New Zealand's capital ecosystem has developed significantly over the last 15 years. The explosion of early stage venture capital and angel investment activity, stimulated significantly through recent government co-investment matching schemes like NZVIF and SCIF has created significant traction in the venture capital markets in New Zealand, attracting larger international funds like Airtree, Blackbird, and NZ's own Movac Fund 4 over the last year or so.
Notwithstanding the Angel Association's excellent suggestions on shoring up the last remaining vestiges of the venture capital community, there still remains opportunity for making it a little easier to preserve the earliest stages of startup capital for founders and that's what this goal is focussed on.
Whilst we've already done a lot to encourage the growth of the startup and innovation ecosystem in New Zealand, it is ultimately sub-scale, because New Zealand is sub-scale. Many in the startup community feel that we have reached the limits of our own efforts, existing primarily on sponsorship, sweat equity, and goodwill, and now risk cannibalizing each other's efforts without further top-down support and intevention.
Therefore, the Start NZ Up action plan consists of a number of intentionally high-level policy-level recommendations, which, if thoughtfully impemented, would have significant impact on the development of the startup and innovation ecosystem in New Zealand. The specific recommendations for this goal are presented below.
Extend the 'tech-led' startup repayable loans scheme to 'founder-led' startups also, with a conversion to equity option to help seed more startup activity.
Allow Employee Share Schemes to be recognised on 'capital' account (rather than being treating as 'income') to allow external advisors, employees and other non-financial investors to reduce their taxation liability, and to make it easier and more attractive to create companies and reward early risk.
Extend R&D grants to support new products for 'founder-led' startups, allowing them to additionally offset their internal development costs - at the early stages, most startups still don't have the capital to pay external contractors, but still need support to invest in new research and particularly development using their own resources (usually before investors are involved).
Whilst this isn't an exhaustive list of initiatives, any one of these, if thoughtfully implemented, could have significant impact on our entrepreneurial economy in NZ.
Some of our partners may have already started this work on the ground - view the list of those, or add your details to the list, below.
To create a more vibrant and entrepreneurial economy in New Zealand isn't just the job of one person or organisation, it will require the collective efforts of a team of 5 million people to play their part.
It is clear, however, that parts of this action plan requires policy change, and whilst that is a continuing conversation, it's useful to reflect on those people and organisations on the ground who are already doing this work.
If you're working towards one or more of these goals, please consider listing yourself or your organisation as a partner for the goals using the form below. Our current partners specifically working on this goal, are shown below.
2016 Formed the University of Auckland Inventors Fund - Open $20m Seed fund for University of Auckland Inventors Fund
2016 Joined Brandon Capital's Medical Research Commercialisation Fund (MRCF) alongside 15 other medical research organisation bringing preferential access to around A$200m of seed and venture capital for medical technologies.
2018 Worked with the G08 largest Universities in Australia to bring IPGroup (www.ipgroupplc.com) to Australasia and commit A$200m to IP from the G08 and Auckland into spin-outs
Contact: Will Charles
ZeroPoint Ventures is a local and international network of entrepreneurs, accelerator managers, and investors who partner with startups and growing companies to re-engineer their organisations for long-term, sustainable growth, and impact.
In 2013, members of our team designed and led Lightning Lab, New Zealand’s first and leading investment accelerator, leading a national vision to speed up globally scalable technology ventures from NZ and connect founders from around New Zealand to investment capital, mentor networks, and international expertise to help their ventures grow.
In 2020, we launched the Start NZ Up initiative, a top-down effort to affect proactive policy-change and support for entrepreneurs, specifically to put focus on creating access to- and preservation of- capital at earlier stages of a startup's lifecycle, specifically through Goal 03.
Contact: Dan Khan
There are many of us already working on the ground towards creating a more vibrant and entrepreneurial economy in New Zealand. Whilst we contend that there's more support needed, it's useful to understand what others are already doing, what their impact has been so far, and how that impact could be amplified if we significantly change their access to resources.
If you're working towards one or more of these goals, please consider listing yourself or your organisation as a partner for the goals using the form below. The impact our current partners have had, specifically working on this goal, is shown below.
The above means that the University of Auckland (prior to the formation of the Technology Incubators) has preferential access (i.e. the capital can only invest in either 15 organisations IP -MRCF or 9 Universities - IP Group) to almost $550m of capital for Seed, Series A,B,C and expansion
Contact: Will Charles
In 2018 we launched a new partnership between Wellington UniVentures and New Zealand financial services company Booster, called the New Zealand Innovation Booster, which will see Booster invest a minimum of $2 million a year for five years in a portfolio of new start-ups. Booster is one of the nine government-appointed default KiwiSaver scheme providers, with $2.5 billion currently under management on behalf of over 120,000 investors across KiwiSaver and other superannuation and investment schemes, and this partnership marks the first time a New Zealand financial institution has joined forces with a university to invest in its start-up companies.
Contact: Emily Sullivan
If you're already working towards some or all the ecosystem development goals, please consider listing your details below so we can link to you as a partner for those goals. Our overall aim is to collate a list of those working towards each goal in an effort to facilitate cross-collaboration, and to measure our collective impact in building a more vibrant startup and innovation ecosystem in New Zealand.