The world now glories in dozens of would-be Silicon Valleys: Silicon Alley in New York, Silicon Glen in Scotland and even, depressingly, Silicon Roundabout in London.

So far so good … Silicon Welly escaped their attention!  They continue,

Siliconitis is the most common example of what is now an almost universal search among policymakers, local as well as central, for the secrets of entrepreneurial success. It is also the most instructive. A few attempts to replicate Silicon Valley, most notably in Israel, have succeeded. But most are embarrassing failures.

One of the big problems is that “you can build as many incubators as you like, but if only 3% of the population want to be entrepreneurs, as in Finland, you will have trouble creating an entrepreneurial economy.”  So true.  In order to foster entrepreneurial behaviour, they say, we need to have vibrant higher education institutions and be open to outsiders.  I believe that as a country we only really scoring “achieved” on these counts, rather than “merit” or “excellence”.

The article does praise New Zealand though:

New Zealand, despite its geographical isolation, has turned itself into an entrepreneurial powerhouse, leading the world in the creation of small and medium-sized enterprises, thanks in part to enlightened government policies. It has done particularly well with applying innovation to woollen underwear. Its Icebreaker brand is popular with young, image-conscious outdoor enthusiasts.

All I can say is that from perspective of the rest of the world, I hope we can break out of the underwear drawer eventually.  And that our enlightened government policies eventually bootstrap the rest of the ecosystem into investing in, valuing, and taking risks on innovation.

HT: @gnat

The overall aim of this Forum is to establish and leverage effective long-term cooperation between Chinese and New Zealand business leaders and high-level government officials. The visiting Chinese entrepreneurs and investors have also expressed interest in exploring commercial opportunities in New Zealand as well as to understand New Zealand’s approach to sustainable development.

The organisers have managed to secure the attendance of approximately 50 senior business and government leaders from China to attend this Forum.  Key Chinese leaders confirmed attending include:

• Wang Shi, the Godfather of Chinese real estate, Chairman of Vanke, with market capitalisation over US$10b, the largest property developer in China;
• Feng Lun, Founder and Chairman of Beijing Vantone Group, significant property developer with market capitalisation over US$1b;
• Xia Gang, President of China International Industry and Commerce Company, significant commercial property developer;
• Zhou Qing Zhi, Chairman of Nandu Holdings, investor, philanthropist;
• Wu Xu, President of Chongqing Sincere Holdings, with interests in property and finance;
• Li Ai-Jun, Chairman, Taoyuan Habitat Group, property developer and investor, philanthropist;
• Meng Gang , Chairman of National Chiao Tung University Real Estate Group, City Union’s rotating presidency;
• Government delegations from Xia Men City in Fujian Province, Chang Xing County in Zhejiang Province, Zhu Jia Jiao Town in Shanghai City, Wu Jin District in Jiangsu Province.

On the New Zealand side, the organisers are expecting a number of senior Government ministers and mayors to be in attendance, in addition to business leaders representing a variety of business to attend.

At this Forum, participants will have unparalleled access to some of the top investors and decision makers in the booming Chinese real estate and investment sectors.

At a glance:

What: International Sustainable Cities Forum
Where: Langham Hotel, Auckland
When: 8am-5pm, Thursday, 30 November

Why attend:

• Unparalleled access to key investors and decisions makers
• Understand economic and political developments in China
• Obtain analysis of China’s future trends and the implications for your business
• Hear the latest updates from successful Chinese corporate and government leaders
• Appreciate Chinese culture and the business of relationships
• Fast track your China ambitions by connecting with China and NZ-based Chinese businesspeople
• Know how to deal with Chinese businesspeople and government officials

Who should attend:

• CEOs / Directors / Business owners who want to explore opportunities in China
• Business development professionals in the property/construction/engineering / design sectors
• Businesspeople who want to understand the mindset of Chinese investors and entrepreneurs
• Businesspeople who want to sell products / services to Chinese firms and need information/ networks
• Management teams seeking investors with capital and connections in China
• Professionals who can contribute expertise towards building sustainable cities
• Government officials desiring to strengthen connections with Chinese government officials

The organisers are anticipating a balanced crowd of approximately 25% Chinese, 25% Chinese New Zealanders and 50% other New Zealanders. This would enable good networking as we expect that attendees will not be at a forum where participants already know one another.

Limited tickets available. Check out: www.sustainablecities.co.nz

For more information please contact:
Kenneth Leong,
Director, Euroasia
09-3040100

• eBUS (Advertising/Media collaboration)
• Mindscape (Application development tools)
• PocketSmith (Personal finance forecasting)
• Celsias (Climate change portal)
• OffTheBack (E-tail)
• Bookhabit (E-books)
• endemicworld (Online design store)
• Polar Bear Farm (iPhone application development)
• Koordinates (GIS)
• Unimarket (SaaS E-procurement)

It’s nice to see local companies getting recognition for their hard work in an challenging environment!  Many of these companies are backed by angel investment, including Bookhabit and Celsias in which which I have indirect interests.  Go Team!

According to the numbers, the walk has been a relatively pleasant one amidst considerable turbulence, although the outlook is uncertain.  The good news is that the aggregate value of their investments has increased by $3.42M, compared to the SOI forecast of $1.67M.  Given that at the end of the day valuations are very subjective, this might or might not mean much, but it’s nice to see it written on paper.  After all, this is the NZ Government speaking, not Enron.

Other items that leaped off the page:

With respect to VIF,

• They haven’t invested in any new VIF funds in the last 12 months, and are now willing to talk to anyone about potential fund investment at any time without a rigorous EOI process.
• VIF-backed funds made eight new investments in the last 12 months.
• Most of the existing funds are now nearly fully invested; only two funds are seeking new invesment opportunities.
• Software and biotech combined account for 50% of the invested capital.
• To date, a total of $175M of combined NZVIF and private capital has been invested in 45 different portfolio companies.

SCIF has been an area of activity and growth, and this is really positive for the angel space:

• There are now eight SCIF partners, compared to four at the beginning of the year
• NZVIF’s focus for the next year is growing the number of angel investment partners and investments
• SCIF invested $5M between 18 investments (that’s an average of $277K per investment by SCIF)

So, all up it’s quite a good story for the low-end, but shows signs of coming trouble at the top.  Given current economic conditions, without NZVIF-backed funds sloshing more cash around in the VC-space, will there be enough expansion funding to get NZ companies offshore?  It looks like we’ll have to rely increasingly on organic growth, outstanding value propositions, private equity, and overseas sourced capital.  C’est la vie – let’s keep growing our Angel-backed businesses, so that when the market turns we’ll be ready for prime time.

Angel Association chair Andy Hamilton said cooperation agreements have been signed with the Australian Association of Angel Investors, the European Business Angel Network, and the United States Angel Capital Association.

“The objective with signing these agreements with Australia, US and Europe is threefold. It will promote relationship exchanges. It will promote best practice exchanges. And it will aid our kiwi companies entering foreign markets and getting finance in those markets.

“Angel investing has become a significant asset class in its own right since the year 2000. By building international linkages, angel groups in New Zealand can benefit from the worldwide growth in angel investment.

“Since 2005, we have seen considerable growth in syndication of angel deals between angel groups in countries. Now, we are starting to see syndication occurring across country borders.

“For a young New Zealand company looking to expand to, for example, the US, having a US angel investor alongside some New Zealand angels could help greatly in terms of that company’s knowledge and understanding of the US market. Syndication also greatly expands the potential  capital available.

“We are already seeing international interest in our growing angel community. Representatives from three Australian angel groups will be attending the Angel Summit in early November in Auckland. We hope that Kiwi angels will be attending US and European angel conferences next year.

“We are also look at building links with the Asian region. Further, moves are underway to establish the World Business Angels Association, of which we will be one of the founders,” Andy Hamilton said.

Boris writes a great blog on the Vancouver startup scene, and has been working to try to increase international cooperation and information sharing to help maximise the chances of success for startups.

Watch the interview:

[youtube=http://www.youtube.com/watch?v=BJbkDr_-ND8]

Disclosure: I’m the Chairman of Webfund. Go Stefan!

NZ’s Angel Industry Flourishes describes NZVIF’s quest to increase the pool of angel investors in NZ. Franceska Banga: “Finding 1000 angels is about deepening the number of angels that are active, and in particular drawing them into formalised networks, as well as encouraging new investors. There are some big pools of cash sitting around New Zealand looking for a home.”

Nothing Ventured begins (perhaps unfairly) with Jenny Morel describing the current state of the VC industry in NZ as “dire” citing the lack of institutional investors; K1W1’s Brian Mayo-Smith chimes in that the $150M they’ve invested is “a bit of a drop in the bucket” compared with what’s needed. Banga again: “The message from the Australian market to our institutions is: ‘Just get started. Stop mucking around and just start.’ Because until they actually bite the bullet and get engaged, they won’t know what they don’t know. It’s just conservatism at the moment.”

Who’s Who in the NZ VC Industry provides profiles of some of the key players. I was left scratching my head though at the journo Karyn Scherer’s opening line that “the purpose of venture capital funds is to give large loans to tiny businesses” … I think Karyn needs to do a little more research into the difference between debt and equity finance.

Computerworld also ran an article last week, Start-ups warned of VC funding pitfalls. Tony Crewdson, the former director of the INCIS project, suggests that entrepreneurs avoid external funding altogether as it “can distract you from your business, and it can also make you create a business you didn’t want.” Unfortunately for those individualists out there, in my experience, most great ideas require more capital to get off the ground than can be funded by organic cash flow. My unsolicited advice to budding entrepreneurs: If you’re planning on building a wildly successful business, you are almost certainly going to require external funding to get offshore. Sure, go in with your eyes open, but start seeking investment well before you need it.

Listen to (or download) Colin’s show (but note that Radio NZ have edited out Doug’s “strong language” in the interview):