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Two of New Zealand's leading investment groups, Sparkbox and K1W1, have joined forces to launch a Start-Up Fund for companies from business growth centre, The Icehouse.
The Icehouse CEO Andrew Hamilton says the Start-Up Fund will provide early stage funding to enable outstanding start-up entrepreneurs with promising ideas to test them and build a case for the next stage of funding from angel investors.
"This is pre-angel and post friends and family funding. Since 2001, The Icehouse has been an active facilitator of start-up funding in the New Zealand market but too often the funding is too late and great ideas can fall over."
Hamilton says the Start-Up Fund will help to bridge the gap that most budding entrepreneurs must survive in the transition from self-funding their business to external investors, who typically wish to invest in proven business concepts.
"The Icehouse Start-Up Fund will enable people with good ideas to much more quickly determine whether they have a viable concept and, secondly, can they turn it into a business."
The two partners in the Fund, Sparkbox and Stephen Tindall's K1W1, are joined by the New Zealand Venture Investment Fund's Seed Co-Investment Fund ("SCIF"), which will match the investments made. This will enable Kiwi entrepreneurs to get up to $150,000 in funding per project. It is expected that the Fund will fund up to five projects a year.
Sparkbox's Greg Sitters said: "We like what's going on at The Icehouse. It is clearly New Zealand's most successful business growth group and its incubator, which accelerates start-ups, is something we have been keen to get alongside for some time. Since the establishment of the angel investment market in New Zealand, led by Icehouse affiliate ICE Angels, we have noticed there is now a gap in the market 'pre-angel' and this Fund with K1W1 fits nicely.
"We are targeting new residents of the ICE Accelerator, the Icehouse's incubator, who often are needing up to $150,000 to prove market size, market interest and to protect intellectual property (IP). If collectively we do our job well, the result should be an increase in investable New Zealand companies and successful founders."
Andrew Duff of Sparkbox, said "The Icehouse Start-Up Fund is an important development which allows Sparkbox, K1W1 and NZVIF to work closely alongside the Icehouse team in order to assist the founders with their ideas, prove markets, protect IP and deliver investible companies to Angel funders."
Andrew Sharp, General Manager and co-founder of the Icehouse graduate Black Hawk, which is involved in vehicle tracking solutions, says his company would be years ahead of where it is now had the Fund been in place when he was getting the company off the ground in 2005.
"This is brilliant," says Sharp. "It's almost impossible to overstate how tough it is to get a start-up company with big ambitions off the ground. I'm sure the Icehouse Start-Up Fund will really help to reduce the failure of promising start-ups that simply can't fund the development of their ideas."
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