New Zealand start-ups have proud history of innovation, but with that comes the challenge of seeking funding to turn your innovation into a successful business.
There is a lot to like about Silicon Valley entrepreneurs, and they certainly can be a great source of inspiration, but cultural differences mean there's a real risk things may be lost in translation. New research confirms New Zealanders looking for external investment shouldn't slavishly copy the way US start-ups pitch for funds.
It should come as no surprise that New Zealand investors care more about the path to market, particularly export markets, and your balance sheet than hearing about your passion and broad vision for changing the world.
The study suggested some reasonably simple, but often overlooked, tips when seeking external funding:
- Kiwi investors aren't the same as US ones, tailor your pitch to suit your audience.
- Do talk about international sales, or your path to export markets.
- Do include reasonably detailed financial plans.
- Don’t expect funds to fall into your lap even if you have a good business plan / pitch. Good things take time. This isn't Shark Tank and New Zealand investors prefer to get to know you and build relationships.
- Do showcase your and your team’s experience: investors love a good track record.
Massey University Researcher Hattaf Ansari has surveyed a group 88 early stage investors, angel investors, venture capitalists, members of crowd funding groups and other private investors and found they have a different demands from their American counterparts. Ansari found that the size of the US domestic market made pitches there less focused on financial details and more concerned with the passion and visions of the entrepreneur. The survey of New Zealand investors, however, found they were more focused on entrepreneurs who targeted the international market and who presented strong financial data. They also took more time to build relationships rather than making judgments based on the first pitch.