Double Your Exits – New Zealand

BY Basil Peters

This short workshop was presented at the the 6th Annual Angel Investor Summit, Dunedin, New Zealand – the second most southern city in the world.

As part of an economic development initiative to stimulate investment in technology, I was invited by the New Zealand government to spend a week traveling up and down the country to meet with angel groups and government officials.

Double Your Exits includes:

  • OK, I’ll say it…Most angel investors lose money
  • We need to talk about it and I know we are already improving
  • Generating a consistent return on any investment portfolio isn’t easy
  • “To learn to be a VC takes 6 to 8 years and costs $20 million”
  • Angel investing is actually more difficult than Venture Capital investing
  • Angel investing is still quite new – about where Venture Capital was in the early 1980s
  • Our biggest problem is a lack of good data
  • From “An Evaluation of the Venture Capital Program in British Columbia”
  • 206 angel-backed companies 2001-2008: 0.5% did an IPO and 2.9% were acquired
  • Each direct observation is a company observed through its entire life cycle from startup to exit
  • Which usually costs $millions (all investors) and often takes 5 to 10 years
  • One data point = $millions and a decade -the 3rd reason learning to be an angel is difficult and expensive
  • The current exit rate for all angel-backed companies seems to be around 2 – 3%
  • I believe we can get to 5 – 6% which would more than double our returns
  • My hope is that we can get to 10% eventually
  • Here are some ways we can improve our probabilities of successful exits