November 2004

Dear NZVCA colleague,

The month started with a bang with our 3rd Annual Conference in Auckland on November 4. We had a great turnout this year with 170 delegates representing a diverse range of venture capital and private equity industry participants. The obvious energy and enthusiasm amongst delegates extended to the late hours and I believe that the success of the day speaks volumes for the healthy state of the industry at present.

We have had some really positive feedback from conference delegates and we are now looking forward to next year and to building on this year's success. I would like to thank all of the speakers again for their fantastic input and effort. And of course, thanks also to all of the delegates who supported the conference. Please note that copies of all of the PowerPoint presentations made at the conference are now available in the "Resource Centre" section of the NZVCA website.

The industry has seen a good level of deal activity this month as well. Pencarrow investee company, Auckland-based tap, showerware and valving designer and manufacturer, Methven Limited, confirmed plans to list on the NZX market. ANZ Private Equity and The National Bank announced a $10.0 million debt and equity investment in the Green Acres Franchise Group. And during the month Auckland-based technology companies Esphion Limited and Argent Networks Limited announced that they had successfully completed capital raisings from both TMT Ventures and No 8 Ventures.

Finally, make sure you take a moment to quickly review details below of some excellent events coming up and other relevant industry initiatives. If you own or advise a design-led business there is a superb opportunity for you, or your client, outlined below as well!

In conjunction with Negotiation Lab from the USA, on 18 and 19 February next year the NZVCA will be running an Art of Negotiating course specifically focusing on the venture capital and private equity business environment. The event is being held in the Stamford Plaza.

"What if you had the ability to transform every negotiation into a win-win deal that not only gets you want you desire but also strengthens the business relationships you have worked so hard to establish? Venture Capital and Private Equity investments don’t have to be win-lose. NLab will show you how.

For the first time outside of North America, the same company that has given top executives at ESPN, Disney and other major US corporations the keys to success at negotiating is coming to New Zealand for a limited engagement on 18-19 February, 2005."

Target Market: Who should attend?

Anyone who is involved, currently or potentially, in a venture capital or private equity transaction (the giving or taking of money or in an advisory role) – fund managers, investors, attorneys, accountants and investment bankers – the Art of Negotiation will equip you to launch to the next level of effectiveness.

Full course details will be set out in a brochure that will be sent by e-mail to you within the next couple of days. Details will also be available in the "Events" section of the NZVCA website. All registrations must be made online at the NZVCA website or by posting a completed application form (from the brochure) back to us. Don't hesitate to call me (09 312 5218) if you have any queries about this course.

AMCHAM still have some seats left for this excellent breakfast event on Tuesday 7 December in Auckland. Four speakers from leading companies will be discussing how to succeed in the USA. The speakers are:

Dr Paul Cossum, CEO, Proacta

Stephan Spencer, Managing Director, Netconcepts

Neville Jordan, Executive Chairman, Endeavour Capital

Nigel Kirkpatrick, CEO, Industrial Research Limited

A marketing flyer for this event is attached. Please register direct with AMCHAM. Registration details are set out in the flyer.

Have a look at the attached brochure for full details of the event being held in January. The Workshop has been generously supported by its sponsors and it looks like excellent value. This will no doubt be highly relevant to many NZVCA member investee companies or clients and so please feel free to pass the brochure on to anyone else that might be interested.

Again, full registration details are set out in the attached brochure.

"You are a rapidly growing company with excellent technology and a compelling value proposition. Your current customers - who are mostly local - want you to be successful and are enthusiastic about your solution. You have bold aspirations to become a truly global player but how do you get the help you need? This two day workshop offers an opportunity of unusual value. Ken Morse, Senior Lecturer at the Massachusetts Institute on Technology (MIT) and MD of MIT Entrepreneurship Centre will distill the knowledge of his vast networks of CEO's and global sales executives to assist New Zealand innovative high growth companies to grow."

Better by Design is a programme being developed by New Zealand Trade and Enterprise to help New Zealand companies grow their profitability and competitiveness in export markets by increasing their design capability.

Creating design-led businesses

Better by Design works with the CEOs and senior managers of medium sized companies to create “design-led businesses” - companies with structures that ensure products and services designed to world class standards are the consistent output.

Design-led businesses operate in every sector of the economy. They produce goods and services that have a consistent competitive advantage because they are better designed. Design-led businesses are never satisfied with the status quo, they maintain their advantage through a continuous process of incremental improvements to their culture, strategy, processes and products.

NZTE is looking for companies that meet the following criteria to enter into the programme to become design-led:

1. Does the company have a turnover of more than $3 million.

2. Does the company export at least 30% of turnover.

3. Does the company have significant growth potential.

4. Does the company have a differentiated product offering.

5. Does the company leadership recognise the importance of design as the main contributing factor in their future growth by including it in their strategic documentation.

If you know of companies that fit 4 of the 5 criteria above then please send details of the company plus their CEO to Stephen Gibbs, Design Strategy Implementation Project Manager at NZTE. Stephen can be contacted on 04 910-4319 or stephen.gibbs@nzte.govt.nz

We welcome the following new members:

Trent Lash (Endeavour Group) – Associate member

bizAngels Manukau – Angel member

We last reported on this in the September newsletter. At that stage IRD and MED were both actively working on this initiative with the aim of being in a position to make final policy decisions by the end of the year. We are pleased to report that IRD and MED are indeed on track to meet the end of year timeframes. The NZVCA's Tax/Regulatory sub-committee has been working closely with MED in particular over the last 7 months to help design a suitable Limited Partnership model for New Zealand. Again, we are very pleased with current progress with this aspect of the reforms. New Zealand has a great opportunity to introduce a truly world-class internationally recognised Limited Partnership regime and this primary goal remains the key overall focus for the NZVCA.

The NZVCA is hopeful that new Limited Partnership legislation will be enacted in the middle part of 2005 with the tax changes needed to make the Limited Partnership regime fully effective following as soon as possible thereafter.

We will keep you updated on progress.

Chris Twiss
ex NZVCA