Asian angel investors keen on good deals in NZ, want to see two-way flow
Singapore-based angel investor Jayesh Parekh said Asian investors are keen on finding deals in New Zealand but also want to see Kiwi angel investors reciprocate investment in their home markets.
Parekh is a managing partner in venture firm Jungle Ventures, which invests across all early stages of start-ups in Asia. He's attending the annual New Zealand Angel Summit in Queenstown which has been combined this year with the Asian Business Angels Forum.
The venture capitalist is speaking on how to build bridges into Asian angel markets, where he says high risk angel investment and entrepreneurship is booming as much as it is in America's Silicon Valley, following publicity over successful exits.
Parekh has successfully exited one New Zealand investment when Auckland-based eBus, which offers a cloud-based TV ad delivery system, was bought in 2013 by London-based media logistics operator IMD. He made two times his investment in just 18 months and was "very happy with that", he said.
The government's business investment strategy updated today says in the next three years it wants to attract a further $5 billion in foreign investment and to double the amount of capital that migrant investors and entrepreneurs bring to New Zealand from $3.5 billion to $7 billion.
Parekh said some affluent kiwi angel investors need to travel to Asia and "show their good faith" as the investment flow shouldn't just be one way.
"It would help if some Kiwi angel investors made some investments in companies and various funds in Asia to make that network and connections and raise visibility and awareness of New Zealand," he said. "Asian entrepreneurs want investment from all the marketplace, not just India and China."
He said Kiwi angels who have lead investments in local companies seeking more funds should be willing to share allocations in the good deals to Asian angel investors rather than them just being offered the not-so-good ones. Some successful exits need to be experienced before the tap will be turned up by Asian angels, he said.
New Zealand also needs more younger entrepreneurs willing to take risks on their good ideas with a worldwide trend towards college and university graduates getting excited by and risking the entrepreneurial lifestyle, he said.
Mobile and digital technologies are in favour worldwide with angel investors including "more exotic" technologies that are Parekh's favourites such as drones and robotics.
Technology ventures are being invested in by angels without expertise in that sector who are jumping on the trend to diversify their portfolios along with ex-entrepreneurs and experienced former chief executives keen to mentor and be part of the company they've invested into, Parekh said.
The trend worldwide is for entrepreneurs to have to give away around a 20 to 25 percent slice of their start-up in order to get the early investment capital they need, although higher risk ones may find that share gets closer to 40 to 50 percent depending on competition, Parekh said.