Day One: Monday, March 26 — A Preview of NZ Venture Capital
The New Zealand Venture Investment Fund
CEO-Franceska Banga, Julian van de Wetering- Investment Analyst
The New Zealand Venture Investment Fund (NZVIF)- NZVIF is a Crown Owned Company contracted by the New Zealand Government to administer the Venture Capital and Seed Co-investment Programs. The Company’s VIF Venture Capital program, established by Government in August 2001, is a "fund of funds" equity investment program which is investing NZ$160 million alongside private sector co-investors in a series of privately managed venture capital investment funds. The program is designed to increase the supply of capital to New Zealand based innovative young companies and over time, to accelerate the development of the venture capital market in New Zealand. The Seed Co-Investment Fund is an equity investment fund aimed at small to medium sized businesses at the seed and start-up stage of development that have strong potential for high growth.
Student thoughts: “The NZVIF has been instrumental in pushing through legislation that will allow businesses to be structured as a limited partnership, which up until now has not been possible. NZVIF worked closely with the legislative bodies within New Zealand to ensure the laws passed would provide the maximum benefit to domestic venture capital funds. NZVIF in conjunction with Wilshire Associates, a U.S. based investment consulting firm, has created a very impressive due diligence framework that is used when evaluating investments in new firms. NZVIF is more interested in building new managers than investing in seasoned venture capitalists and the due diligence framework is designed in a way that makes identifying strong candidates simple and objective. When NZVIF evaluates a new manager they begin with questions such as, “has the manager raised money previously”; “has the manager made money for themselves rather than only for others”; “what is the investment strategy of the firm and will that strategy work within New Zealand”; and “what is the firm’s investment process?”
Justin Maloney-Marketing Manager
Rakon Limited (NZX:RAK) is a world leader in the development and production of high performance quartz crystal components used for timing reference and frequency control in demanding applications, such as global positioning systems (GPS). From its head office and manufacturing facility in Auckland, New Zealand, Rakon produces a range of crystals and oscillators for its global customer base which includes many of the world's leading manufacturers of recreational, commercial and military/aerospace GPS products, mobile phones and other communications products. As a leading provider to the GPS industry, Rakon believes it is well positioned to benefit from the significant growth which the Company considers is likely to occur as GPS products penetrate the consumer mass market.
CEO-David Clarke, COO Dr Parmjot Bains
Compared to the traditional big pharmaceutical company, Neuren Pharmaceuticals is a relatively small organization consisting of approximately 17 employees that operates on a very lean budget. Their primary focus is to bring new molecular compounds for Parkinson’s, Alzheimer’s and Neuronal Cell Repair from phase I & II clinical trail stages to phase III& IV through partnerships with larger companies. Their financial position hinges primary on the approval of one key compound called Glycopromate, which is used for cell repair. Should this product fail initial clinical trials, they are unsure if they will have enough funding to continue producing compounds in the future.
“After visiting Neuren Pharmaceuticals I was able to gain some insight into how a smaller Pharma/BioTech company works to raise capital, employ resources and develop partnerships with larger pharmaceutical companies to bring their products to market. Considering that my background is in the big pharmaceutical arena, visiting a smaller company was a real eye opener.”