Christmas angels sought for fledgling ventures

Franceska Banga

Franceska Banga has up to $40 million of Government money to give to start-up technology companies, but laughs at the suggestion she's an investment Santa Claus.

"We're not giving money away, we're investing," says the Venture Investment Fund's chief executive.

By Christmas, the VIF hopes to have identified the first "angel" investor - or group of investors - to partner with the fund's new Seed Co-investment Programme aimed at identifying and funding start-up businesses with strong growth potential.

The seed programme complements the VIF's established venture capital funding activities, but is aimed at businesses that are so new they would not be of interest to traditional venture capitalists.

It aims to encourage activity by angel investors, typically wealthy individual entrepreneurs ready to take the risk of investing in a new idea at the very early stages of its development.

For those angels approved by the VIF, their investment will be matched dollar-for-dollar by the VIF, up to $250,000 per investment.

"Once we set up our partnership with them, as they come across investment opportunities they want to make, we will invest alongside them, deal by deal," says Banga.

The VIF's call for investors resulted in 13 individuals, groups and syndicates coming forward. Banga says collectively the potential investors had experience across a range of industries including software, electrical, electronic engineering, biotechnology, life sciences, agriculture, internet, medical devices, communication, tourism, oil and gas, food and beverage processing and marine technology.

"It's a wonderful thing - New Zealand is absolutely full of people who, having been successful themselves in their own technology company, are very enthusiastic to support other technology companies and other high-growth innovative companies," she says.

"It's great to see those sorts of people who have typically been entrepreneurs themselves willing to put the time and their own money back into other companies like this. It [the $40 million seed programme] is really to encourage that and to put a bit of structure around it as well."

Banga says New Zealand is one of only a few countries to develop a programme to build relationships with individual angel investors and syndicates.

"These are long-term partnerships we're about to embark on. We'll be working alongside these people for five-plus years - it could be up to 10 or 12 years. It's very exciting to engage with these parties and work out how to develop the market."

Before being appointed to lead the VIF in 2001, Banga had an impressive list of policy and economic postings on her CV.

She has been a Reserve Bank economist, a director in the Treasury and was chief strategy adviser for the Ministry of Research, Science and Technology.

Banga is a graduate of the Stanford Business School senior executive programme and the Darden Business School leadership programme.

She describes her present role as "moving from theory to practice, and that's pretty satisfying".

She says the need to develop this country's appetite for venture capital is fundamental economic growth fodder.

While encouraged that the Government's superannuation fund was committed to investing in private equity, and potentially venture capital, she said institutional investors remained sadly risk-averse and unwilling to invest in their own local market.

FRANCESKA BANGA

Who: Chief executive, NZ Venture Investment Fund.

Favourite gadget: "My BlackBerry - it helps me know where I'm going and what I'm doing."

Next big thing: Research into preventive health care. "I'm in my late forties so I'm looking for those sorts of alternatives that will help me live longer and fitter. There are some interesting things on the horizon."

Alternative career: "I'd like to continue being part of the venture capital scene. I'm interested in economic growth so I think I'm in a pretty good spot."

Spare time: Spending time with partner and 10-year-old son. Making perfect pizza bases.

Favourite sci-fi movie: Blade Runner and more recently Star Wars - "That's more inspired by my son."