Guardian angels of regional growth

21 March 2005

Guardian angels of regional growth

New Zealand entrepreneurs need to be certain their businesses are ready to be invested in before they seek angel investors, says a Ministry of Economic Development researcher.

Policy advisor Carsten Schousboe says New Zealand’s angel investors have the opportunity to make a significant impact on regional growth – and local entrepreneurs need to do their homework if they want support from such investors.

Carsten Schousboe is speaking at this week’s Regional Development Conference in Napier. The conference is focused on moving regional development in New Zealand up a level to meet the demands of a changing international environment.

Angel investors are successful business people who are willing to provide management expertise and financial backing to start-up businesses.

He says angel investors can help fledgling firms, but those businesses first need to get themselves into a position where they are ready to be invested in.

“Angel investors do not want to be receiving poor-quality proposals, and networks have higher standards still. So it is important entrepreneurs get themselves investment-ready before seeking angel investors. Entrepreneurs should not shop their business all over town.”

One way in which entrepreneurs can make their businesses more attractive to angel investors is to take part in an investment-ready programme like the Escalator.

Escalator provides basic investment training in addition to giving businesses exposure to angel investors. It is a joint public/private initiative from New Zealand Trade and Enterprise, the Economic Development Association of New Zealand, Deloitte, I Grow New Zealand Ltd, Ignition Partner and Realize Technology,

Carsten Schousboe says the Escalator programme is an ideal way for people to access New Zealand’s networks of angel investors.

“The Escalator is well-aligned with angel networks, so these networks can refer investment opportunities that are not yet at a stage where an investor would take the risk, into investment ready programmes.

“Another issue is that angel investors are typically hidden and want to protect their anonymity. That’s part of the rationale behind building an investor network in your region – it maintains that confidentiality while helping entrepreneurs to find angels and angels to forge links with entrepreneurs. It also lifts the standards for local business investment.”

Carsten Schousboe says angel investors have real potential to improve both investment and regional development.

“This really is a way to improve investment in your region. We are starting to see angel investors group together. Working together in a syndicate or network means angels have a larger amount of money in reserve to scale-up a business. This gives the business further access to capital in the long run.” This year’s Regional Development Conference is the third to be held and runs from March 21-23. It is jointly hosted by the Minister for Industry and Regional Development, Jim Anderton, the Ministry of Economic Development, New Zealand Trade and Enterprise, EDANZ and the Hawke’s Bay region.

ENDS

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