The Punakaiki Fund, incorporated earlier this year to support growth tech companies, has an appetite for riskier, early investments in companies taking time to build.
The fund today detailed its public offer and released its prospectus, confirming it wants to raise $20 million with oversubscription capacity for another $30 million. The offer price is $1 per share.
Director Lance Wiggs says the investment sweet spot will be the $200,000 to $2 million space, which the prospectus says
will likely account for more than a third of the fund's deals.
Seed investments of between $20 million and $200 million might make up more than half of its investments, the prospectus says.
"The combination of a rising tide of entrepreneurs and the public that sees it happening, that's why we're starting this
fund," Wiggs says, adding it wants to talk to businesses about long term growth rather than quick exits. "We see a growing number of people who think it's normal to start a company and grow it into something amazing."
The fund understands the startup growth phase can take three years, and hopes to make multiple investment rounds in some firms, Wiggs says.
He hopes to talk to about 10 companies once the fund closes in October.
The targets are internet and technology businesses, and software as a service companies, that are design-led and demonstrate they're growing, he says.
If the investment is less than $2 million, Wiggs and business partner Chris Humphreys can make a quick decision about a deal, Wiggs says.
Larger investments will be decided by the board, which also includes independent directors Sandy Maier and Wayne Hudson.
Some of these may also be 'turnarounds and transformations' - businesses that have stagnated and need a change of direction. These will typically be $5 million and upwards, the prospectus says.
Punakaiki hopes to join the NZX in three to five years - in the meantime it will use Link Market Services for share trading.