Start-ups scheme whittles down high-tech runners

By RICHARD BRADDELL

Up to five "world-class" high-tech business start-ups could walk away with development capital in the first round of a "business angel" entrepreneur programme sponsored by Industrial Research.

Professor Dennis Ray, an American expert helping the Wellington-based company get the programme going, said that 40 submissions had been whittled down to slightly more than 20 and he expected between three and five to culminate in investments.

The scheme had modest beginnings in Auckland and Wellington, but he hopes to get investment groups running in Christchurch and provincial centres that will match investors with budding entrepreneurs.

"I really think this could be one of the most powerful things promoting globally oriented entrepreneurship and innovation," Professor Ray said.

But while he is responsible for grooming potential entrepreneurs and is spearheading the drive to find investors, he also sees his task as establishing a network of people who can take over his job.

The business-angel programme aims to fill a gap in New Zealand business development by bringing together budding entrepreneurs who are too small to attract venture capital.

"Venture capitalists claim the deal flow isn't good here," said Professor Ray.

"But without the angel investors you will not have the companies that will grow fast enough that will create venture capital [sized] deals."

Professor Ray has been in New Zealand grooming suitable entrepreneurs to be put in front of prospective investors at meetings in Wellington and Auckland this week.

But while the majority would probably not come away with funding in this round, the grooming would put them in better stead to explain their case to other prospective investors or banks.

Most applicants were from the IT sector, but Professor Ray said the most interesting were in other sectors.

A Christchurch company's system that monitors the location of buses could be used in large bus systems and might generate sales that could be worth "much larger than just $100 million."

Another entrepreneur had designed an innovative golf putter but needed to produce it in quantity to capitalise on the idea.

And a company with "21st century technology" had come up with the solution to feeding small amounts of electricity generated by solar and other means into electricity grids.

The most interesting IT application was from an internet service provider who had come up with an unbeatable system for blocking objectionable content at the ISP itself. The system would be valuable to schools and could be licensed globally.

Professor Ray said IT was a tough sector to crack in the US and so developments were likely to be sold not much further afield than Australia.

And although entrepreneurs needed to have good ideas and products, Professor Ray said their most important attribute was to be able to communicate appropriately to various audiences on behalf of their companies.

Those unable to do so should take another position in the operation and leave the presentation to someone else.

"The two who stand out as quite rigid [in their presentation] had fantastic products."