Why US investors invest in New Zealand companies

Investment Fix is a podcast series from New Zealand Trade and Enterprise (NZTE) for New Zealand companies in growth mode, needing to understand their investment options.

This season, host Dylan Lawrence dives into the US market, considering the opportunities it holds for New Zealand companies, what it takes to grow a business and build a brand there, and how to secure the funding needed to make it happen.

This episode features US venture capitalist Rob Coneybeer and Kiwi tech entrepreneur Guy Horrocks – co-founder of the world’s first iPhone app company and US-backed data company Solve – discussing the reasons behind US investors' interest in New Zealand companies. 

Here’s a precis for episode four or listen here.

The discussion begins by exploring the connection and attraction between the New Zealand and US markets. Coneybeer points out that successful New Zealand companies seeking US investors must have a global outlook and be competitive on a global scale. The conversation touches on the challenges of timing when entering the US market, emphasising the importance of early market entry balanced with preparedness.

Horrocks shares his experience of moving his business to the US and the advantages of the US market's size and openness to New Zealanders. The discussion further explores the unique appeal of New Zealand's brand to US investors, highlighting the cultural closeness between the two countries, and the perceived ability of New Zealand to move and make decisions quickly.

The conversation transitions to the criteria investors look for in potential investments. Coneybeer emphasises the need for companies to have the potential to build large, valuable businesses and addresses the importance of a stable financial and governmental environment. He looks for entrepreneurs who are aware of global competition and cites examples of successful New Zealand companies with unique value propositions.

Horrocks, drawing on his fundraising experience with Solve, discusses the importance of providing value and building relationships before making funding requests. He shares strategies for successful fundraising, including treating potential investors as if they are already part of the business and maintaining consistent communication.

Coneybeer emphasises the importance of early engagement with the US market, urging entrepreneurs to visit sooner than they think they should. He highlights the significance of active participation on LinkedIn to connect with potential investors and suggests leveraging affiliations with New Zealand colleges or universities when networking.

Preparation for investor meetings is stressed, emphasising the need for a balance between confidence in one's product and realistic expectation management. The discussion underscores the vast difference in scale between the New Zealand and US markets, both in terms of customers and investors.

When asked how New Zealand companies can demonstrate the scale US investors seek, Coneybeer and Horrocks agree that having US-based customers is crucial, with the added benefit of establishing connections that can vouch for the company's excellence.

Horrocks shares his experience with fundraising for Wellington-based mobile marketing company Carnival, emphasising the need for New Zealand entrepreneurs to avoid delaying their entry into the US market, as competition may intensify. The importance of having local investors or partners on board before approaching US investors is discussed, providing a level of credibility and de-risking in the eyes of potential investors.

The conversation touches on the significance of building and scaling networks, with Horrocks advocating for community-building and warm introductions. He recommends attending events like Flat White meet-ups to establish connections. Coneybeer emphasises the need for physical presence, suggesting a minimum of three to five trips per year to the US for effective networking.

In terms of advice, Coneybeer stresses the importance of securing US customers before raising funds and leveraging existing networks for warm introductions. Horrocks adds the necessity of getting on a plane early, avoiding delays in entering the market, and taking advantage of every trip to maximise ROI.