribution.

Elevate's first investments will be made in around three months.

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"The venture capital fund managers will make predominantly Series A and B investments - of between $2m to $20m - into early-stage high-growth New Zealand businesses," Dellabarca said.

"Once the capital is allocated, Elevate NZ will recycle returns from early VC funds and reinvest that capital back into the market for a further 10 years.

"The vast majority - at least 70 per cent - of the available capital will be invested into VC funds with a New Zealand connection – which means they must have a local general partner and investment manager."