An angel investor at my table, a scientist’s learnings
When the opportunity arose to attend the recent AANZ summit at Ohariu Farm in rural Wellington, I jumped enthusiastically. Not because I have money burning a hole in my back pocket, or because it was the first time I’d been on a plane in over six months, but because I am a research scientist (on the more entrepreneurial end of the scale) seeking avenues to take our Clarospec™ technology to the world.
My personal mission for the day was to meet people and ask them lots of questions to understand the world of Angel investment and what makes it tick (or not). I especially wanted to find out what additional attributes (besides revenue potential) investors are looking for in startups or spinouts – things to consider for my own journey.
The summit theme was Go Big or Go Home and the theme of the day was absolutely embraced by everyone – The atmosphere was buzzing with speakers and audience energy levels high. Every speaker accepted the challenge to introduce themselves with a mihi which was engaging – through their mihi each speaker showed humility and courage (and perhaps some vulnerability) from the start of their presentations. For some speakers this was the first time they had prepared a mihi or pepiha – Ka Pai!
On point with the theme was the concept of growth through international mergers and acquisitions. The complexity of melding people and businesses on opposite sides of the world with different operating contexts sounds complicated, and it is. All I can say is that the grit, determination and ambition those founders have is humbling. I really liked how embracing core principles (e.g. empowering people) can unite very diverse multinational teams. This principled approach to a way of working started at home in NZ and is obviously scalable internationally.
I was surprised to learn that acquisitions are often about getting new clients, the capabilities of the organisation being acquired may be less important (especially if they are a competitor). Food for thought.
AANZ’s member survey provided several interesting insights, Angel investors are motivated by the possibility of making a difference in the world, supporting change makers, sharing dreams, paying back and the intrigue and thrill of picking winners. This is perhaps not surprising but shows how there is a large emotional component behind investment decisions – it’s not just about the facts and figures, something we scientists often struggle to comprehend.
The deal breakers stood out and perhaps were not surprising the top five (in no order) were: not scalable internationally, a single founder with no team, no defensible IP, husband and wife team and no exit strategy. It was encouraging to hear emphasis on looking after people – developing a positive organisational culture as well as supporting founder, and team wellbeing.
Finally, on messed up cap tables… my favourite session because it got a lot of audience buy-in, and the debate format created an element of theatre. A lot of new terms came up Liquidity, Retail Investor, SAS, Secondary VC fund, Nominee). I am very grateful to AANZ, and Kiwinet for the opportunity to attend the 2022 AANZ summit.
Take home message: Sales revenue is the best non-diluting revenue!
Cameron Craigie is Strategy Lead – Next Generation Consumer Products at AgResearch Limited
