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Bringing home the bacon: enhancing investment in your region
Challenges of Maori land
- Dealing in regions where there is a lot of Maori land raises particular challenges.
- multiple ownership;
- non-existent, inappropriate or inefficient structures;
- lack of specialist knowledge and skills; and
- lack of capital or ability to raise capital.
- Landowners undertake the development themselves in a joint venture/partnership â?? this is often the best choice.
- Joint-venture/partnership requires input from landowners (land, assets, people, capital) and JV partner (capital, skills and expertise, market contacts, industry knowledge and networks).
- Issue: selecting the JV partner.
- There is a shift between older and younger generations regarding expectations of land use, returns, and even between leasing and freehold sale of land.
Angel Investment
- Angel investment is early stage equity investment in small, start-up companies. It works best in syndication (networks of angel investors)
- There are many benefits of syndication:
- First time investors gain experience;
- Access to follow-on investment if needed; and
- Portfolio diversification.
- Investment outside investors sector of preference.
- Passive investment when investors are fully employed.
- Reduce risk (match risk profiles).
- Angel networks play an important role:
- Improve visibility (of potential investments);
- Improve the quality of deal flow ("investment ready" firms);
- Improve the professional approach of investment; and
- Provide syndication opportunities.
- Rationale for regional networks of angel investors:
- Investors have a regional focus, networks should as well.
- Investors must know each other to syndicate.
- Communities provide a reputational discipline on both the investor and the entrepreneur.
- How to build a network:
- Identify investors (e.g. via an education course).
- Convince them of syndication benefits (find a leader).
- Increase the quality and quantity of deal flow (e.g. link with NZTE Escalator programme).
What regions can do to attract investment
- Easier to retain Brownfield investment rather than attract Greenfield investors â?? don't forget to look after who youâ??ve got!
- Regions must improve their ability to clearly articulate their value proposition in order to attract quality investment (e.g. Canterbury Development Corporation is very proactive at identifying investment they want and then going out and getting it).
- Demand for technically qualified people (e.g. engineers and trades people) therefore must develop and invest in the skill base in your region.
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