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The New Zealand government actively encourages overseas investment in New Zealand and there are many local investors who recognise the value of investing in North Shore City’s rapidly growing commercial and industrial sectors, as well as its innovative start-ups. If you are interested in investing in North Shore City businesses and start-ups, please contact us for more information.
What criteria does my business need to meet to attract investment?
Most investors prefer to invest in an already-established business with a track record of performance, which is ready to expand has a detailed plan to do so, and which shows predicted returns - making the investment worthwhile over a set period of time.
Investors often enter into the transaction with a fixed period in mind, and a pre-determined exit strategy which allows them to divest themselves of their shares and realise their gains.
Angel investment
For investors, buying into start-ups and businesses without a proven track record is much riskier – but the returns can also be greater. Investors willing to provide start-up or seed capital – so-called angel investors – usually require a larger share of equity in return to offset this risk. Enterprise North Shore can assist businesses in North Shore City with securing angel investment, provided they meet certain criteria.
Getting ready for investment
If you are thinking of bringing venture capital into your business, you should groom it to maximise its attractiveness to investors. This includes ensuring you have a detailed business plan for the short and medium-term, including a detailed financial plan (often this will have best and worst case scenarios). An investor will also want to see past performance, and will usually take into account your and your team’s experience. You should also have a clear idea of what kind of investment you want, for how long, how involved you want your investor(s) to be in the business, whether or not you are looking to attract investors who can offer skill and experience in addition to finance, and what exit strategies you plan to provide or are willing to accommodate.
The government-funded Investment Ready training programme helps business owners and start-ups learn about the type of finance available and which of these they require to expand, diversify or commercialise a new concept and how they can access equity funding from investors.
Another government-funded service, the Escalator service assists business growth by providing specialist skills and assistance to raise equity funding or complete a strategic relationship that may help your business expand, diversify or commercialise a product or service.
How Enterprise North Shore can help
Enterprise North Shore regularly hosts Escalator workshops for North Shore businesspeople. Check the Escalator web site for the next Escalator workshop in your area. It also actively brings together investors looking for business opportunities within the North Shore’s rapidly growing business and industrial sector, and owners of large, medium and even small businesses looking for angel investors or venture capital to help them to get off the ground or create and sustain growth.
Enterprise North Shore can provide advice and information with regard to venture capital and angel investment, and can help you with grooming your business and accessing these services.
Factors to take into account:
There are a number of factors to take into consideration, and there are pros and cons for both sides with regard to equity finance. Enterprise North Shore can help both sides work through the issues, and can play a role in matching business owners and investors whose aims and points of view are complementary.
Business owners
Pros
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Cons
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Equity finance is an option even if you have no security against which the banks would be willing to lend
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You no longer own 100% of your business
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You do not need to go into debt in order to secure finance
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You may lose some of the control you have had
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You often gain a business partner who may have skills and experience to contribute, as well as finance
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You are accountable to someone else for your business’s performance and your governance
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Investors
Pros
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Cons
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Investing in a good start-up or small business can yield substantial returns on the sum invested
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There is no guarantee that the business will perform as expected and there is the potential to lose the capital as well as any predicted returns
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Some investors play an active role in helping to develop the business, and may find this aspect rewarding
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More information:
Vcapital is an online angel investor network which links registered investors to private equity / venture capital / angel investment opportunities from a range of industries
The ICE angels and bizAngels both offer to connect startup and emerging businesses with investors.
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