New angel investment network targets life sciences
Wellington, Tuesday 25 August, 2009 – A national angel investment network has been launched to back New Zealand high growth technology ventures, with an emphasis on life sciences, engineering and ICT. AngelLink aims to bring together active angel investors with a constant stream of high quality IP based deal flow, to facilitate early stage investment.
AngelLink’s members include some of the country’s leading biotechnology and high technology investors: Neville Jordan, a prominent science, technology and engineering investor; angel investment company Movac, an early investor in TradeMe; investment fund K1W1; and Sparkbox, an ICT angel investor.
AngelLink has partnered with the NZ Venture Investment Fund (NZVIF) through its Seed Co-Investment Fund. NZVIF will contribute up to $4 million which will be matched AngelLink. Follow on investments from the angel investors could also substantially increase the investment over the initial $8 million target.
AngelLink Chairman Chris de Boer says, “Angel investors are a vital source of early-stage financing for high-growth science and technology companies. We’re launching AngelLink at a time when access to capital is more important than ever. We can make a very real contribution to New Zealand by unleashing economic potential from high quality science and technology research.”
AngelLink’s formation was initiated by WaikatoLink, the commercial arm of the University of Waikato, which will have a role managing the network and screening, monitoring and incubating ventures.
WaikatoLink Chief Executive Mark Stuart says, “We need to take an NZ Inc approach if we want to achieve the scale required for the innovation ecosystem to deliver what it is truly capable of and to drive New Zealand’s success. AngelLink’s collaborative investment approach will draw on the success we’ve had with Unicom, the university commercialisation consortium we initiated for collaborative investing at the earlier pre seed investment stage. National collaboration is the best way to ensure the highest chance of success for ventures.”
AngelLink’s nationwide network and collaborative investment approach will allow a range of investors to participate in investment.
Greg Sitters from Sparkbox says, “AngelLink and Unicom provide deal flow for participating members. These initiatives represent one of the most organised and developed technology transfer collaborations between education, science and the investment industry. In practise we will see better structured, better organised, investment ready opportunities. We will be able to work quicker to turn around our investment decisions and support the company.”
“The benefits of AngelLink’s intentional co-investment strategy are clear cut. We are 10 – 20, 000 miles away from our markets. We need to get close to our markets as quickly as possible, and we’ll be able to do that by drawing on the experience of the group and tapping into existing networks. If we can shorten a venture’s time to market by 2 years through this collaborative approach it may be the difference required to achieve market success. We now plan on making at least 75% of our investments in collaboration with other investors to utilise capabilities of each group in an investment.”
David Beard a partner at Movac, another AngelLink member, reinforces this message, “AngelLink encourages co-investment among investment parties for the betterment of New Zealand and its structure fosters and supports this process. AngelLink represents the next step forward in angel investment as it exposes investors to more deal flow and better value propositions. Our investments stand the best chance to succeed when they have a good group around them to help them succeed – and this is not just about money, it’s about skills, experience and networks. Each party brings something unique to the table. Our last 4 deals were co-investments and we envisage AngelLink will facilitate better and across a wider set of investors than we currently deal with.”
To ensure a vibrant angel investment network, investors need to see regular high quality opportunities. For each investment one of the core experienced investors will act as lead creating opportunities for co-investment with a larger group.
Deal flow will come from a variety of sources across New Zealand including research institutions, universities, incubators, industry networks and professional networks, in order to offer angel members a diverse range of opportunities for investment.
“AngelLink’s strong focus on life sciences and nationwide coverage will see more early stage life science projects spun out of the lab into the market with benefits to all. Angel Investment is an important part of the investment landscape and one which NZBIO believes will be vital to the success of a mature New Zealand life science industry. We applaud the initiative and will be lending support through our network.” says Bronwyn Dilley, Chief Executive, NZBIO.
Companies seeking investment will be screened and taken through a proven stage gate decision process to validate their suitability for investment. The suitable investees will be mentored to prepare them for due diligence and presentation to potential angel investors. AngelLink’s rigorous pre investment due diligence will be matched by close engagement post investment. Each venture will be monitored and mentored to ensure visibility and planning for future investment rounds and syndication. WaikatoLink, with a strong track record in due diligence and investment performance, will play a key role in this process.
AngelLink will follow on from other collaborations to support commercialisation such as Unicom, the university commercialisation consortium comprising WaikatoLink, AUT University, Lincoln University and Canterbury University, which is supported by government pre seed funding.
Dr. Nigel Johnson, Director Research and Innovation, University of Canterbury says, “The Unicom collaboration has demonstrated value through pooling resources, networks, best practise, IP and experience across the group. Visibility at an early stage allows us to combine IP from the universities, if appropriate, and to tap into the skills of the group for commercialisation. This means we’re not duplicating effort and giving each venture the best chance of success. AngelLink continues this collaborative approach to investment.”
Dr. Kevin Pryor, Chief Executive, AUT Enterprises adds, “New Zealand is small and we have limited financial capital, human capital, and limited access to mentor programmes and in market advisors. The scale and increased activity we’ve achieved with Unicom has helped us attract a top calibre independent investment committee including Bill Day, Hon Ruth Richardson, and Professor Mark Ahn. This has lifted the level and quality of business planning and commercialisation processes and ensures ventures are prepared for angel investment through AngelLink. “
AngelLink aims to connect investees to the full continuum of funding through its lifecycle from science to market spanning proof of concept, angel investment, early stage venture capital, expansion stage venture capital, and public markets.
“At an industry level there is a real need to make some improvements to generate more economic benefit from life sciences and technology research. We need to start with the end in mind and bring the market in from the start. We need to encourage a co-ordinated approach and funding models that encourage collaboration rather than competition. AngelLink represents a step change in early stage company investment by formalising visibility to upcoming investment opportunities to all of the partners across the investment continuum”, says Mark Stuart.
Hon Dr Wayne Mapp, Minister for Research, Science and Technology adds, “The highest priority for the New Zealand Government is growth. Future opportunities will depend on innovation and entrepreneurship and much of this comes from fundamental science. AngelLink will connect research and investors with the intent of getting science to the marketplace. Our future prosperity depends on getting this right.”
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