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Angels (1)

BusinessJuly 7, 2021

From angels to zebras: An alphabetical guide to NZ startup investing

Guest writer
Angels (1)

For a newbie to startup investing, having all those arcane Silicon Valley terms thrown at you can be off-putting. Here’s a handy guide to what they actually mean.

Angel

Also known as seed investor or angel funder, an angel investor is typically a wealthy individual who provides capital for a startup in its early stages. They often organise themselves into angel groups or angel networks, such as the Tauranga-based Enterprise Angels.

Bonus A word: Accelerator – a programme in which startups are offered mentorship, resources and investment to “accelerate” their progress. An example is the Māori-focused Kōkiri accelerator.

B

Blackbird

An Australia and New Zealand venture capital fund that specialises in tech startups. With more than $1b of capital committed, Blackbird Ventures is the largest VC in Australasia.

C

Crowdfunding

The practice of funding a project or venture by raising small amounts of money from a large number of people, typically through the internet and social media. This can often involve family members and friends. Notable websites include Kickstarter and GoFundMe, and Snowball Effect and Givealittle in New Zealand.

D

Deal flow

The rate at which business proposals and investment pitches are being received. If a VC has healthy deal flow, then business is booming.

E

Elevate

New Zealand’s government-backed fund, which invests in venture capital firms looking to make $2-$20 million investments directly into high-growth New Zealand startups. It plans to allocate $300 million over the next five years.

F

Founder

A person or entrepreneur who comes up with an idea and then turns it into a startup. They often stay on with the business, becoming the CEO or a senior team member.

G

Gamification

A popular practice in startup culture where points, rewards and other gaming elements are integrated into tasks as a way to incentivise participation, competition, productivity and loyalty.

Bonus G word: Global from Day One – a NZ Venture Capital firm that invests in tech-heavy Pre-A and Series B stage companies, and whose third fund worth $140m is about to close.

H

Hackathon

An event in which tech people, entrepreneurs and business minds come together to work on digital projects and foster creativity and innovation. It is a combination of the words hack and marathon.

A hackathon in Jeddah, Saudi Arabia (Photo: AMER HILABI/AFP via Getty Images)

I

Icehouse Ventures

A New Zealand early-stage venture capital firm with $165m of assets under management. It has invested in notable startups such Sharesies and Mentemia.

J

Journey

The lifecycle of a startup that typically goes from pre-seed stage to seed stage, early stage, growth stage, expansion phase and exit phase.

K

KPI

Key performance indicators. A set of quantifiable measurements used to measure a startup’s or employee’s long-term performance.

L

Lead

The lead investor is the person who represents a group of investors during a funding round, and acts as a link between the startup and the group.

M

Movac

New Zealand’s largest and longest-running VC fund. Active since 1998, it has invested in notable companies such as Tradify, Vend, Timely and Trade Me.

N

Networking

The all-important practice of building relationships that investors, founders, and entrepreneurs must do to create opportunities.

O

Onboarding

Weird new trendy word that basically means “to hire”.

P

Pitch

An entrepreneur or founder’s presentation of their startup’s vision and business plan to a VC, with the aim of receiving an investment.

Q

Question

A sentence worded to elicit information, especially when a tech person starts using fancy esoteric jargon.

T

Traction

Proof that a startup is developing and growing and gaining momentum.

R

Return on Investment (ROI)

A measure of a startup’s efficiency and profitability, it is typically what investors will eventually want to see after they fund a startup.

S

Seed

The early phase of a startup. Seed funding is the first official stage in which entrepreneurs approach investors including friends, family, and angel investors to find financial support for their concept.

Bonus S words: Series A and Series B – the stages of funding following the seed round. They typically see increasing amounts of capital invested.

T

Term sheets

The contractual terms and conditions of an investment given to founders by investors.

U

Unicorn

An exceedingly rare and almost mythical privately held startup valued at over $1 billion. Examples of unicorn startups include Tesla and Airbnb.

Unicorn (Photo: Getty Images)

V

Venture capital

Financing provided by firms to small, high-risk, yet innovative startups with large growth potential.

W

Wash-outs

A round of financing in which new investors effectively take control of the company from existing equity holders. A wash-out is most often a last resort for preventing bankruptcy, and is seen in emergency funding rounds.

X

Xero

A typically cited example of a New Zealand tech startup that went on to become a global colossus.

Y

Y Combinator

More Reading

    A famous US seed accelerator that has been used to launch more than 2,000 companies, including Airbnb, Dropbox, Twitch and Reddit.

    Z

    Zebras

    Startups that address social issues and create social impact, while also generating revenue – rather than super-efficient money-making machines like Unicorns.

    Keep going!
    Critical’s factory roof was ripped off and machinery was damaged by a tornado in June, 2021. (Photo: Justin Latif)
    Critical’s factory roof was ripped off and machinery was damaged by a tornado in June, 2021. (Photo: Justin Latif)

    BusinessJuly 3, 2021

    ‘Opened like a can opener’: Tornado destroys recycling startup’s roof

    Guest writer
    Critical’s factory roof was ripped off and machinery was damaged by a tornado in June, 2021. (Photo: Justin Latif)
    Critical’s factory roof was ripped off and machinery was damaged by a tornado in June, 2021. (Photo: Justin Latif)

    A South Auckland startup hoped its innovative recycling techniques could kick-start a revolution to end plastic pollution but, as Justin Latif reports, any such dreams came to a crashing halt when a devastating tornado tore through its premises last week. 

    Rui Peng wants to end plastic pollution.

    But a wild tornado has pushed pause on those plans for now. 

    Peng and his business partner Adam Ransfield run Critical, a clean technology business that takes plastic waste Aucklanders put out on their kerbs and turns it into beautifully designed furniture and products for interior design fit outs, thanks in part to seed funding from Auckland Council. 

    The pair had been working since April on setting up a factory in Papatoetoe, which, according to Peng “is like nothing else in New Zealand or Australia”, and they were days away from beginning large-scale manufacturing. So when the entrepreneurs entered their site on the morning of June 19, Peng admits some tears were shed upon seeing what was left of their roof. 

    Along with the roof, the floor of Critical’s factory was flooded and machinery was water-damaged (Photo: Supplied)

    “Initially I just swallowed my emotion, because we had to clean up and get rid of all the hazards,” he says. 

    “But it wasn’t until later, when we had some mates come around and we were all silent for a bit that I just started to feel everything and had a bit of a sob. 

    “But Adam was quite different, he broke down almost immediately and then picked up over the day, as I started to go down.”

    Peng says he’s particularly heartbroken for the wider community of Papatoetoe after the massive tornado reaped a path of destruction through the suburb, damaging around 1,200 homes and killing one man. 

    “From what we’ve been told, after the tornado dragged down the car dealership’s sign next door, it skimmed past our building, exploded our office windows and opened up our roof like a can opener, ripping a hole in the skylight.”

    Peng, who founded Critical in 2013, has been juggling his day job as a services design manager at Ernest and Young, alongside the dream of coming up with solutions to ending plastic pollution.

    “Up until last Friday night, our factory was completely set up with the machinery ready to go, racking and workspaces installed and tools in place. We were a button’s push away from going live and on the cusp of a big environmental impact for NZ’s plastic pollution crisis.”

    The Critical factory before a tornado wrecked havoc on its roof (Photo: Supplied)

    Peng says if the factory is able to be restored to full capacity, it could process 153 tonnes of hard-to-recycle plastic waste like plastic bags, straws, packaging. But unfortunately they were still in the process of negotiating insurance for their machinery so have had to turn to crowdfunding site Give-A-Little to get their finances back on track. 

    Peng says one silver lining to all the drama has been the support of family and friends.

    “We’ve invested everything we had into this. Our money, our heart, soul, blood, sweat and tears all went into setting up our one-of-a-kind factory.

    “But right now, I’m just feeling grateful, just realising how privileged we are to have such good people around us. 

    “We’re optimistic we will recover, and while we don’t know what the timeline will be, or what the costs will exactly be, when Saturday hit, and then all our friends and family came around, it struck me that we’re not alone.”

    Rui Peng with the plastic waste that gets recycled, and a table and chair made out of recycled waste. (Photo: Justin Latif/Supplied)

    Following the tornado, Auckland Council and the government have promised $100,000 each to a Mayoral Relief Fund to support people and families experiencing hardship due to the tornado, with a further $60,000 being added by the Ōtara-Papatoetoe Local Board.

    Board chairperson Apulu Reece Autagavaia urges those affected by the tornado to use the fund.

    “This is ratepayer money going back to ratepayers who have suffered from the impacts of the tornado,” he says.

    “It is not a large amount considering the need, but it is everything left over from our end of the financial year, and what better cause to use this money on than to alleviate, even if in a small way, the stress and loss our Papatoetoe residents have suffered.

    “We urge people to apply and utilise the Mayoral Relief Fund – it’s your money.”

    Business