Wellington
We shouldn’t be too surprised that the latest figures released on the
After all, there’s only so much ‘spare’ money that Angels have to punt on such investments,where only one or two out of 10 will (historically) be screamingly successful.
The Angel community , of which it is estimatedthere are about 200 individuals spread throughout New Zealand, has tapped into a large number ofKiwis who are prepared to back new business growth.
The community’s actively looking for new members, but in the meantime original Angel investorsare waiting for payback from the (to date from 2006) 407 deals that have been done. Of the currentAngel crop, till they get some returns, they’re necessarily tightening their belts a bit.
Hence, as noted in YCF, the average size of first up deals has fallen, and there’s anincreasing amount of follow-on investment also taking place. The second half of 2011 saw just over$13 million invested in 44 deals, while almost $31m was invested in 97 deals across the entire year.The average deal size was $323,549, down from $540,000 in 2006 when the index kicked off.
Angels clearly prefer web company oriented investments, followed by technology hardware andequipment, then biotech and life-sciences. (See Angel press release
There’s a good reason for the IT bias. Based in a corner of the south-west Pacific, thingswebby are the most scalable, and tend not to be as capital intensive. By the same token they’re anall or nothing investment, with no residual asset such as plant, machinery, drugs or IP if things gobelly-up.
The web’s all in the ether, and when it doesn’t work, an Angel investor (and the founders forthat matter) have blown everything.
Given the activity of Angels, it’s amazing to consider that they’ve only been going in NZ forfive years. It would be shuddering to think of where or how innovative business founders wouldobtain investment capital without their presence. Part proof of that was
So, imagine an environment without Angels – hardly bears thinking about.