Angels flock to networks
Angels flock to networks
The number of angel investors who have joined networks and funds has risen dramatically in the past two years, says the Angel Association of New Zealand executive director Suse Reynolds.
“While it’s not easy to be definitive about these numbers we estimate the number of eligible angel investors represented by our members has grown from around 370 to 730 in the past two years. Interest in this asset class is showing growth worldwide and in New Zealand this has coincided with a campaign we have been running to attract new investors.
“We are thrilled with the impact this has had. New activity and networks are emerging from one end of the country to the other - in Northland, Bay of Plenty and Southland, in addition to the major metropolitan centres.
“This growth in investor numbers is helping to fuel the increase in investment activity. This year angel networks and funds recorded their second consecutive year of more than $50 million of investment. The level of annual investment is almost triple what it was a decade ago.
“Having more angel investors participating in deals is good for the sector. It helps active angels diversify their portfolios reducing the risk associated with angel investment. If there are 10 angel investors contributing to a $250,000 investment in a start-up rather than five, then each investor’s contribution is smaller and they can spread their capital across wider portfolios, thereby increasing the potential for return on investment and giving them more capital to put in other startups.
Last year particularly was a fabulous year in early stage investment in New Zealand with some impressive statistics about the number of deals done and money invested, says Suse. “What’s really exciting is that across the country the dramatic increase in our capability and capacity in the last year means more high-growth, startup companies having a much better chance of accessing much needed capital.
“We are very aware our data does not tell the full story as it is only representative our members’ activity. We also applaud and champion the large number of early stage investors outside this community, such as those launching and investing through crowd funding platforms and others who prefer to operate more independently.
“One of the most inspiring aspects of angel investment is that studies show that the majority of net job growth in the economy comes from new companies. So angels are doing great things for the economic and social development of their communities.”
2015 is shaping up to be even bigger than last year, says Suse. “Canterbury Angels are now formally constituted and have held their first investment evening and. “Angels of the North” held their first event just before Christmas in Whangarei, which included a taste of what the region has to offer in early stage investment.
“Our aim is to grow numbers to more than 1000 angels and we’re well on the way to doing that, making New Zealand a really exciting place to be an entrepreneur or an early stage investor.”