KEY POINTS:
Those with spare cash wanting to try their hand at angel investing are being offered an easy entree.
The New Zealand Venture Investment Fund has set up the Halo Fund, an initiative aimed at attracting new angels.
Angel investors are individuals who put money into early stage businesses. In recent years this end of the private equity industry has become more formalised, with angels forming networks and investing in portfolios of fledgling companies.
It's risky investing, and angels - often former successful business people themselves - usually get into it partly out of a desire to contribute to New Zealand's economic future.
The Halo Fund aims to raise a minimum of $5 million, and angels can put in as little as $25,000.
The fund will partner with established, approved angel networks such as Auckland's Ice Angels or Upstart Angels in Dunedin, and with NZVIF's Seed Co-Investment Fund.
The established angels will make investment decisions, taking the pressure off the novices.
Halo will contribute 50 cents for every dollar invested in a business by an existing angel group and the Seed Co-Investment Fund, up to a maximum of $125,000.
NZVIF chief executive Franceska Banga said it was a good opportunity for investors to find out if they were comfortable with angel investing, and for those with less capital to still be involved.
The Halo Fund would give them a small amount of access to deals the active angels and SCIF were in.
"I think it is a way to get into the market at a lower risk threshold that gives you a good vision across a whole range of portfolio companies."
Experienced angels would say that "the last thing you want is somebody enthusiastically coming along and putting their $500,000 into only one company, and if it goes sour they never do it again," she said.
NZVIF is on a drive to recruit 1000 angel investors.
Angels did not invest in property development, retailing, mining or hospitality.
"That has always been in our mandate," Banga said.
"It's just a way to say this particular sector is about high growth, innovation and technology."
The fund will operate for 10 years and proceeds from liquidating investments will be distributed to investors, not invested back in the fund.
