NZ expats a potential source of investment, says Kea survey
Kiwi expats are ready and willing to help plug the gap in New Zealand’s lack of investment capital, according to research released today by Kea New Zealand.
Monday, November 07 2011 || News || BY Mark Revington
Kea’s survey of 500 expats found 15% were strongly motivated to invest in New Zealand companies while almost 75% said they would be willing to help mentor or manage a New Zealand small to medium enterprise (SME).
Direct foreign investment in New Zealand has declined by $3 billion since 2006 and the Kea research shows considerable untapped potential in capital and expertise among New Zealanders living offshore, said Sir Stephen Tindall in launching the survey results.
“Most New Zealanders see economic growth as our best chance of achieving improved prosperity but growth requires capital and connections. This research demonstrates that significant increases in investment, and improved connections with global networks, can be achieved from Kiwis living overseas who remain committed to New Zealand despite their temporary or even permanent residence in another country.”
Angel investment is one sector in New Zealand going at a great rate, he says. The challenge now is to build connectivity to enable Kiwi SMEs to grow and go global.
“This is a call to action. This research confirms what we know, that there is potential ready to be tapped among Kiwis offshore.”
Kea’s survey, sponsored by the Bank of New Zealand and Auckland Tourism, Events and Economic Development (ATEED), identifies two challenges unique to New Zealand; the comparatively small size of many of our companies and the number in private ownership.
And while New Zealand is increasingly seen as a hotbed of innovation, many expats still regard Kiwi entrepreneurs with some suspicion. Criticism voiced in the survey shows that at least some expats view Kiwi entrepreneurs as shallow and unfocused.
The survey says the most consistently voiced roadblock is the attitude, values and behaviour of Kiwi entrepreneurs in the context of competitive global markets. Kiwi entrepreneurs are often seen as happier to protect the status quo rather than embrace opportunities offered by a global market.
Expats often think Kiwi entrepreneurs lack the ambition and passion necessary to grow a global business and often prefer to sacrifice growth in order to retain personal control.
They are said to lack commercial maturity and show naivety around investments and markets, have strategic shortcomings, and are reluctant to take advice.
Privately owned companies in particular are seen to suffer from weak governance.
On the other hand expats think Kiwi entrepreneurs are often capable and motivated to establish innovative and exciting companies.
Sir Stephen rejects the criticism of Kiwi entrepreneurs and reckons perception has trumped reality.
“I get up to a dozen approaches a week and I find that the level of commercial skill around many start-ups and companies is good. Unfortunately the perception is that New Zealanders are low in commercial acumen. We have to change that.”
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To be an investor in any market one needs to actually invest. Too many so called "investors" never invest. I suspect of the 15% who said they would invest if more than 10% (1.5%) overall actually wrote out a cheque that would be surprising.
Too often i hear people say there is plenty of capital --- for the right opportunity. The issue is that the investor needs a reality check ---- if you want VC returns take the risk. You can not get 20%+ pa returns from putting your money into a sure fire project. This leads to the view from many that the issue is the company - when in fact the issue is with the investor. A startup is a startup - it has real risk - if you are not interested do not say you will invest in startups.
The survey results would be great is they asked how many of the 15% that "would invest" have actually invested. Until you invest you are not an investor - you are an observer.
Posted by Anonymous at 17:36 on November 7, 2011
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