July 2023 - Bay of Plenty Business News

8 BAY OF PLENTY BUSINESS NEWS July 2023
15 YEARS
OF ANGEL
INVESTING
Recently Enterprise Angels has
celebrated 15 years of angel investing.
Tauranga-based, it has become one
of New Zealand’s largest, most active,
and best resourced Angel networks.
15 years of investing
A founding pillar of the local startup ecosystem
2008
Founder Bill Murphy launches Western
Bay of Plenty Business Forum –
individuals investing according to own
interests and experience. Members: 18
2012
Stronger group collaboration
of due diligence, and growing
member numbers
2021
Scalable investor
management system, robust
processes, strong
team, experienced &
connected members
2013
Key business leaders join
group; depth and breadth of
experience within group
grows
Members: 80, FTEs: 1.5
2019
Third side-car fund launched
Nina becomes CEO
Bill launched Purpose Capital
Impact Fund ($20m)
2023
200+ members, 160 wholesale investors,
21 partners, 100+ investments
Investor portal
First ‘lead’ fund launched
Members: 207, FTEs: 6.3
YEARS OF PROGRESS
2014
Exceeds 100 members
and launches first fund
Waikato Chapter launched
2016
Second side-car fund
launched – increased
investment in local
startups
Enterprise Angels offers a unique
model of early stage investing in
New Zealand with a professional
management team, 20+ partner
organisations, 200+ Angel investors,
and 150 wholesale investors. To date it
has facilitated investment of more than
$65m in 107 New Zealand startups across
a variety of industries, supporting more
than 1600 jobs.
FOUNDING OF ENTERPRISE ANGELS
Enterprise Angels was founded by Bill
Murphy who launched the organisation in
2008, then named Western Bay of Plenty
Investors’ Forum (a bit of a mouthful).
“I originally started Enterprise Angels
to provide an avenue for startups to
successfully raise capital and get more
than just money. Back in the day, founders
came to me due to my involvement with
the local Economic Development Agency.
I realised we had to get a better system in
place; the only early-stage capital at the
time was found by contacting a local rich
guy… we’ve certainly come a long way. The
growth path of a startup can be affected
dramatically by having successful business
angels as investors. They connect founders
to potential clients, other investors, future
staff and more. They help guide founders
in areas that they have experience in either
informally or as a director, and sometimes
they just provide moral support.”
In 2019 Bill stepped down to lead the
Purpose Capital Impact Fund, and Nina Le
Lievre became the country’s first female
angel network Chief Executive. Nina had
been working alongside Bill at Enterprise
Angels for six years prior to this. Bill
continues to support Enterprise Angels in
a part-time capacity as Executive Chair.
PORTFOLIO OVERVIEW
The existing portfolio is impressive
with the majority of companies being in
high-growth mode. A number of these
portfolio companies are making a name
Nina Le Lievre, Chief Executive,
Enterprise Angels
for themselves the world over, such as
Fuel50, Spoke, Parrot Analytics, LawVu,
UBCO, FileInvite and Datagate Innovation.
Many have attracted significant further
investment from later stage investors
including both NZ and international
venture capital and private equity firms.
Understanding where and who the next
stage funders are for the companies is a
critical part of the equation. Companies
often need more than angel money to be
globally successful.
Most of the portfolio companies are
software (39%), hardware (26%), or agtech
(23%), with the majority being based in
Auckland (41%), Bay of Plenty (18%) and
Wellington (18%).
Since formation Enterprise Angels has
had 32 exits. 15 companies have provided
positive investment returns - 12 of these
were acquired or listed. Investors have
seen some very profitable returns from
portfolio companies: GreenButton,
SwipedOn, Volpara, Engender, Merlot Aero
and more recently Moxion. The IRRs range
from 24% with Merlot Aero to 194% with
SwipedOn.
As expected with the high-risk nature
of investing in startups, there have
been negative returns too. 17 portfolio
companies have failed for various reasons
– timing, capital, product, resourcing.
Something that’s never easy for investors,
or for founders. Enterprise Angels has used
these failures as learning opportunities
to detect potential problems earlier and
better support founders to grow.
TRAVERSING TURBULENT TIMES
Periods of economic uncertainty haven’t
stopped Enterprise Angels members
investing. They may be more vigilant
when undertaking due diligence,
however risks and challenges create
opportunities. Experience has shown that
good founders will thrive in environments
where mediocre ones fail. Recessions
help clear the market of poor performers
leaving more market share for the best
companies. Many great companies have
grown in uncertain times – think AirBNB,
Uber, Slack, Square and Glassdoor.
With their strong member network
Nina believes Enterprise Angels is well
positioned to face the current economic
downturn.
“We need to continue to look to the
fundamentals and value proposition of
the opportunities that we consider. We’ve
honed this over the last few years and
believe that there will be some very good
opportunities in these challenging times.
These companies (as well as existing
portfolio companies) will continue to
need our support to grow. It’s not just
capital (although that does help a lot), but
connections and expertise are increasingly
important when navigating turbulent
environments. “
FUTURE OPPORTUNITIES
Enterprise Angels success has come
from combining the strengths of its
Angel network (members’ breadth and
depth of experience and expertise) with
the strengths of a fund (coordinating and
streamlining the investment decision
process) to attract better deals and deliver
a better result for investee companies
and investors. EA Fund 1, 2 and 3 are fully
invested and Enterprise Angels continues
to provide this important funding option
for entrepreneurs and investors with the
recently launched EA Fund 4.
EA Fund 4 is like previous Enterprise
Angels funds in many ways, but the key
differentiator is that it is not a ‘side-car
fund’, meaning it can invest independently
of the angel group, undertaking due
diligence and accessing deals from a
broader range of sources providing greater
diversification for investors and a more
streamlined process for startups. The
Fund’s managers are aiming to raise $5
million with a maximum of $10 million. Le
Lievre has designed the fund to leverage
the organisation’s years of experience
in investing and to support the need for
quality deals for the numerous Venture
Capital funds that have formed in recent
years subsequent to the Government’s
$300m Fund of Funds programme to
invest in high growth NZ companies as
they grow to Series A and beyond.
“We’ve received strong support from
those who know us best, members and
existing limited partners, having achieved
our ‘first close’ exceeding $2m. Almost
a quarter of this investment has come
from the EA GP Board and Investment
Committee showing their strong belief
and commitment in the new fund model,”
said Le Lievre.
Despite the current economic
uncertainty Le Lievre is confident now
is good time to be investing in startups.
“We are seeing good value investment
opportunities into well performing
companies at valuations that could only be
dreamed of 12 months ago.”
Angel investing is risky, however EA
Fund 4 provides an avenue for wholesale
investors to greatly mitigate this risk by
efficiently (time and money) building a
portfolio of early-stage investments with a
proven fund manager.
For more information www.enterprise
angels.co.nz/project/ea-fund-4/
An opportunity to diversify
your investment portfolio
If you are interested in investing in this exciting asset class and help form and grow
some of NZ’s most innovative companies, we invite you to be part of EA Fund 4.
To find out more about this fund and unlocking a portfolio of up to 35 innovative
NZ companies, indicate your interest on the link below or call 07 571 2520.
https://www.enterpriseangels.co.nz/project/ea-fund-4/