Bay of Plenty businesses have seen success following recent pitch nights. Photo / Pixabay
Offering learning opportunities and chances for investment, pitch nights are "crucial" for Bay of Plenty businesses seeking to grow.
Four businesses did just that recently, each hoping those in the room would see their potential.
The event, hosted by Firestation, Rotorua X and Rotorua NZ, was held in Rotorua and aimed to introduce investment-ready businesses to prospective investors.
Event director Darren McGarvie said the event provided an important and much-needed platform for local businesses.
"Access to capital continues to be a barrier for businesses to grow.
"Pitch Night has been developed to enable local businesses another viable avenue to fund their growth, whether that be equity or lending investment."
Based on his experience, businesses were far more likely to fail when rapidly growing revenue. "The founders often need fast access to cash to fund that growth."
Major banks can be nervous about lending to newer businesses, he said, so it was important that local founders can connect with potential investors who are prepared to invest and understand the risks.
There were also opportunities for those in the Western Bay of Plenty through Tauranga's Enterprise Angels.
Marketing co-ordinator Jeanette Mindham said the objective of pitch nights was to introduce early-stage investment-ready businesses to its membership as potential investment opportunities.
Businesses were often start-ups and the companies had retained key management, prepared a business plan and undertaken market validations.
"At this stage, the company is operational but is not yet at the stage of commercial manufacturing and sales.
"It's usually seeing its first revenues but has yet to show a profit."
Typically companies were looking at financing to support product development, marketing and hiring key personnel in those fields. They often looked for in excess of $500,000.
Other times it was "seed-stage" businesses, which had not usually established commercial operations and were looking for financing supporting pre-startup research and development, product development and testing or designing specialised equipment.
Last month it had local Tauranga company UBCO back again at one of its pitch nights.
Enterprise Angels first invested in UBCO back in July 2016 and have made seven subsequent investments.
She said UBCO made a great story in that angel investing was not just about investing capital, but also about members supporting companies through their expertise, experience and connections.
"When we invest in a company there is an opportunity for one of the investors to become an investor rep or director for the company, which is a role that aims to maximise value for both the assigned company and their investors."
Three of the businesses that pitched in Rotorua shared with NZME how it went, what it was like and why it was important for their growth.
They each had 15 minutes to compel potential investors to find out more.
The audience is a mix of individual and corporate investors, pitch team supporters and event partner sponsors and members.
BrakeAce
Founder: Matt Miller
Industry: Bike Tech
Seeking: Equity
Needs: $100,000
BrakeAce's Dr Matt Miller reckons seeds were sown at the pitch night after he shared with the room his business growth plans.
BrakeAce's patented PF2 brake sensor is hypersensitive to braking, while the suite of
mobile and web apps automatically analysed the ride.
It received more than $100,000 on Kickstarter a year ago and used the capital raised there to create its first product.
Pitch night was the unofficial first time the sensor was shown publicly.
"We'll be delivering to our backers and opening pre-orders soon. An official product launch of the BrakeAce PF2 sensor is forthcoming."
Miller said it was well received, with some great questions posed by the audience.
He aimed to learn from these to address them in his next pitch. He said he was able to line up a few meetings following on from the night and had been invited to other events.
When asked what he found easy or challenging, he said he had been excited - no nerves at all.
"The greatest challenge is answering a listener's questions within the talk so they can focus instead on the rest of the content. Of course, we only have a short time to talk."
He said it definitely felt like how he imagined Shark Tank to be, but without the ominous music.
Specifically, he said the investment would be used to create its own wireless module, for which $40,000 was needed.
This would increase its margin as it would not need to pay the licensing fees it did now.
"We need further $60,000 to sponsor teams and be on the ground at all the biggest MTB events."
He said it had proven it could do the hardware, but it saw the biggest gaps in sports software.
"In our one to three-year plan, we'll continue to connect to any sensor that other companies make, and demystify the data so that any rider at any level can improve the way that they ride."
He said the pitch night was key for speaking in front of the local community.
"This event gave us good practice, good feedback, and plenty of seeds sown."
SetSeed
Founder: Chris Parnell (Rotorua) and Ben Vallack (UK)
Industry: Tech
Seeking: $250,000
Needs: Equity
Chris Parnell of SetSeed - a self-hosted, all-in-one Design and Content Management
System - said pitching was a big adrenaline rush.
The platform enabled web agencies to build feature-rich websites fast.
Parnell bootstrapped SetSeed through CG Design, a Rotorua web agency and the start-up had a mature platform that was ready to scale globally. It already had customers in New Zealand, the United Kingdom and the United States.
He said he pitched deliberately to throw himself in the deep end.
"I did an accidental video pitch about six weeks ago, and it was a bit of a disaster as I wasn't prepared.
"I thought I was having an intro chat with an angel investor, not a dozen of them."
That motivated him to get things right for the Rotorua Pitch Night, and it helped that he knew a few people and that McGarvie had provided pitch coaching.
"Since applying to do Rotorua Pitch Night, I've actually had a bunch of interest come our way, from private investors to angel investors and even Venture Capital (VC)."
Following the pitch night, he had a local investor reach out to discuss terms, had an offer from a Tauranga investor and co-founder of a large startup and had someone introduce him to a Sydney-based VC.
Speaking of why he was looking for investment, he said to scale, and scale fast, you need it.
He said it would be used to grow online discoverability and to attend events globally, all with the goal of creating sales.
He said events like pitch night were crucial for being in a position to be discovered, and it was just as much about growing as a founder as well as a personal brand.
"It's only when you put yourself in a position to fail that you really grow and thrive."
Kawerau-born, Parnell has links across the wider Bay of Plenty, having lived in Pāpāmoa and Mount Maunganui. He has lived in Rotorua since 2006 and has raised his family there.
"I'm a proud Bay of Plenty lad. My vision is a large global business that is still anchored to the Bay of Plenty."
VV Mylk
Founder: Hayden Booker
Industry: FMCG
Seeking: $250.000+
Needs: Equity or Loan
VV Mylk, a milk alternative, was pitched to the room as being a world first plant-based mylk concentrates, made using ancient techniques. It aimed to maximise taste and nutritional benefits with no waste.
Since the pitch, Hayden Booker has been "non-stop" talking to potential investors, and while he said getting up and talking in front of a group of people has always been a tough task for him, he felt his confidence was good on the night.
Established in 2014, VV Mylk grew from his regard for the welfare of humans, animals and the planet.
Produced in Rotorua, the products range from being able to be used in coffee, smoothies, and in cooking or baking - or just off the spoon or added to cereal in the morning.
Booker was planning to expand into the Australian market by purchasing a company with the investment, as well as funding growth in New Zealand.
"Long term, I would like to see our products used everywhere milk is used. On everyone's shelves in their homes too."
Events like the Rotorua Pitch Night helped with local exposure, he said. Booker moved away from Rotorua when he was 18 and, having moved back from Tauranga, had been operating in Rotorua for about three years.
"I really am enjoying getting to know people in the business community here."
A 1974 fun lads' golf trip is now an annual tradition titled the 'Okareka Classic'.