This article from the New Zealand Herald poses the question – why can’t small businesses get the capital they need to grow? While it is a tired narrative that we don’t have enough capital in New Zealand to support businesses, in recent times there has been a huge groundswell of capital becoming available at the earliest stages of the business life cycle. There are lots of angel groups now, and there is growing interest in investing beyond property and into private equity. If the money is there, then why isn’t it getting into the companies that need it?
The biggest challenge seems to be difficulty in actually understanding the investment opportunities, particularly in complex areas like life science and high-tech industries. A particular example highlighted in the article is Synthase Biotech, which will have to go to the ASX to raise the capital it needs because there isn’t enough informed capital here in New Zealand. That’s where the role of funds like Matū can step in to help bridge the gap between new start-ups and investors, helping investors get access to this fast-growing asset class.