"The showcase is a fantastic recruitment event for new angels. It has short, sharp pitches and demonstrates a diverse group of companies ... so it enables the wider investment community to see the quality of deals and range of opportunities coming through the angel network." Attracting new investors also broadens the capital pool for other budding entrepreneurs, says Erskine.
Only good prospects representing a wide range of sectors are chosen to pitch. This year more than 75 applicants from angel groups throughout the country were reviewed, 50 were screened by a dedicated investment committee, and 14 were invited to present.
Guest speaker Jim Connor, president of the Silicon Valley-based Sandhill Angels and organiser of the far bigger US Angel Capital Association's 2012 Summit Showcase, says he was impressed with the calibre of the companies pitching.
"Compared to what we had in San Francisco in 2012, I thought the New Zealand companies were actually at par or slightly better." Connor was so impressed with one of the companies, Parrot Analytics, he even invested in it himself.
Companies pitching at the 2014 Angel Investment Showcase
•
Texus Fibre
: Wool-based innovations, initially for respiratory market
• Parrot Analytics: Research analytics designed to determine the popularity of content before release
• Bison: Lightweight container-handling and weighing systems
• MEA Mobile: Mobile app developer
• Montoux: Financial modelling made easy
• Ubiquitome: Mobile, handheld, molecular testing device
• Wipster: Intuitive platform for video production collaboration
• PowerbyProxi: Wireless power technologyPick-a-Medic: Online recruitment for hospitals and clinicsCrimson Consulting: Educational consultancy, designed to get students into top universities
• Times-7: Radio frequency ID antennas
• Joiy: Sparkling wine
• Breathe Easy: Drug therapy for cystic fibrosis
• Hunter Safety Lab: Smart detection gun-safety technology
Here's a taste of some of the opportunities on offer this year:
Easier financial modelling: Montroux
Easy-to-use financial modelling company Montoux was formed in Lyall Bay by three Dutch surfing buddies drawn by New Zealand's outdoor lifestyle.
Klaas Stijnen, a senior actuary, says he was fed up with complicated financial modelling software designed for analysts and not company CEOs, who were the ones who really needed the information to run their companies better.
"I've always been frustrated that financial modelling is seen as something a group of nerdy people do in the back room with complicated, expensive and time-consuming systems."
He aired his concerns to surfing buddies Nils van der Heide, a user-interaction designer, and Gert Verhoog, an experienced software developer. A couple of prototypes later, in January 2012, Montoux was formed to put the power of financial modelling back in the hands of CEOs through a simple, cloud-based app, he says.
Through Stijnen's networks, the trio has already attracted some key investors including Charles Hett, head of actuarial services at Deloitte, Stijnen's former employer, and Shamubeel Eaqub, the New Zealand Institute of Economic Research's principal economist.
Deloitte NZ is a customer, as are some government departments.
The trio predict the company will break even in New Zealand next year. They are looking for $600,000 from showcase investors who can help them break into new markets and develop the company's sales and marketing abilities.
"Sales and marketing is not our forte," admits Stijnen. Hopefully, the investors will also be surfers, he laughs.
Parrot aims to take risk out of films: Parrot Analytics
Alan Gourdie, chairman of Parrot Analytics, is keen to further develop its technology and markets. Photo / Jason Oxenham
Imagine knowing how your film will be received before you spend millions of dollars producing it. That's the pitch from research technology company Parrot Analytics.
The company's proprietary technology platform - the "secret sauce", proud chairman and investor Alan Gourdie calls it - allows it to track a quarter of the world's internet traffic.
"It's amazing technology; we collect a billion data points a week," says Gourdie.
These data points, or little bits of gossip about a film, an actor, a trailer or any other digital mention, allow Parrot Analytics' technology to build a fairly accurate idea of how a new TV show, movie or book might be received.
Though it is still being developed, at present the technology is tracking at a 92 per cent accuracy rating compared with the main market research incumbent, Nielsen, which rates content after it is aired.
Parrot Analytics was co-founded two years ago by Auckland University graduate Wared Seger, initially to help musicians and film-makers track how their work was being consumed online.
It quickly attracted the attention of the Ice Angels, of which Gourdie, formerly Telecom's retail chief executive, was a member. Other investors include M-Com founder Alan Clark, the Government's Venture Investment Fund, and Stephen Tindall's investment company K1W1.
But it soon became apparent that the music industry was well served by research and tracking technology, says Gourdie, so Parrot Analytics "pivoted" to focus on a bigger opportunity in film and television.
Parrot is looking for $1 million to $3 million to further develop the technology and its markets, he says.
"It's always that tension between how much equity you sell at this valuation."
All the current investors are re-investing, so the company has about $700,000 already committed.
Capital needed to fund acquisition hunt: MEA Mobile
Nils van der Heide (left) and Klaas Stijnen of financial modelling company Montoux are keen to break into new markets.
MEA Mobile is not your average angel investment pitch.
The Hamilton company has been making mobile apps for itself and others since 2007. It employs 40 people, has three New Zealand offices, one in Sydney and one in Connecticut, and reported revenue of $3.3 million in its latest financial year.
Investors include Stephen Tindall's K1W1 fund and it is expected to list on the NZ Stock Exchange's new NXT market next year.
Co-founder Rod Macfarlane says the company is looking for $1.5 million to $4 million to accelerate growth and market its successful apps.
"We don't put large amounts of money behind an app idea; we put very small amounts of cash in and then get it into the market early to seek feedback."
Nine of the company's 200-plus apps have made it to the No 1 slot in a range of categories. That includes Printicular, which earns MEA Mobile more than US$100,000 a month by allowing users to print photos directly from their phone and either have them delivered or, if they are in the US, pick them up from a local Walgreens pharmacy.
Newly appointed independent director Colin Groves says the capital raised will be primarily to drive acquisitive growth.
"One of the problems with IT startups is once you get to about 40 people, how do you grow to 100 and then to 500? Getting high-quality people is not easy ..."
By identifying and buying smaller companies with similar cultures, he says, the company can grow much more quickly.
Safety innovators aim high: Hunter Safety Lab
Hunter Safety Lab's David Grove (left) and Michael Scott initially underestimated how much funding they would need.
Michael Scott and David Grove, co-founders of Hunter Safety Lab, have been here before.
In 2012 they pitched at the Angel Summit Showcase in Wellington, raising $750,000.
That was $300,000 more than they were asking for, after savvy investors told them they needed more.
But $750,000 was still a far cry from what they really needed to finish developing their smart detection technology for the hunting industry and turn it into a product that could be brought to the market, admits Scott.
"It was quite an audacious goal; a totally new company, a new brand and a new category of product into a new market. Realistically speaking, a year and $750,000 wasn't ever going to do it."
Hunter Safety aims to make hunting less risky, using sensors on clothing and rifles to alert shooters if they accidentally target another hunter.
The process has been much harder than they ever envisaged, he admits, with unforeseen problems requiring changes in direction.
The company had to start producing its own hats and vests that include HSL's sensor technology, after independent testing revealed customers rarely attached the sensor stickers in the right way.
"Now we're in the garment-making business," says Scott.
The pair returned to shareholders this year, netting $440,000. That allowed the company to hire two extra staff in New Zealand and a US-based sales veteran to begin marketing the product. The extra $700,000 they are seeking will help accelerate US sales, says Scott.
The company is also talking to other sectors about its technology, such as the forestry industry and law enforcement, but that's all some way down the track, he says. "You can see the oasis; you can see the bigger vision, but you have got to get across that desert first."
Looking for lift to next level: Bison
Corporate lawyer turned entrepreneur Greg Fahey, co-founder of Bison Group, teamed up with his engineering brother Mark to develop Bison's lightweight hydraulic jacks and bring them to the container market.
Bison's jacks are designed for exporters and importers who need to land containers without the cost of bringing in heavy forklifts or cranes to do the job, he says. "Basically, we make incredibly lightweight equipment that can lift very heavy things."
Greg Fahey says they explored a number of markets for his brother's lightweight hydraulic idea before settling on the container market.
The decision was fortuitous, because the brothers soon discovered that in 2016 shipping rules will change, forcing the weight of containers to be verified before they are shipped.
The pair adapted their technology to create a product that weighs containers wherever they are, again without the need for costly lifting equipment. Fahey is looking to raise $450,000 of seed capital to complete the development of both products and take them to market next year.
So far $260,000 is promised from some Otago-based angels, so they need only another $190,000 to make target. "Our strategy is to raise just enough to get us to sales and then we can go back for more when we have a higher valuation."
As for becoming an entrepreneur, it's a rollercoaster ride, says Fahey. "The highs are higher, the lows are lower, but it's exciting being in charge of your own destiny."
Opening doors to university study: Crimson Consulting
Jamie Beaton of Crimson Consulting. Photo / Chris Gorman
Jamie Beaton, co-founder and chief executive of educational consultancy Crimson Consulting, spotted a gap in the market while still at school.
Though educational consultants were increasingly common in parts of Asia and the United States, it was still a largely untapped area in Australasia, South Africa and other regions.
"It is becoming ridiculously competitive to get into top universities," Beaton says, which is why there is increasing demand for help to groom students as candidates.
At only 19, Beaton has an impressive record of walking his talk. He applied to 25 universities, including most of America's Ivy League, and was accepted by all, he says, after "he worked his arse off for five years" at high school.
Beaton is studying applied mathematics and economics full-time at Harvard, though he says he spends at least 30 hours a week helping to run Crimson.
He is helped by co-founder and chief operating officer Sharndre Kushor, who is studying health science at Auckland University.
Beaton met Kushor and some of the other seven members of his executive team - all based at universities in Britain, Australia and the US (with the oldest just 22) - through a United Nations youth trip soon after he finished school.
At first he and Kushor battled scepticism because of their ages, but after more than a year in business and a reported turnover of $420,000, profit of $290,000, and placements at all eight of the world's top universities, the company has attracted interest from some big names, including well-known US hedge fund manager Alex Robertson.
Beaton has commitments for more than $900,000 of the $1.5 million he is targeting, and hopes to attract investors who can help the company grow.
"We want investors who are experienced in scaling consultancy businesses, Asian markets and in exiting companies."
