16 Jul 2010

Angel investor sees gap in funding market

4:11 pm on 16 July 2010

One of the United States's most prolific angel investors is encouraging New Zealand to develop small venture capital firms to plug a gap in the funding market.

Bill Payne, originally trained as an engineer, developed a engineering firm in the 1970s that he sold to DuPont in the 1980s.

He has been an angel investor in startup companies since then, and has launched networks in the US for angel investors to financially back projects as a group.

After spending five months in New Zealand, speaking with entrepreneurs and angel investors, Mr Payne has concluded that angel investment activity here is now on a par with some of the prime investing cities in the US.

But despite the environment being robust and vibrant, he says, there is some room for improvement.

Angel investors have put up to $1 million into about 150 companies, Mr Payne says, and a portion of those now need more capital to allow the business to grow. Investment needs to be in the $2 million-$5 million bracket, he says.