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It took Phil Alison from the Havelock North Fruit Company over a year to get his business investment ready. Now the innovative apple grower has attracted over $2m from New Zealand’s largest and angel investor group, Tauranga-based, Enterprise Angels.

 Phil Alison admits he was a little fish in a small pond swimming around in circles before he made the move to look for investment in his Hawke’s Bay apple orchards.

His innovative, tiny apple Rockit had been a startup success with serious sales potential via a secured contract with UK based retail giant Marks and Spencer and early success with trial shipments into Asia, along with a host of profile-building food innovation awards. However he says he was looking for additional  commercial  experience and capital to take advantage of the company’s potential.

Phil was attracted to Enterprise Angels because of their experience in kiwifruit and the obvious parallels with apples.

“I wasn’t just looking for financial investment but also the strategic experience that the appropriate Enterprise Angel directors could bring to my business.”

He pitched to around 40 Angel members and was quite quickly contacted by a potential investor. Eventually three Angel directors were appointed to the board and to date   $2.6m has been invested, enabling the licensing of Rockit worldwide and expert guidance with market entry.

Investment in Hawke’s Bay is significant for the Enterprise Angels with more money invested here recently than in the Bay of Plenty. The organisation has grown rapidly with 110 members in three chapters (Tauranga, Rotorua and Taupo) making it the largest Angel investor group in the country and this year alone, the group has invested in nine deals, totaling $1.4m.

Particular areas of interest for the group include innovation applied to agriculture, horticulture, food and engineering with pin-up examples including Heilala Vanilla, and Vocado.

Speaking at a Business Hawke’s Bay and Food Hawke’s Bay seminar earlier this month Enterprise Angels executive director and founder Bill Murphy told local businesses they need to be investment ready before they have a hope of attracting the Angels.

“For a business owner to be ready to pitch, they need to have done really good work on the creation of a product, market validation for that product and they must have a competitive sustainable advantage.”

And then there’s the personality side of investing. To be investable, entrepreneurs have to be coachable and “they have to want that assistance.”

“We do not invest in lifestyle businesses and, in many cases, the only way that the investment will pay off is because the business will be acquired, so they need to understand that, in 3-5 years, they have to be ready to exit.”

The momentum gathered by the Enterprise Angels in the last two years is having a magnetic effect on would-be investors with a new chapter being established in Taupo this month.

“We’re finding that the Angel members are having such a positive experience that they are bringing other investors with them, who have different levels of expertise to add to the deal.”

“We are attracting people who wouldn’t have known how to invest in this space and we are educating them and that’s extremely positive for economic development in the country as a whole.”

The likelihood of success for investors going it alone were slim he said.

“Investing in early stage businesses is high risk and you need to learn a lot to do it well and without investing with a group of people who bring different levels of expertise to that investment you will be at a real disadvantage.”

 

• NZTE offer assistance for businesses wanting to become investment-ready. For more details contact Brett Johnson, Regional Business Partner, 8765938/021 886 023