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.

Idealog Magazine this month provides an entrepreneur’s perspective on VC and angel investment, headlining with “New Zealand venture capital desperately needs a hit—an investment that pays back, big time. Without it, our venture capitalists struggle to fund creative Kiwi companies. Mike Booker discovers why we’re sadly used to hearing ‘no’”.

Um.  Guys, we need more than one hit … otherwise we start looking like the NZ cricket team from the 1980’s – you know, Richard Hadlee and Everyone Else.

The article describes the bind that VC firms are in since the original NZVIF series A funds were fully committed, and the implications of the dearth of local institutional investment.

NZVCA’s Colin McKinnon is right on the money, when he asserts

… the most important ingredient for the future health of the VC industry in New Zealand will be its people.  The industry needs funds managers who will inspire investor confidence through the quality of their investment choices and ability to nurture young companies through to a successful exit from their funds. These managers should be part of a vibrant network that includes capital markets, serial entrepreneurs, serial institutional investors and a financially literate public.

The industry is improving, albeit slowly, but that’s only natural given the level of resources at New Zealand’s disposal.  Our investment ecosystem is developing, both in breadth and depth, as well as connectedness and transparency.  So good on Idealog and its interviewees for being so open about the state of play.

But don’t take it from me, read the full Idealog article …

Colin McKinnon was interviewed in today’s Herald, plugging the NZVCA’s new book, “Fuel for your Business”.

The book is “… aimed at young, early stage New Zealand companies looking for funding to help them grow, and focuses on attracting ‘rocket fuel’ or angel and venture capital investment.”

Colin says that he hopes the book will prompt prospective investors to approach the venture capital association.  He continues, “Angels are more informal, philanthropic and are more about being involved in a community of common interest. Venture capital is professional, about fund management and about having a good track record so it can attract more people to the fund.”

I can’t say I’ve ever met an angel investor who thought they were being philanthropic by investing!  And we might even eventually forgive the Herald for showing a picture of Colin against a map of the world that excludes New Zealand, worthy of NZEDGE’s now-defunct collection.

I look forward to reading the book once it hits the shops, and will enjoy Colin’s take on the debate on “Why VC’s and Angels Must be Wed Locked” at the upcoming inaugural Angel Association summit.  The love’s gotta flow in both directions, sweetie!