SCIF provides a longer runway of capital for ventures, thereby improving the prospects of success. The SCIF programme should make money for the Crown commensurate with the investment risk, not lose it. If a company invested into goes belly-up, the angels and NZVIF lose their money. Angel investors put in their own capital.
It is a co-investment programme which seeks to make a return similar to that of the early stage investment specialists it partners with. Some question why the government is involved with angel investing. If SCIF is abandoned, we would undoubtedly still make progress, but the industry's development will be much slower - as it is in Australia, whose angels enviously wish their government would introduce a similar scheme. I hope we will have a 1000-plus angel investors linked to 20 to 25 angel groups collectively investing over $100 million a year. If the growth we have seen in angel investing continues on its current trajectory, then in another decade the sector should be self-sustaining. This increases the chances those start-ups have of surviving, accelerating to gain traction in global markets and, perhaps, becoming our next Mesynthes, Booktrack or Xero. What the SCIF programme does, by co-investing alongside angel investors who are also committing capital, is it increases the pool of capital. Many start-ups fail, not because they were a bad idea or poorly executed, but simply because they didn't have enough cash to survive through to the next investment round, let alone break-even. Capital is the fuel that keeps early stage companies going and enables them to accelerate quickly to capture a market opportunity. Lack of capital remains a major constraint on start-up businesses.
#SPARKBOX COUPOM PROFESSIONAL#
But if the government considers that professional angel investing is a valuable component in our capital markets, it should approve SCIF mark two.
No programme of this nature is perfect and can always be improved (speed of approvals and flexibility of terms, for example). The government is currently reviewing SCIF and considering whether to commit another chunk of capital to keep the programme going and growing. There are a number of reasons why, but an important one is the SCIF programme run by the New Zealand Venture Investment Fund, which co-invests alongside 4 angel groups. Around $50 million a year is being invested by formal angel networks, with probably as much again by angels outside these groups. Successful business people and entrepreneurs are joining, investing in and mentoring new companies. There are now around 15 active angel groups. Now the Angel Association of New Zealand has active members all over the country. It was a niche area and the concept of angel investing was largely unknown. Ice Angels, now New Zealand's largest angel network group, didn't start until 2003. Stephen Tindall's prolific K1W1 vehicle was active. In 2001, when Sparkbox Ventures was starting out, there were scarcely any other groups on the scene. Angel investing has gone from pretty much nothing to a decent niche in our capital markets over the past decade.
0 kommentar(er)
