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Entrepreneurs
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Social impact investor Derek Handley offers to relocate US entrepreneurs to NZ

His new venture capital company plans to invest in 15 startups in the next two years.

Fiona Rotherham
Tue, 15 Nov 2016

In the wake of the US election, Kiwi social impact entrepreneur Derek Handley says he's had early interest in an offer to relocate American entrepreneurs to New Zealand if his activist venture capital firm invests in them.

Aera VC, officially launched last week, plans to invest in 15 startups in the next two years, after already investing in six while it was still operating under the radar.

Mr Handley says he's already had a number of inquiries about the relocation offer, which would involve entrepreneurs shifting to New Zealand under a Global Impact Visa – a new visa category being piloted over the next four years aimed at attracting up to 400 experienced entrepreneurs and investors to create and support innovation-based ventures and startups teams.

"People are thinking about where they want to live given what happened. Some people are really angry and upset," Handley said from his Brooklyn, New York, base.

"They have a number of other alternatives so whether it will play out remains to be seen."

New Zealand's innovation eco-system lacks third-time entrepreneurs who have had a failure and a successful exit who could use their experience to help Kiwi companies scale up faster, he says.

"We need more of these people who have built companies, who have failed and succeeded and have worked first hand to be more environmentally and socially responsible and bring a track record from around the world. The more the better," he says.

Now based in New York
Mr Handley, who co-founded NZX-listed Snakk Media and global mobile marketing and media company The Hyperfactory, said he plans "in the medium term" to return to live in New Zealand, where he visits around six times a year and is active in a number of governance, advisory and investment roles.

All of the companies that Aera funds have to have a social or environmental mission as their main purpose and then also meet more traditional venture capital metrics such as high growth, a disruptive technology and a large potential market.

The social "term sheet" includes a pay-it-forward clause committing founders to direct some of their future profits toward community causes of their choice.

The social enterprises the firm has already invested in include Goodworld, founded by Kiwi entrepreneur Dale Nirvani Pfeifer, now based in the US, whose technology is changing the way people connect online by making it easier to donate to charities.

Aera's only New Zealand investment so far is Eat My Lunch, which addresses child poverty through a buy-one, give-one model for lunches. Mr Handley has 3.32% stake in the company while the Aera fund has taken a 1.71% stake.

Mr Handley said the VC firm is focusing on early stage between seed capital and series A fundraising. It will typically invest between $US100,000 and $US500,000 in each company, which would give it a 2-10% stake.

"We're trying to build a sweet spot and expertise in finding them earlier before large funds appear on the radar," he says.

"This is not about control but making sure companies have the capital they need and founders and management teams are highly energised and motivated to give back."

Mr Handley says the firm, which is run by a foundation funded by private wealthy investors, is looking at a wide range of industries including new business models in media and financial tools to help socially responsible investing.

(BusinessDesk)

Fiona Rotherham
Tue, 15 Nov 2016
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