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“The first half of the year saw a higher level of follow on investment into existing portfolio companies compared with new investment into new companies,” says Chris Twiss, NZVIF’s investment director.

“Investors are a little more cautions given chances in the general economic climate,” he says. “This is a trend we have seen before following high investment, with angels shifting their focus to follow-on deals in subsequent years.”

“Angel’s are coming off a previous year which saw a lot of new investment,” says Marcel van den Assum, chair of the Angel Association. “When economic conditions tighten, it is natural that investors will looking to continue to support those companies in their portfolio which are doing well and meeting milestones. That is borne out by the higher level of follow-on investment we are seeing in the market.”

He says that, despite the decrease, the angel sector is now an important part of New Zealand’s capital markets, with approximately $50 million a year being invested into very young companies.

In the first half of 2015, software was the most popular sector for angel investment, attracting 43% of investment ($8.8 million), followed by pharmaceutical and biotech at 16.5 % ($3.4 million), healthcare at 13% ($2.7 million), food and beverage at 10% ($2 million) and technology at 5% ($1.1 million).

83% of the deals were syndicated between different angel groups. 31% were convertible loans, 26% were ordinary shares, and 43% were preference shares.