Business Week published an interesting article on “Super Angels” – small firms unfettered by the corporate machinery of the bigger VC firms, and focussing on larger-percentage stakes in smaller seed-stage investments, launching startups for “only” $1M.

From time to time I refer to New Zealand as “honey I shrunk the country”, and so even though the scales at play in the US are different from here by orders of magnitude, we still have the “super angel” phenomenon, although we’ve approached it from the other direction.

With the flight of VC cash from the NZ market, players like Movac and Sparkbox have moved up the food chain from where they started.  And it makes good sense, as the single-digit-millions (NZD) funding rounds, otherwise known as the “valley of death”, have been harder and harder to achieve from VC’s in the last couple of years.

The other key difference between NZ’s super angels and the microcap type funds covered in Business Week is that the NZ firms are true angels – they’re playing with their own money, unlike traditional VC’s who are typically playing with institutional cash.

I like to think that our model is better than their model for purely parochial reasons, and that the choices made by people with 100% of their own skin in the game will be more sensible. But we still have the basic problem in New Zealand that we find it tremendously difficult to scale our companies into international enterprises. And the main issue with that comes back to scale – “honey I shrunk the country”.  It isn’t cheap to go offshore, and that’s where we need the supersize resources available in larger economies to make it happen.

But we can have a blended model (seed capital from NZ and expansion capital from offshore), and that’s what most entrepreneurs strive for.