Auckland angel and venture investment group Sparkbox Ventures is looking to give tech startups a leg up by offering a range of advisory services to assist young companies eager to expand.
Sparkbox chairman Andrew Duff said many startups usually had limited experience and their prime focus was on developing products and services.
“A serial entrepreneur will have had experience in raising investment, dealing with equity investors, and getting the optimal company structure in place. For the first time entrepreneur, however, there is a steep learning curve. It is difficult enough trying to get a new product right and to build revenue to keep the company going without having to worry about many of the associated issues involved in developing a company."
Sparkbox’s advisory services include financial and strategic advice, business building and exit planning, he said
“This can include advice on international product and service roll outs, exits and exit planning, acquisitions and mergers, patent reviews, fundraisings and capital restructurings and business growth and international market penetration expertise.
“We are actively looking for New Zealand innovation, and talented entrepreneurs with internationally scalable solutions. There are many talented innovators in this country and Sparkbox wants to surround them with the funds, experience and skills to execute to international standards."
According to Duff, startups needing equity investment face some fairly complex issues. New investors want to know all about about the company’s prospects, ownership and potential returns, and whether the investment being sought will provide returns.
“Valuing a company is a complex operation and often there is a considerable gap between the start-up founders and potential investors. How investments should be structured – ordinary shares, convertible notes, or some other variant – can be complex.
“As the recent Young Company Finance Index showed, the New Zealand early stage investment market is maturing. Angel investors are investing smaller amounts, on lower valuations. In this environment, it is important that startups have a good understanding of the investment market."