Five tips when raising venture capital in New Zealand tech

The NZ startup scene has a few differences from how startup funding works elsewhere, even as the basic principles are global.

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New Zealand founders looking to raise venture capital face a raft of challenges, not least of which is physical distance from potential investors. What they do have in their favour is a generation of founders who are often willing to share their knowledge and organisations such as New Zealand Trade and Enterprise (NZTE) that are set up to help them follow the money.

NZTE investment managers Richard Campbell and Nadine Hill, together with Ambit CEO and co-founder Tim Warren, provided an introduction to the unique Kiwi VC scene during Techweek 2020. Their advice falls into five key areas for new founders to consider, noting New Zealand-specific considerations.

1. Plan your capital raising from inception

Ambit, a company founded in 2016 which creates AI chatbots, has just completed its third capital raise, undertaken over the COVID-19 lockdown. It has raised around $1 million in this round and has, for the first time, brought on an international investor from Hong Kong—Twenty Seven Ventures. Ambit has previously raised $500,000 and $1.8 million and it is unlikely to stop there. Warren says he has planned for six rounds of VC funding, with a round taking place every 12 to18 months.

“It’s rare that companies just raise a bit of money once and then become something huge and wonderful. I’ve just looked at what companies tend to do. It’s a five-year horizon—you’d can’t forecast beyond that,” he says.

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