NZ V.C. industry needs more money
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From what I gather, the NZ Venture Investment Fund needs more capital input to be able to continue backing seed and start up companies.
It hasn't (yet) made enough of a return on its investments to start pumping that money into new ventures.
As NZVIF chief executive Franceska Banga says, "we do need to see new venture capital funds emerging if young technology companies are going to consistently have access to New Zealand investment capital."
Of course even as New Zealand's angel investment scene grows ever stronger, along with the rest of the world everyone's seeing a shortage of venture capital funds.
In spite of a so-called shortage of fund though, last year America achieved the following:
Venture capital firms invested US$21.8 billion in 3,277 companies in 2010. Angel investors ponyed up another US$16-$20 billion in over 50,000 early stage start-ups.
In comparison, since its establishment in 2002, NZVIF has invested NZ$123 million into 100 seed and start up companies, and combined with private investment, these 100 companies have received $308 million in funding.
NZVIF gave an interesting breakdown on some of these investments.
- 79 are exporting
- 29 have received investment from offshore investors
- 23 emerged from either universities or CRIs and 19 have been part of business incubators
- Auckland has 53 of the companies, Christchurch 16
- 9 have been sold and 7 written off or liquidated
- 28 of the investments were into seed stage enterprises, 56 were into start-up companies, 15 into early expansion companies and 1 company is at the expansion stage
Banga makes the point that typically the companies have developed new technologies, backed by patents, which gives them a distinctive niche into high value international markets.
Key traits are an export focus, high growth and high productivity in sectors such as software and internet, agricultural technologies, medical devices, niche manufacturing and biotechnology.
"If New Zealand was able to ramp up the formation and growth of new companies in high value industries, and if only 10 to 20 percent of those companies were to realise their full potential exporting high value goods and services around the world, this would have a considerable impact on New Zealand's future economic prosperity," Banga says.