Jenny Morel on 20 years in the tech industry

Business is Boring is a weekly podcast series presented by The Spinoff in association with Callaghan Innovation. Host Simon Pound speaks with innovators and commentators focused on the future of New Zealand, with the interview available as both audio and a transcribed excerpt. This week he talks to Jenny Morel, founder of Morel & Co, No 8 Ventures, and most recently, MORGO – an annual gathering of people building high growth companies going global.

Today’s guest started working in the tech sector 20 years ago, before many people knew New Zealand even had one.

Coming from investment banking, she first founded Morel & Co as an investment company to work with technology firms, followed by No 8 Ventures, the first US-style venture capital fund in New Zealand. On the side, she also founded Morgo, a high-energy retreat and recharge for CEOs building tech or high-growth companies going global from New Zealand or Australia.

To chat the journey, the industry today and her experience, Jenny Morel joined the podcast.

Either download this episode (right click and save), have a listen below or via Spotify, subscribe through iTunes (RSS feed) or read on for a transcribed excerpt.

So tell me first up, what got you to start Morel & Co and then not long after, No 8 Ventures? What was the state of the local tech scene then?

My background was in investment banking in the UK and in New Zealand, and for a while, before I started Morel & Co, I had been doing freelance corporate finance and had a number of company directorships, which comes into the story later.

I decided I wanted to start my own business and not just sell my hours, and the only thing I knew about was investment banking. So I started a small investment bank! In the meantime, I had formed another form of technology and initially, that was actually biotechnology through being on the board of AgResearch, the largest research institute in New Zealand. I thought ‘wouldn’t it be fantastic to help some of these biotech spinouts get going?’ I soon found that there was a very small biotech market in New Zealand.

But the characteristic of biotech companies was kind of shared by other tech companies – they’re based on IP, and IP crosses boundaries really easily. So if you’re not going to do it here, it’ll be picked up somewhere else in the world. They can scale very very fast, but they need money to do that. And the money is very hard to raise because they have intellectual property which is intangible. So all of these characteristics were based off biotech.

Our market research before starting on my market research, before starting Morel & Co was anecdotal. It was a friend from a multinational saying they wanted to buy this company, but they couldn’t get an advisor, so the negotiations were kind of difficult. And I went: ‘Oh, really? No advisor for the tech company? That’s wrong.’ It was really just anecdotal.

And so, I thought it would be fun. I did not have great market research, I just thought it would be fun and I thought I would hire one other person to do it with me initially. But instead, I found a real senior deal-doer and a really good junior guy. So we set out with three executives and one support person, and we had a lot of fun.

It was amazing. We started building then, a database of New Zealand technology industry and at the end of the first year, we had six hundred companies on that database. We didn’t know there were that many companies out there, we were just finding them, and a lot of them were small and local – we started doing studies in different sectors, like knowledge management companies.

We were trying for completeness – we wanted to get every company into this database. We had to give up that idea at the end of the second year. We had two thousand companies in the database.

That’s remarkable. And how soon into that journey of working with those companies was the need for capital and the kind of capital that understood the timelines and investing ahead for revenues,  the difficulty of tech companies, or research companies needing to have patents in the workWas there the capital market and support around it?

No, and there still isn’t.

Obviously, it’s improved enormously. When we set out with Morel & Co, I said we weren’t going to have a venture capital fund, and at the same time Caltech was starting a small fund and I gave them an investment, thinking this was good. We had an ecosystem of doing all sorts of things and in that first year of Morel & Co we raised money for three companies. But it’s horrible business, raising money. We’re putting our friends into these young companies.

You learn very quickly that all the investors need a portfolio. You love each one when you invest in it but not all of them are going to succeed, so the investors should always have a portfolio.

The companies all wanted help as much as they wanted money. So my senior deal-doer got 20% of his time sucked out for free advice from one company. And that’s an interesting staff training exercise, but it’s not a viable business model.

We actually made money by selling companies, mostly. But we did some company restructuring, we designed the first US-style employee option scheme in New Zealand, and helped people implement that. We helped people streamline, manage negotiations, and we did other things apart from the capital raising.

One year later, I was lying on the beach in January. I had a friend from the US, Don Campbell, who then was running something called Hambrecht & Quist Guaranty Finance, and Don said, “Jenny you gotta get yourself a fund.”

And then I realized Don was right. We’ve gotta do a fund. To do these things, the investors had a portfolio, you were actually being paid to get involved and give advice to the companies within the structure, and also you had access to follow-on funding. Every time a company wanted to raise more money, there was a six month stock with the company at the end.

And that was the beginning of No 8 Ventures.


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