“Ventures”
New Zealand is consistently producing valuable startups More opportunities per capita in New Zealand?
Angel Investment Basics We invest for equity. Typically minority positions (10-30%). Active & supportive, but not in management. Long term investments (7+ years). Returns via acquisitions or IPOs. Not: loans, “At K1W1 we have invested in hundreds of kiwi startups over the last share buy back, dividends. 20 years. We invested in Tuhua in 2016 and have subsequently co- invested with Tuhua in a number of their portfolio startups. Their deal sourcing, team, and investor engagement are first class.” – Sir Stephen Tindall
Angel Investor Basics Variety of motivations: stay involved, give back, grow NZ, personal development. Universally: ROI. Typically 1-10% of wealth (over 5-10 years) Passive: $5-25k per round Active (going on board): $50-250k per round Funds: $20 – 250k (divided into 10 – 100 startups) Ice Angels Avg: $47k/year, 2.5 companies/year “As newer investors to the startup scene, we have loved how Tuhua Most seek to build a portfolio of 20+ has enabled us to invest in such a broad range of startups.” – Janene Draper, Co-Founder of Farro Fresh and Tuhua LP/ Ice Angel
What are we looking for? Unique insights or perspectives Experienced entrepreneurs that have built and sold businesses Large, growing, and durable markets Breakthrough technology Capital efficiency: the ability to make massive strides with limited resource IP or a defendable competitive advantage Lead Investors that can add value Price, terms, and potential upside in line with stage and risk Prospective acquirer value and an exit strategy
Breakthrough technology founded on unique insights / Large, growing, durable markets
IP or a defendable competitive advantage/ Prospective acquirer value
Experienced entrepreneurs that have built and sold businesses
Unique insight or perspective / Lead investors that can add value Market cap: US$9.9B
What is investment for? • Building product Not: • Growing team Large founder salaries • Securing IP Buying out founder shares • Business development Paying off debt • OPEX / “cash flow gaps” • Travel / conferences/ BD
Common pitfalls? • Failure to diversify / going long on the first startup you fall in love with. • Apathetic/ indiscriminate follow-on investment. • Market validation? Hint: You are (probably) not the customer. • Following the crowd (blindly)… but going alone can be just as bad. • Invest in over diluted or misaligned management. • Short-term performance ≠ guaranteed success. • Getting creative with legal terms focus on innovating in the business, not the structure.
Thanks. Questions? Jack McQuire J.McQuire@theicehouse.co.nz +64 21 343 363
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