When: Tuesday 16th Feb, 5.30-7.30pm
Where: Russell McVeagh, Level 24, Vodafone on the Park.

We look seeing you there, where you’ll have the opportunity to talk with Kevin and network with your Wellington peers.

Simon Telfer, co-founder of SpringBoard’s national group, who will talk more about SpringBoard and governance.

For more info and to RSVP, see the Springboard Wellington LinkedIn Group.

Related posts:

1. Springboard comes to Wellington
2. Springboard event: Governance – handbrake or accelerator?
3. Startup Governance

When: Tuesday 9 March 2010 5:30pm – 7:30pm
Where: Deloittes 10 Brandon Street, Wellington
RSVP: Unlimited Potential
Special Guest: Bill Payne

I always advise entrepreneurs to get to know their local angels well in advance of even thinking about asking them to invest.  This evening will be a perfect opportunity to network, practice some lines before using them in a pitch, and meet other entrepreneurs and investors.

See you there!

Related posts:

1. Damsel’s Den: the angels pitch to entrepreneurs
2. Bill Reichert’s new rules for entrepreneurs and investors
3. W2W – Wellington to the World 2009

The Pitch:

On YouTellYou, anyone can create and publish a photo-story in minutes linking to their Flickr, Facebook or Smugmug account or uploading the photos from a their computer. The stories are presented in an online magazine, according to number of views, ranking, category, publishing date.

YouTellYou is NOT another photo hosting service: the emphasis is creating and sharing our stories via our pictures. The YouTellYou target author is someone that is willing to share information and is looking for a large audience.
YouTellYou aims are to be easy and quick for the authors, elegant and easily navigable and searchable for the readers.

The possibility are endless: travel diaries, breaking news, family events, sport events, nature photography etc.
YouTellYou offers a publishing platform to the reporter that hides in all of us.

Accomplishments to date:

Live since Jan 6, 2010

Reviewed by:

• ReadWriteWeb
• University of Missouri
• KillerStartups
• Makeuseof
• Startupmeme
• Blogs in USA, France, Holland, Germany, Brazil, Spain, Japan, Italy

Development plans:

YouTellYou needs 2 developers to make the website secure and scalable, 1 designer to make it gorgeous and 1 internet marketer to spread the word and get traction, readers and authors.

Key Challenges:

• Spread the word and make the website go viral
• Build a smartphone interface to allow people to post stories “on the go” with audio comments

Principals & Previous Experience:

Ruggero Domenichini, Senior Business Analyst and Project Manager, Italian by birth, in New Zealand since 1996 (citizen since 1999)

What they want from an investor:

~ NZD 300,000 to fund development and staff over the next year, with significant business mentoring to produce a business strategy for the next stage.

Dave’s commentary:

Ruggero Domenichini, the founder of YouTellYou seems an energetic and passionate man with plenty of real-world experience in IT and creative flair.  Like many start-up founders, he’s developed his product to the beta launch and now need to build a team to turn his product into a company, as well as cash to make it happen.

Contact details:

Ruggero Domenichini (founder)
email: rujero@youtellyou.com
mob: +64 21 683305
skype: ruggero.domenichini

Note: If you plan to act on any information on this site, please be sure to read the disclaimer.

Thanks to BNZ, the Foundation for Research, Science and Technology, The ICEHOUSE, and many other organisations, Bill will be spending six months here in New Zealand as the BNZ University of Auckland Business School Entrepreneur-in-Residence at The ICEHOUSE, working on a variety of projects including running seminars for angel investors, mentoring startups, providing advice to government, working with tertiary education institutions on commercialising their intellectual property, and hopefully building some international syndication opportunities.

He has a busy schedule and will be visiting many regional centres round the country, but is keen to meet with a wide variety of people while he’s here.  Bill is a very personable, approachable, and straight-talking guy, and we caught up with him over a Skype call to find out more about how we can get the most out of him while he’s here.

In the podcast, Bill talks about his own investment interests, how to put together a deal that satisfies everyone, how the “first-to-market advantage” is vastly overrated, and obtaining follow-on investment offshore.

You can download or listen to the podcast:

You can contact bill directly on bill@billpayne.com, and you might also be interested in Bill’s ICEHOUSE blog.

Related posts:

1. Bill Reichert’s new rules for entrepreneurs and investors

Halo Investment Management chairman John McDonald said the fund received strong interest from investors but the investment climate meant it received commitments of $2 million.

“The concept was extremely well received, but unfortunately, in the current environment, we were not able to translate that into sufficient firm commitments to proceed with the Fund.

“There was considerable interest from investors in gaining access to the companies in the angel and venture capital pipeline. We will look at some redesign of the fund and then consider re-launching it, possibly next year, when investment conditions improve.

The Halo Fund was aimed at investors interested in partnering with New Zealand’s most experienced angel investors to invest in new technology, high growth companies in dynamic sectors.

It aimed to invest into 30 plus companies over a two to three year period at the seed and start-up phase in sectors like software, bio-technology, and medical diagnostics.

Related posts:

1. Trans Tasman Commercialisation Fund signs on as SCIF partner
2. Trans Tasman Commercialisation Fund to invest in Saratan

In its 2009 annual report, NZVIF posted a net surplus of $3 million and completed 50 investment transactions totalling $18.7 million- a record level despite the demanding investment environment. Over $80m of private capital was raised alongside this.

NZVIF chief executive Franceska Banga said the better than expected result – it had forecast a deficit of $3.4 million – was due to a combination of investment realisations and improvements in the holding value of investments.

“It is still early days for our venture capital funds and the development of the industry, but the year saw encouraging progress. We have equity interests in 81 New Zealand companies in sectors such as ICT, pharmaceuticals, biotechnology, life sciences, and telecommunications. Across NZVIF’s portfolio, there is good revenue growth and, consequently, the combined value of those companies is rising.

“The business environment is, however, tough and venture capital market faces major challenges – particularly when it comes to raising new funds. Individual investors are waiting out the recession and are reluctant to commit money to new ventures before seeing a return on existing investments. Meanwhile, institutional investors remain on the sidelines.

“It has been pleasing to observe the seed investment sector’s continuing growth. Across the total sector, angel investors invested a record $30 million into young New Zealand companies over the first six months of 2009, taking the amount invested over the past three-and-a-half years to over $100 million.”

Put simply, Bridget is passionate about helping successful companies, and especially Kiwi companies, enter the US market through creating killer strategies and applying the relevant networks.

At the Angel Summit, Bridget raised a number of important points that I thought were worth following up and sharing with the community. I caught up with her last week, and began by asking her why she thought that many US companies find it difficult to grow except through acquisition, and where the opportunities lay for New Zealand companies building themselves for strategic trade sale to a US major.

Listen to or download the podcast:

Key points:

• It’s difficult for US companies to grow except by acquisition, especially in areas where they have existing underperforming brands.
• NZ companies have a great degree of innovation and lateral thinking. We have along history of innovation in Food and Beverage, emerging capability in bioactives and related fields, and a strong presence in textile and clothing. These can be very complementary to a portfolio that a US major might already have.
• Preparation for a strategic acquisition requires years of planning, including type of product, type of packaging, distribution strategy, pricing structure, partnership relationships. Start with the end objective and work backwards, leaving nothing to chance. Plan out the people involved, advisers that you use, legal structure, domicile, who you employ etc.
• The Beachheads programme is available to help out with strategy formation, and can recommend advisers in the US across a wide range of industries.
• It’s important to take into account the voice of the marketplace before leaving New Zealand. Companies are often optimised for the New Zealand market, and that may or may not work in other markets. It’s important to undertake research before you enter the market. Using the Internet for international marketing prior to going overseas and getting information about the market you want to enter is low cost, but high value. Product, packaging, messaging, pricing all need to be considered – are they appropriate for the market? NZ companies need to be open minded and consider that what worked in Australia or New Zealand may not work in the USA or Europe.

Related posts:

1. Do you have what it takes to be a startup CEO?

They haven’t published my take on factors that affect valuation online, so I’ll take the liberty of reproducing them here.

Valuations are very subjective, and it takes someone with significant domain expertise to even hazard a guess. That’s one of the reasons that angels like to syndicate deals – nobody is an expert in every domain.

Factors that effect valuation include:

• Team: Track record (both success and failure), commitment, passion, ethics
• Financials: Realistic cash flow forecasts, ability to do things on the cheap, and future capital requirements
• Product: Uniqueness, simplicity, how much pain it will alleviate
• Sexiness: How “hot” is the product and the space?
• Market: Size, addressability, familiarity
• Sales strategy: Customer acquisition cost/effort, ability to execute
• Business model: Rapid scalability, flexibility, operational complexity, robustness of assumptions
• Intellectual Property: Patents and other barriers to entry for potential competitors
• Competition: Can someone else easily squash your startup?
• Hygiene: Governance, tidy accounts, good legal agreements, no outstanding law suits or significant legal risks etc

One thing’s for sure: your company becomes a lot more valuable the day you sign on your first batch of significant customers, and is worth more again the day you become cash-flow positive.

It’s a surprise to many entrepreneurs that cash-in (ie, how much as been previously invested into the company) has little impact on an objective valuation – it’s a highly emotional issue that is often a real roadblock to doing a deal.

For a bit of fun, see Cayenne Consulting’s High Tech Valuation Estimator.

If you’re more serious about it, local companies like Valuecruncher provide reasonably priced objective valuations. The Angel Association / NZTE’s Escalator Service also does a great job of helping companies become investment ready, part of which is arriving at a valuation you’re comfortable with.

It’s a truism to say that your idea or company is only worth what someone is willing to pay for it.  Don’t fall down the hole of holding out for an impossibly high valuation, as the real value in a high-growth company is its ability to outstrip that initial valuation quickly.  Most investors will completely shut off when you give them a number that’s an order of magnitude out from what they think your company is really worth, and you may not get a second chance.

So instead of insisting that your company or idea is worth a lot more than your potential investor thinks it might be worth, ask what your investor can do to ensure that your company will have the resources and expertise it needs to realise its full potential.

Angel Association Chair Andrew Hamilton says the partnership is highly valuable for New Zealand as it will open up networks into South East Asia for our emerging global companies, both in terms of networks for investment and market access.

“With our trading links to South East Asia expanding with the signing of the free trade agreement with Asean, it is the right time to be expanding our investment links.

“Angel investment is a key asset class in economies, with European research showing that angel backed companies today, will represent 50% of the new jobs in 10 years time. The angel industry has developed significantly over the last few years world-wide and this partnership is further evidence of the growth of the industry.”

Joe Rouse, Director of Bansea, said: “We are delighted to form this relationship with New Zealand. We have seen a fantastic angel industry developed around the incubators and Universities in New Zealand and are looking forward to helping many of the companies funded from New Zealand using Singapore as a base to grow their Asian operations.”

Related posts:

1. Power of Angel Investing in Hamilton – 12 October

The last start-up IPOs in New Zealand were in the class of 2007 – Xero, Burgerfuel, and NZ Farming Systems Uruguay; I’d argue that Burgerfuel probably didn’t belong in that class, and that NZFSU was more of a property play than an intellectual property play. Xero is the standout, and have deservedly done well after a hard slog.

Biovittoria’s IPO offers angel investors a lot of hope that it’s still possible to take great ideas through the investment cycle and come out the other end as a listed company.  With backing by Endeavour Capital, ACC, Stephen Tindall’s K1W1 and the NZ Venture Investment Fund (NZVIF) they’ve managed to bring their product to the point where it’s ready for true international expansion.

Biovittoria appear to be in a great position to exploit their market, with exclusive rights the key ingredient in their PureLo artificial sweetener product. PureLo was the first natural sweetener of its type to achieve United States Food and Drug Administration (FDA) regulatory compliance through its Generally Recognised As Safe (GRAS) status.  They expect full FDA approval in February next year.  The global artificial sweetener market is worth over USD 3.5 Billion.