The Aspire NZ Seed Fund (Aspire Fund) invests into New Zealand seed stage technology companies alongside angel networks and other private investors. The Aspire Fund is structured as an evergreen fund that can continue to invest indefinitely as long as it generates returns. The Crown mandate for this fund stipulates that all investments must be made alongside a private investor that is leading the round, and that there are investment caps of $12 million per year and $1.5 million per portfolio company.
Our in-house investment team has discretion over the investment thesis and process of the Aspire Fund. The thesis and process are laid out in more detail below but at a high-level we are looking to invest into very early stage New Zealand technology companies with the potential, and ambition, to solve global scale problems. The fund invests into companies across all regions of New Zealand and almost all sectors, provided that there is underlying technology that gives the business the potential to scale rapidly. The Aspire Fund invests on the same terms as other investors through equity ownership or convertible loans where appropriate.
The Aspire Fund was established by the Crown in 2006 to accelerate the development of the angel investment sector. The initial incarnation of this fund partnered with a number of New Zealand angel groups and then co-invested with these groups into the seed stage technology companies that they had decided to invest into. This injection of public funding allowed angel investors to spread their own investment dollars into more companies. Between 2006 and 2017, angel investment grew from almost nothing to over $100 million in annual investment.
In 2017 the Crown reviewed the objectives and mandate of the Aspire Fund. The fund was restructured in order to fill a number of gaps in the seed stage investment market. These changes included; allowing the fund to invest alongside a wider group of partners, and giving the Aspire Fund team control over investment decisions. These changes allow the Aspire Fund to provide additional investment support to top-performing companies as well as to work on bringing new sources of private capital into this space. The Aspire Fund is now structured as an evergreen fund with an annual investment cap of $12 million. The fund must generate returns in order to continue to make investments into the future.
The Aspire Fund is structured as an evergreen fund, so we need to generate a return in order to continue making investments. In addition, we believe that by generating returns we can help to prove that seed investing in New Zealand is a viable asset class and thus attract new sources of private capital into this space. We have developed an approach to portfolio construction that is designed to support a large number of New Zealand companies but to allocate more of our capital to the successful companies that will deliver returns. This is achieved by making a large number of small investments into seed stage companies and then providing follow on investment to those companies that hit their growth milestones.
The Aspire Fund has a broad investment mandate with no specific region or sector focus. We are looking to support seed stage New Zealand technology businesses that have the ambition to scale globally. We make our investment decisions based on the following criteria:
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Early-stage companies looking to raise capital should approach us for an initial discussion at the start of their capital raising process for confirmation on eligibility, impartial advice and introduction to other potential investors.
Our investment team undertakes initial diligence and presents the opportunity to our screening committee. If the opportunity fits with our investment thesis and there is a potential lead investor, then the deal is approved to move into due diligence.
Our investment team works alongside other private investors to conduct due diligence on the investment opportunity that is appropriate for the size and stage of your company. As a co-investor, we rely on the lead investor(s) to negotiate key terms.
The Aspire Fund Investment Committee reviews the deal against our investment thesis, portfolio allocation tools and decides whether to make an investment. For any investment that is declined, we provide constructive and timely feedback.
A legal review of deal documentation is complete prior to final investment approval for all deals approved by the Investment Committee. Market deal documents, used by most New Zealand investors, are available below or on the AANZ website.
Final documentation is agreed and funds are transferred once we have confirmed that matching funds have been received from other co-investors.
19 Feb 2020
19 Feb 2020
19 Feb 2020
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