Over 100 Angel investments in 2010

Over 100 Angel investments in 2010

The Young Company Finance Index reports more than $53 million was invested by angel investors into young companies in 2010. Over 100 deals were completed in 2010 with 47% syndicated across different groups. Average investment amount reduced to $522,000 in 2010 compared with 672,000 in 2090.

Angel Association Executive Director Colin McKinnon says the active angel investing industry is good news for the New Zealand economy. A vibrant angel investing industry helps promising New Zealand technology companies and benefits the economy through increased employment, productivity and growing entrepreneurial talent. Entrepreneurs from Dunedin to Auckland are building young global companies from New Zealand. Investments were spread across Software and services (26%), pharmaceuticals (23%), technology, hardware and equipment (16%) and food and beverage (10%).

“Investors have syndicated 47 percent of deals in 2010. We are learning from international experience that investors in any region need to connect with investors outside their geographic region in order to get deals done.”

“However, there are challenges ahead for New Zealand young companies as they need larger venture capital funds for growth. New Zealand venture fund managers are struggling to raise new capital while institutional investors are jaundiced about the venture capital asset class.”

“Entrepreneurs are having difficulty raising $2 million to $5 million from New Zealand investors. Raising capital from international investors is necessary, costly and time consuming. Understanding how to raise capital internationally is a skill that few entrepreneurs will have developed. Shifting the business closer to sources of capital is often a difficult choice for entrepreneurs of whether to go early to succeed fast or stay and grow locally.”

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