An insight into angel investment

SUPPLIED

ENLIGHTENED TALK: James Madelin, left, founder of Enlight Photo which invented the Orbis ring flash, gets a few tips from veteran angel investor Bill Payne. Mr Payne was the headline speaker at the Power of Angel Investing seminar in Hamilton this week.

Relevant offers

Waikato investors who take a punt on untried start-ups may be angels but they are still looking for a good return on their money.

The Power of Angel Investing seminar held in Hamilton this week gave a range of investors, high net worth individuals, accountants and other service professionals and entrepreneurs a thorough grounding in the high-risk, high-return investment strategy.

One of the drawcards was United States angel investment guru Bill Payne, who has been investing in and starting up high-value industrial and technology companies for 30 years.

Mr Payne was assisted by panels of industry professionals able to give a perspective on New Zealand trends.

Seminar organiser Rory MacGillycuddy said it attracted people from across the North Island, and the seminar had shown the depth of talent amongst Waikato's professional service firms.

While the seminar had been aimed at high net worth business people, Mr MacGillycuddy said entrepreneurs had also gained insights – especially into what motivated investor demands. "It will help entrepreneurs prepare for the discussion [with investors], because often they have no idea what they should do," he said.

"They have to stay focused on what they want over and above the money."

Having started a career as an angel investor after selling his industrial ceramics company to DuPont in 1981, Mr Payne is currently the BNZ University of Auckland Business School entrepreneur in residence until June.

While admitting that decisions were often "influenced by emotion", Mr Payne said he generally looked for companies that had the potential to increase their net worth by about 30 times the value of his initial investment, because most would fail to have much or any return.

"Then if I get 15 times, I feel quite good," he said.

Despite high stakes angels tended to make emotional decisions because business mentoring was usually part of the investment deal, he said.

Mr Payne also spoke at the Element Emerging Leaders group breakfast and attended a NZ Bio function.

- © Fairfax NZ News