Lessons from the New Zealand Seed Fund: New Zealand's venture capital pioneers

Abstract

Venture capital is highly correlated with economic growth and innovation, and is an area of significant interest to governments worldwide. New Zealand currently has a fledgling venture capital market, which largely stems from government’s involvement in the sector. Its small size and limited history are reflected in the scarcity of local literature, and industry is looking at ways to improve access to information on the market in order to increase interest and investment in it. This paper documents and evaluates one of New Zealand’s first venture capital funds – the New Zealand Seed Fund – and uses its experience to contribute to local literature surrounding New Zealand’s venture capital market. It uses data gathered from the research process to discuss the difficulties the local market faces in obtaining capital. It supports the finding in earlier literature that it is significantly challenging to find capital for venture capital funding locally, and it is suggested that an evaluation of local investment trends as well as the plausibility of finding capital overseas is required as a result. The report also discusses findings as they relate to the broader literature on university entrepreneurship and the relationships between start-ups and universities. It is suggested that many of the trends in university entrepreneurship detected overseas likely apply to New Zealand, and any future attempts to generate start-ups out of local universities may wish to consider that literature and the experiences of the Seed Fund.