Bridget Liddell was one of the featured overseas speakers at the Angel Association Summit held earlier this month. She is the Chairperson of New Zealand Trade and Enterprise’s US Beachheads Programme, a director of the Kiwi Expat Association, and a director of BioVittoria who are currently undergoing an IPO on the NZX. But her main line of work is as Managing Principal of New York City based Fahrenheit Ventures, where her job is providing leadership to companies seeking to successfully commercialise their products and services in the U.S. Market, specialising in strategic innovation, branding and marketing strategies and in the development and implementation of US market entry strategies for high growth consumer products businesses.
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.
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.
The NZ Angel Association held its annual conference in Queenstown last week. It was a great chance to meet up with old friends, get the good goss on what’s going locally in other regions, and trade war stories hopefully learning to avoid painful mistakes others have made.
There were a few recurring themes from many of the talks:
It’s all about people. When you invest in a company, you’re investing in a combination of ideas, resources, capacity to execute, and people. Of these, by far the most important is the people.
Failure is a great teacher. We tend to underrate previous failure as an experience. No one starts a company with the intention of failing, but we should appreciate and seize the learning opportunities presenting by failure.
The Kiwi Diaspora is ready and willing to help. Kiwis are everywhere, and most of the overseas speakers with Kiwi connections laboured the point that the Kiwi Expat Association (KEA), NZTE and others are generous with their connections and networks. You’re silly not to use them.
Stephen Tindall was presented with an Archangel Award, recognising his contributions to the angel space.
It was announced that Colin McKinnon has taken on the position of Executive Director of the Angel Association. Given that he spends the rest of his time as the Executive Director of the NZ Venture Capital and Private Equity association, hopefully he’ll be able to encourage follow-on investment for successful early stage companies.
Some choice quotes from the summit:
Alan McConnon (Upstart Angels)
The rule of Five: It always takes five times longer, five times as much money, and yields one-fifth of the expected rewards.
The five P’s of due diligence: People, Punters, Portion, Profitability, and Plan.
A good idea is only 20-30% of the value of a company.
Sir Eion Edgar (Sinclair Investments Limited)
Never do anything you wouldn’t want to see on the front page of the papers.
My aim in life: To be sure that everyone owes me a favour
Jim Connor (Sand Hill Angels)
If you want a higher valuation, go get some customers
We love cheap penny-pinching entrepreneurs!
Don’t invest in R&D, only invest in execution.
Bridget Liddell (Fahrenheit Ventures)
NZ companies generally have surprisingly weak digital and internet marketing strategies
Large US companies have become incapable of growing, except by acquisition
All up, the summit was useful, although the ratio of angel investors to others was disappointingly low (my guess would be around the 50% mark); it would also be great to have more time to mingle in structured and unstructured settings. I might respectfully suggest that (for some people, anyway) lunchtime wine tastings are not the best way to get people to focus on key issues. That said, I’m glad I went and will be looking forward to next year’s summit.
The Angel Association AGM has been shifted in time and place on Wednesday 18 November at Minter Ellison Rudd Watts, 88 Shortland Street, Auckland. The agenda has expanded significantly as well, including consideration of applying to the Charities Commission for charitable status.
The Angel Association will be holding their second annual summit in Queenstown on 5 and 6 November.
Speakers include Stephen Tindall (K1W1), Eion Edgar (Forsyth Barr) and Alan McConnon (Aorangi Labs).
Last year’s summit was brilliant, with great presentations and unparalleled opportunities to network. Angel investing is all about building relationships and building the best teams to make your investments fly; you won’t find a better place to share knowledge and war stories with the great group of people that are New Zealand’s active angel investors.
To book your place, contact Anna Hamilton-Manns, or you can download the flyer for more information.
NZ Angels that were at last year’s NZ Angel Association Summit will remember Jordan Green, deputy chairman of the Australian Association of Angel Investors. Jordan recently appeared on the Frank Peters Show, a weekly-ish podcast with the strapline “Startup Stories in Angel Investment and Venture Capital”.
It’s interesting to listen to an American angel interviewing an Australian angel and triangulating our position here in New Zealand. Jordan puts in a plug for this yesr’s New Zealand Angel Summit. He also talks up New Zealand’s SCIF. It’s nice to get some external validation and buzz about what’s happening here.
Jordan also talks about
syndication in Australia and its development
problems in the Australian VC space
strategic exits
the importance of appearing to be a local company in the country in which you’re operating
We caught up with her last week in Wellington to talk about how the Association is going after nine months in action, and her plans for the future.
Key points:
The Association’s education programmes are going well
The angel clubs are in good health
2008 was slow with more follow-on deals than new investment
2009 is looking better, with more deals coming through
Syndication is a growing trend. In2006 36% of deals syndicated; this grew to 58% in 2008. Syndication is more likely to occur if investors have relationships with members of other clubs, and the Association is encouraging that.
To improve the angel scene, we need to increase the number of angel investors by encouraging others to get involved in angel investing, and encourage angels to improve skills through education.
The Association will be running 3-4 events per month, the highlight of which will be the Summit in Queenstown in November.
Angel investing is a portfolio game – spread your risk across a number of companies, and don’t put all your eggs into one basket.
The Angel Association (in conjunction with NZTE Escalator) is a running a basic training course called “The Power of Angel Investing” in Auckland, Hamilton, Wellington, Christchurch and Dunedin in February and March (see the course schedule for details). Based on the Angel Capital Education Foundation’s course of the same name, it promises to provide an overview of the angel investment process. The course is aimed at:
Successful entrepreneurs who have exited from their businesses and have an interest in staying involved in early stage companies.
High net-worth individuals with senior business experience who now have the time and interest in investing in early stage companies.
Angel investors who have done from one to three deals.
Community leaders and entrepreneurial support professionals who are interested in promoting angel investing in their communities.
It’s an all day course, and the cost is between $300-$400 depending on whether or not you’re a member of an associated angel club. It will be interesting to see whether the penny gap or time elasticity of demand (a whole day is a lot of time to be sitting in front of an instructor) effect attendance.