Angel HQ presentation to the Pasadena Angels

Dave Moskovitz from Angel HQ is in the US at the moment, and while he was there he met with The Pasadena Angels.  Building international connections is key for Angel HQ – to help us source smart capital for those companies we’d like to grow into the US market, for one.

Here’s Dave’s speech – which gives you a great overview of our club’s activities and highlights the key reasons those international connections matter…:

My name is Dave Moskovitz, and I’m an angel investor and serial entrepreneur.

I was born at Huntington Memorial Hospital here in Pasadena, but I’ve been living in NZ since 1982.

I bring warm greetings of the board of my home club, AngelHQ in Wellington, and from Phil McCaw, the Chair of the Angel Association NZ.

I’m the Chairman of WebFund, a privately held seed fund / incubator specialising in online startups and also the Chairman of our portfolio company MusicHype, which is in the process of setting up offices here in LA.  The main purpose of my trip here is establishing industry relationships, interviewing potential hires, and meeting potential follow-on investors.

Today I’m here to talk about trans-national angel investment.  I would like to see, and am personally committed to working toward strong relationships between NZ and California early stage investors and entrepreneurs.

It is a truism that angels don’t like investing in companies far away from home.  That said, many NZ companies aspire to prove their concept in the excellent test market that is NZ, and then scale in the US market, which becomes their new home.

NZ may only have a population of 4m people, but it has a very vibrant early stage community, largely thanks to an excellent education system that produces world-class graduates, excellent social capital resulting from high levels of trust between individuals, and the “kiwi ingenuity” that results from a history of living on islands isolated from the rest of the world by large stretches of ocean.

My home town of Wellington (the capital) only has 200,000 people, but we have three active incubators and a dozen different organisations and groups that service the early stage scene.  We’re home to Peter Jackson’s Weta Studios, and this hub of creativity creates a culture of innovation that permeates the community.

Our Angel Association comprises 15 clubs and institutional investors.  In the 12 months to June 2010, USD 40m was invested by angels in 80 deals, more or less evenly split between first round and follow-on, with nearly three-fourths of deals syndicated.  Nationally we’re known for excellence in web services, digital media, bioactives, and functional foods.

My own club, AngelHQ, has been going for just over 2-1/2 years, has 28 members, of whom 15 have made more than one investment.  In calendar 2009 and 2010 we’ve made 7 investments to the tune of just over $1m USD.  Almost all of these were syndicated.  Companies included a mobile content delivery platform, breast screening software, a cloud computing platform, an on-line children’s game-world focusing on environnmental issues, a marine collision warning system, and a semiconductor manufacturing facility.

Valuations in NZ are significantly lower than US companies.  MUCH lower.  As an asset class, angel investment is very underdeveloped; we don’t have the same degree of investable wealth or risk appetite as you have here, but we do have the same levels of entrepreneurial drive.  And nearly all of our early stage companies want to jump the Pacific to be active in the US market, and we would love to have some aligned smart money on deck to help companies make that transition.

If active investment isn’t your thing but you would still like exposure to early stage NZ companies, there are three different angel funds you can invest in.

I fell in love at first sight with NZ, with its low population density, pristine natural beauty, friendly locals, great infrastructure, and excellent cultural and entertainment opportunities.  It’s a great place for a getaway or bolt-hole, and it’s straightforward to gain residence as a foreign investor.  Last year the World Bank rated NZ the 3^rd easiest place to do business, and the easiest place in the world to start a business.  Oh, and there’s no capital gains tax.

The Angel community is close-knit and very friendly, even between nominally competing groups, and if you come for a visit we’ll all roll out the red carpet for you.

I know this has come out sounding more like a pitch than I really intended, but the desire to cooperate, learn from each other, and most importantly to do great deals together is totally genuine.

If you’d like to know more, please come see me after the meeting, and let’s start a relationship.