One of the first two investment opportunities being eyed by a new national investment network AngelLink is in the ICT area, says chairman Chris de Boer.
He declines to name either prospect, saying due diligence and other processes mean firm contracts are likely to be “a few months away”.
AngelLink has been formed to bring investors together with promising start-up companies in technology – including ICT – and life sciences on a nationwide basis. The venture grew out of WaikatoLink, the commercial arm of the University of Waikato, which will have a role managing the network and screening, monitoring and incubating ventures.
Unlike WaikatoLink, AngelLink will operate nationally, giving it access to larger funding and avoiding overlap between projects.
“There have always been investors — individuals or small groups,” says de Boer. “Around the world, particularly in the US, you have more formal angel networks and those started on a regional basis.” We have regional networks in several parts of NZ. “It’s a logical place to start; but there are a limited number of investments and funds in any particular region.
“It is key for any fund to have the capacity for a continued investment process, so it became clear to us that we needed a national network, with the clear objective of encouraging co-investment by other angel network groups. We will happily co-invest with Angel HQ in Wellington, with IceAngels in Auckland and so on.”
AngelLink’s members include some of the country’s leading biotechnology and high technology investors - prominent technology investor Neville Jordan; angel investment company Movac, an early investor in TradeMe; investment fund K1W1; and Sparkbox, an ICT angel investor.
The venture has been kicked off with up to $4 million (depending on investment opportunities) from the Crown-owned NZ Venture Investment Fund (NZVIF) through its Seed Co-Investment Fund. That sum will be matched by AngelLink investors, with the option for them to add more, says de Boer.
The focus is on “revolutionary” developments that start a completely new area of industry, rather than “evolutionary” projects building on an existing industry, says WaikatoLink CEO Mark Stuart. AngelLink specifically seeks research-based startups.
Lack of broad-based collaboration can kill projects even if they have good commercial potential, he says. “One of the first projects I worked on at WaikatoLink was an exciting biotech project. We kept a low profile. Limited resources meant progress on the science and commercial development was slow. When we were eventually ready to seek investment, we found another university and a Crown Research Institute had both been working on similar projects and had been similarly constrained.”
There was not enough resource to develop any of the single-point products into a platform technology.
“The lights went out on all three programmes,” Stuart says. Overseas companies now dominate that field.
“We can only imagine how different things would have been if we’d been able to pool our resources and commercialise it effectively."