Angel investor Basil Peters spent the first half of his career as an entrepreneurial chief executive. He tells business editor Dene Mackenzie his focus is now on how entrepreneurs and angel investors exit transactions.
The country had an international reputation as a strong, well-funded investing community and the reason was the high level of angel investors from this country investing around the globe.
As an example, Mr Peters, from Vancouver, said at a angel investing conference in Silicon Valley last year, 23 New Zealand angel investors were there, more than from any other country other than America.
''New Zealand has a very activit angel community. They really get it here.''
Mr Peters was in Dunedin to attend the 2013 Angel Summit which finished yesterday. Angel investing involves investors with available money pairing up with entrepreneurs who have a small company, sometimes struggling for cash to expand.
Mr Peters said having being an angel investor and a fund manager, he realised that when he had made an exceptional return on investment, it was always because the exit went well.
His mission in Dunedin was to increase the percentage of entrepreneurs and angels who sold their companies at the peak, then using the funds from the sale to move on to other investments.
Only about 25% of companies were sold in an exit strategy, giving the angel investors and the entrepreneurs a profit, Mr Peters said.
That left 75% of companies that grew in value, but the investors and entrepreneurs would not exit.
''If they fail to exit, it is a lost opportunity and the most likely thing that will happen is the company will fail. It is a fatal mistake to not sell at the right time and it's hard for entrepreneurs to understand.''
He had seen valuable companies flourish and grow for several years before the slide started, usually ending with the company failing.
At its peak, the company could have been worth $50 million to $100 million but the investors and entrepreneurs failed to see the opportunity to sell.
Selling to another investor usually saw a fresh investment of capital and ideas, he said.
When Mr Peters set up his first company, Nexus Engineering, he did not understand about having an exit strategy. One was never mentioned at the board table in 10 years. If he had known about the strategy, he would have likened it to selling one of his children. There was a sentimental attachment to something an entrepreneur started which made it hard to give up, he said.
However, eventually, he did sell Nexus to Cisco. The company was still operating and some of the people he hired straight out of college were still working for it.
''I'm glad not to have to run the enterprise I created. I am glad to be doing other things. Since then, I have worked with 50 other companies.''
Mr Peters said if he could raise the percentage of exit strategies for New Zealand companies from 25% to 50%, it would significantly increase the amount of money available for reinvestment.
''You will see economic growth and more companies started, giving better jobs for our children and grandchildren.''
Basil Peters
Angel investor and entrepreneur.
• Vancouver born and raised, still lives in the city.
• Aged 61, Married with two daughters.
• Founded Nexus Engineering while still in graduate school. The attention generated by the company led to several awards including Entrepreneur of the Year, Entrepreneurship Silver Award, British Columbia Science and Engineering Gold Medal and Business Leader of the Year. Nexus was sold in the mid-1990s and is now part of Cisco.
• This is his first visit to New Zealand
