Start-up fund aims to take 20 companies global
A $4.6 million start-up investment fund has injected new capital into the sector after a recent soft period.
Global from Day One is targeting about 20 start-up companies with immediate international ambitions.
Expected areas of focus are cloud-based technology, disruptive technologies, mobile and modern media, and IP-driven niche market products.
The fund raised $2.3 million from private individuals who include some of New Zealand’s most experienced and active early-stage investors, as well as international investors.
Co-investor the New Zealand Venture Investment Fund matched the $2.3 million investment and will co-invest in opportunities that qualify for its seed fund.
NZVIF chief executive Franceska Banga says the start-up investment sector had been through a soft period over the past year – particularly in terms of new investments.
“Global from Day One will bring in capital specifically for initial investments, which will be welcome.
“In a small economy like New Zealand it is important that we see angels collaborating to bring deals together and to increase the capital available for investment.”
Angel Association chairman and Ice Angels investor Ray Thomson will chair the fund’s investment committee, which will consider proposals from throughout New Zealand.
“There is a pipeline of interesting investments and we are currently considering two which are likely to be funded shortly,” he says.
"Global from Day One will not make follow-on investments, so opportunities will gravitate back to angel groups, VCs and other funders for follow-on investment rounds.”
Andrew Duff, chairman of early-stage investor Sparkbox ventures, which is managing Global form Day One, says New Zealand has highly creative entrepreneurs whose big challenge is getting into offshore markets.
“Many ideas have traditionally struggled due to lack of initial investment, cashflow, experience and connections. Even more so today, speed to market is seen as critical,” he says.
gbond@nbr.co.nz
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Comments and questions8
Has anyone ever heard of a venture capitalist not saving money for follow-ons? Won't they just get shafted in the next round by the founders who re-invest at a low price knowing VIF won't match them?
Ideally they would only invest in companies that have uprounds, not down rounds.
However, I am not sure if NZVIF history is that good.
In a downround, founders shouldn't have the cash to reinvest so the spoils would go the the VC's.
The bottom line is that VCs worldwide save cash for future funding rounds for good reasons. Now either Sparkbox/VIF know something no-one else in the world does, or they are idiots.
True - Always best to double down when you have a winning hand.
Yes I have heard of a number of funds not retaining cash to invest. all of them based and backed by the NZVIF.
Globalisation is what has killed the world economy in the first place.
I smell the icehouse in here? is that right?
If so its going nowhere.
"Expected areas of focus are cloud-based technology, disruptive technologies, mobile and modern media, and IP-driven niche market products."
gee what another waste of time when we have export ready industrial companies actually with products people want who can not get funding.
Head in the sand a*se in the sky stuff again.
When will we wake up and fund those great idea's which we already have - we don’t need new we have more than enough now unless of course its to fund them so they can sell themselves offshore with no net result back to NZ, we seem to do that well.
Absolutely right. If Icehouse is involved then it doesn't stand a chance of getting anywhere. Look at their "3000" initiative..