Angel Association chairman Phil McCaw’s got a big year in front of him – and echoing his daughter’s misheard words, has made some late New Year’s revolutions.
His wide-ranging thoughts are available here, and among one of his goals for the year is to support the government’s wealthy migrant programme.
“I truly believe it to be a game changer,” McCaw says. “There are some significant world leaders looking to invest in New Zealand and their real value will be in their ability to accelerate the companies they invest in, into their local markets.”
McCaw gives the example of Peter Thiel, the Paypal founder and recent investor in Xero and Pacific Fibre.
He’s also out to fix the ‘equity chasm’ – something that’s REALLY IMPORTANT (his capitals, but sticK couldn’t’ agree more). McCaw’s upfront too that his investment vehicle Movac is currently raising a new growth fund, so has a direct exposure and interest in these issues.
However, given the paucity and shallowness of those New Zealand vehicles capable or interested in investing in good ideas, that’s the least of the country’s worries.
McCaw wants to see some more success stories like Trade Me, Hyperfactory, 42 Below, IceBreaker, and Phil & Teds. This will encourage capital flows into the equity sector.
Without going into the depths of how the NZ Venture Investment Fund operates, McCaw is keen to see it morph from essentially a $2 private money matched by $1 public money (via NZVIF) to a $1:$1 ratio.
“The problem is that we have a very, very limited pool of private and institutional money in New Zealand and a poor overall story to tell about venture returns,” he says. “We’re stuck in a perfect storm and need this sort of bridge.”
He wants to confirm the tax free status of capital gains, as the current rules are vague and subject to interpretation, and to also enable tax deductibility on ‘early stage investments.
His thought piece says that the government should require institutional funds like ACC and NZ Super to allocate capital to the growth economy.
“I cringe as a write this, as any investment should ride or fall on the results it delivers,” he says. “The reality is, however, that the sector is immature in New Zealand and requires a long term commitment to the development of capability. These institutions have significant experience in the selection and oversight of fund managers and can bring capital, process and experience to the table.”
McCaw’s also worried that increased securities regulation will make brokers and advisers even more conservative (i.e. not look at early-stage high risk class of investments), and that Kiwi Saver Fund Managers should be encouraged to allocate capital to this class.
Finally, he wants more people with money to become part of Angel investment groups. While there’s nothing wrong with high net worth individuals investing on a case by case basis, “the challenge with this approach is it doesn’t scale and doesn’t build investment capability for New Zealand,” he says.
“In my view we need to have a quid both ways to manage risk.”
In actuality, McCaw’s daughter’s right – this would be a New Year revolution.
All power to him, his team and wider networks. Check out the original article, here.