In the same week that the Punakaiki Fund was abandoned, came a much less heralded, but much more important deal for NZ Inc.
Wellington-based Endeavour Capital is, in the New Zealand sense, a veteran in the early stage and startup investment stakes.
But its new fund is quite different, and promises to help solve the ongoing challenge of capital growth for Kiwi companies, without them having to relocate offshore to follow the money.
It is also a way to get over the ‘valley of death’ funding dilemma for innovative early stage companies – those that have received a million or two in initial capital, but need say another $10 million to push on with R&D and marketing and distribution to globally scale up to the next level of growth.
This type of capital requirement is beyond local angel investors or even NZ-based venture capital sources.
Endeavour’s new $200 million fund is provided by mostly offshore investors, from networks already established in Asia, the USA and the Gulf States.
A recent interview with UniServices CEO Andy Shenk emphasised the importance of ‘capital of the right kind’ for new company growth.
The right kind of capital comes with advice, connections and new ideas.
Now, the successful applicants to the new Endeavour Capital fund will have to demonstrate they have proven management teams, and offer products or services that can link into the international distribution networks that are virtually attached to the fund.
However, given that the investors have a vested interest in their NZ-oriented investments making good, the ability for new Kiwi products (with global aspirations) to seamlessly link into those networks will be priceless. This will be capital of the right kind as Shenk (himself an ex-pat American) extols.
Just as importantly, it will provide a better chance of New Zealand companies being able to remain located here, and to attract and retain talent, here.
Perhaps we shouldn’t be surprised that the new fund hasn’t received that much media attention. It isn’t necessarily a stealth revelation, but certainly it is quietly underplayed.
For those local companies looking to ramp up through new capital though, the new fund will certainly be dead-centre on their radars.
And best of all, it doesn’t just come with money, it also comes with considerable knowhow.
P.S. – It would’ve been good from a stimulating interest in high-tech POV if The Punakaiki Fund had got off the ground. I like the no sour grapes attitude of its promoter/founder Lance Wiggs in a blog here and here.