An inside look at our $110m Fund

For the first time we are publicly releasing our Annual Report for our Growth Fund I. You may have seen this was picked up by the NZ Herald. (Founders: Not to worry, it did not contain granular portfolio company information.)

Below is a summary of key observations from the $90,191,707 which Growth Fund I has invested in 32 companies. Interested in learning more? Join me for an AMA on Zoom – 5pm Tuesday the 10th. RSVP here.

Releasing this report is an unusual move for a VC. There is a benefit to avoiding public judgement when investment time horizons are long and filled with uncertainties. We have been on the receiving end of plenty of skepticism of investments we have funded over the years. This was certainly the case for the first 5 years, 7 months, and 14 days between our first investment and Vessev launching their electric foiling passenger ferry. And at times it is still the case with Crimson Education , despite their team of >900 delivering incredible outcomes for students globally and generating $100s of millions in revenue.

It is easier to hide behind scripted and positive press releases. So, why release the report?

1. To celebrate the success of Kiwi tech companies. In light of plenty of economic malaise and challenges, companies like Halter, Hnry, Crimson, Tracksuit, Sharesies, Dawn Aerospace, and so many more have been bright spots in the news.?
2. To expand awareness and understanding of venture capital and startup investing. We believe New Zealand will be more prosperous if more Kiwis are aligned to the success of Kiwi tech companies – and that many more will engage if they are better informed.
3. To make our case why wholesale investors should support Growth Fund II . With >$85m committed we are nearing the final close. As the Fund I report outlines, our strategy has been validated and the team has executed exceptionally. Growth Fund II will leverage our momentum and experience to invest in another 20 Kiwi tech companies over the next three years. This final close is a chance for investors to have a stake in Kiwi startup legends like Crimson, Vessev, and Halter.

Thanks and please get in touch with any questions

10 Key Takeaways from our Growth Fund I Annual Report

1. NZ is producing great companies. A key question we faced when raising the fund in 2020 was if there were enough companies in New Zealand that merited growth capital. We were convicted that the answer was “Absolutely, yes.” To be fair to the skeptics, there were many fewer proof points than one could observe today. The commercial and technical wins of Halter, Dawn Aerospace, Hnry, Crimson, Tradify, Tracksuit, Sharesies, and Shuttlerock have truly put NZ on the map. Outside of our portfolio are many other Kiwi success stories like Kami, Auror, Robotics Plus, and Oritain. ? ?
2. “Venture capital is an asset class where the best assets choose their investors.” The tweet continues, “So spend less time trying to be a good picker and more time trying to be worth being picked.” We have seen a myriad of examples across 32 companies and 51 rounds including Tracksuit, Hnry, and Halter where founders have attracted way more capital than they could accept. A ubiquitous factor that influenced the founder’s allocations to prospective investors was relationship capital. All investors either have money, resources, experiences, connections, etc. or can claim to. In this context, most founders default to accepting capital from parties they know well.
3. Raise more than you think you need. Even established companies struggle to precisely model capital requirements. And they'll never be able to foresee all future opportunities and challenges. Several companies were materially hamstrung by supply chain delays in the wake of covid. That Open Star and Mint were able to assemble parts from around the world to launch their facilities was incredible. In two other cases, companies experienced near-fatal technology recalls…read more here.?