 I just love that new recording. Kia ora kato, na mai hari mai. So greetings and welcome to this month's EHF Live Invest Session. So Edmund Hillary Fellowship is a collective of entrepreneurs and investor change makers who want to make an impact globally from Aotearoa New Zealand. So these are informal interviews and are planned in a way that you will leave here probably after the 60 minutes, hopefully feeling that you know the investor fellow is a bit of a personal level and what their intentions are for New Zealand. So this month you're here from Mark Veloski from NZBC. He's pretty lucky to get that name. When I saw that he had registered his fund as NZBC, I was like lucky man, how come no one in New Zealand thought of that? It's a new fund and it's run by operators and so Mark will take you through and explain why they're sort of saying that it's the first fund in New Zealand that's run by operators but first bit of housekeeping as I said before this is recording. Stay on mute unless you're asking some Q&A or put those questions in the chat and feel free, if you do need to leave just you can sort of give a wave out or just say thanks and we can send out all of the videos and stuff will be live on the website so you can see all past and next events that are coming up. So Mark, how about you just give us a little brief background on you as the person before we go into the fund? Who you are and where you come from? Sure, hi Michelle, thank you for the introduction and hello to everybody. Thank you for showing up and being interested in what we have to share here today. My background, actually I was originally born in Ukraine. I moved to America when I was nine. I spent a lot of time moving to different parts of the States. I lived in a lot of different places in America and I studied biology at Princeton and spent some time in Africa actually teaching kids using my biology knowledge to teach kids about global health and used a game approach to teach them about malaria and infectious disease down into this whole space of using games for education and went off to Oxford, started a PhD in computer science and was sort of teaching kids computer science on the side, pedacode basically and that became my first company basically teaching kids the fundamentals of how computers worked using games, using hardware product called the Raspberry Pi. They were basically building their own computers learning code and that became my first company. I started funding, dropped out of the PhD, moved to San Francisco and basically started this company called Piper and spent basically five years running the company. We raised about $15 million and I exited the company about three years ago and on that journey I learned a lot about both the kind of hardware education space, how to build a company. We were sort of at a time where a lot of these trends were really hot so we got a lot of traction. We shipped over 100,000 of these computers. Steve Wozniak endorsed the product. Elon Musk actually bought some for his kids. So it was quite an exciting time and after I finished that I sort of left the company, exited investors who are now running it with a focus more on schools than on consumers. I started thinking about what to do next and I spent some time travelling, spent some time in China and actually I was thinking of starting a new company. I did start a new company in a similar space and the intention there was to teach kids even younger how to code. I wanted to build that company basically with a remote first focus because it was really expensive to build an initial company in San Francisco in our burn rate kind of at 20, 25 people was around 200, 300 K among USD. So it was really high burn rate. What I realised was you can actually get to like a tenth of that burn rate if you were to build a fully remote first company. And so we're looking to do that and I was thinking of places where I would kind of I guess base myself and learn about EHF through that. I was looking at different places in the world and New Zealand seemed like a great sort of seemed like a very, I didn't know very much about the country but it seemed like a very kind of great place, very stable. And that was right around like Donald Trump in America, right? So I think a lot of people probably were looking for other places to sort of maybe go. And yeah, I played EHF, kind of somehow I got to the country day before the border closed last year. And basically it's less last year like working on the second company and then thinking through about how I wanted to engage in New Zealand. And one of the things that I realised was there's a ton of really great, really smart, really ambitious people, founders, individuals here in New Zealand who are looking to build really amazing companies and make great impact. But a lot of times they were just actually lacking, the mentorship, lacking support. The things that we would take for granted in California and Silicon Valley, kind of knowing how to, everything from, you know, how do you, the very, very details of like how do you, I don't know, how do you launch a product to more like high level stuff? How do you structure a board? How do you do a fundraiser? Everything from like, yeah, from very small to very strategic. A lot of that, from what I saw, a lot of that mentorship was lacking. And founders here, they would get initially funded through the angel ecosystem. A lot of that would come from, you know, friends and family. And there was a big angel ecosystem in New Zealand. And a lot of those folks, you know, write the first checks and take the first risks in the companies. But a lot of times they're not necessarily operators. A lot of times they don't necessarily have the right kind of experience to help founders go on that journey, give them the right advice. And so we saw an opportunity to basically create, you know, in the valley, this is a very typical thing. Most great funds are actually run by operators. Actually run by people who've started companies, who've sold companies, who've gone on that journey. And so because of that they can better relate to an empathise with an entrepreneur. And so that's, that was the idea. It was basically to create a similar fund here in New Zealand and, you know, to work with the best entrepreneurs here and to basically give them our experience and our piece of our mind and hopefully help them, you know, expand abroad, scale into the US, attract follow-on funding. Yeah, that's how I look at it. That's kind of how you decided to start it. I've also noticed here in the room, you've actually got some of your supporters. Do you want to introduce them and just say what their role is inside the fund with you? Oh yeah, you know, there's actually quite a few folks. Also, so AJ and Glenn are my two partners. And AJ was actually one of our first investors in Piper. And he's been a great person to work with and just a really nice guy, really helpful, really knowledgeable. And when I told him about this idea he was really interested in basically engaging with more founders. I think what we all kind of love doing is, yeah, they're just working with early age founders and so it's an opportunity to really be helpful. And then he had a friend, Glenn, who ran a part of Google Brain for over a decade and they've co-invested in a bunch of companies together. And Glenn actually has some family in New Zealand. He's invested in some companies in New Zealand sort of independently. So AJ thought of Glenn and said, hey, you know, I'm from New Zealand, Marks in New Zealand. What sort of combined forces and yeah, I do something together. And it's interesting because I think we all bring a different set of expertise here. You know, I think Glenn has the deep tech, kind of Google background. AJ spent over two decades or so of Merrill Lynch running the training desk there. And I've kind of done the startup from the ground up. And so, you know, I think we all bring a different piece to the puzzle to help in whatever way we can. And we also have two venture partners. One of them is Michelle Chata, who's part of cohort 6 along with me. And another one is Jay, who's actually a Kiwi entrepreneur who actually just company last year and yeah, is helping us. Nice, yeah. And so how many of you are based in New Zealand? So you're actually here? Yeah, and Jay's also here. So two of us. You're based up in Auckland. Yeah, no, I'm sure. I know I'm sure Glenn and AJ will be very happy to be here once the border opens. Yeah, yeah, yeah, I'll be there. Yeah, so most of the time when we've been interviewing the fellows, they've been offshore. So we're quite lucky that Mark's actually here in New Zealand. So if any of you want to connect in person and have a coffee, feel free to ping him and I'm sure he'll be happy to do that. So just moving into the fund then, what types of things do you plan on investing and what sort of verticals and kind of like give us the sort of the quick and dirty of the metric that you want to be looking for and the check sizes and where you want to play in the marketplace. Yeah, well, historically New Zealand has had a lot of B2B SaaS companies and deep tech companies. Sort of not a lot of consumer. So I think for us, we don't see ourselves being any, you know, focusing on a specific sector because we don't think there's actually that many companies coming out of New Zealand every single year. It's just four and a half million people here. So we think we don't need to focus on any sector, but we probably will because of those dynamics and historically, that's been the case, probably will focus. We'll have a lot of investments in those two areas, but we're open to just sort of any areas really. And both clan and AJ's angel investing portfolio spans the range of, you know, pretty much all sectors, whether it's health tech or consumer or deep tech. So, yeah, so we don't see ourselves being sector-specific. I think in terms of, yeah, stages are very early staged kind of pre-revenue sort of like pre-seed around all the way through series A. And, yeah, just kind of starting getting connected with the founders as early as possible and helping them kind of as early as stages. I think a lot of times what we've seen is sometimes if they get started with angels very early, a lot of times, you know, they do tend to give up more of their cap table or more board control and things like that. And so sometimes we want to basically, you know, help them, make sure the company is structured well from the beginning so they can grow it. Were you ever doing follow-on rounds? Yeah, for sure. Yeah, we have about half the fund allocated for follow-on, so we'll probably invest into at least one follower out of every company. Sorry, of the top, like the top third companies that we think are. So have you done any investments today? Yeah, we've done one investment today. We've invested into aerial pipe provision. That's actually proprietary technology for fog clearance at airports. So apparently fog prevents, you know, planes from landing hurt visibility and they can clear fog in like 10 minutes and it's clear for two hours. So it's a great value proposition for airports, a huge, you know, huge problem very big market. And so the founders, you know, super super experienced in the space. And so yet that was our first investment. Just just a small check to get started. And we have a few more that we're actively sort of in talks with and probably we'll close in the next month or so. And so how are you partnering with other investors, you know, like how you're kind of playing in the New Zealand ecosystem? Yeah, yeah, yeah. Well, Michelle, I have to thank you for this because you gave me that invite to the Wehiki conference and yeah, I really appreciate that. You know, there was basically an event of all New Zealand investors and about a month ago in Wehiki and I met, you know, most of the people who are playing in the ecosystem and who are also potentially interesting, right? Because it's like it's like they all fit like one very small room. It was like a very cordial, very, very friendly group of folks and it was great to meet everybody and I met a lot of folks from NZGCP the New Zealand Growth Capital Partners and NZDE New Zealand Trade Enterprise and I think Mike Hannah is here actually from NZDE and all these organizations are there to basically help companies at different stages, you know, grow and move forward and it's actually been surprising, right? To see that government, I mean, surprising for me as an American, to see that government organizations are actually so involved and quite helpful. We find great to work with them. So, yeah, I mean, just being connected to all these folks, I mean, we basically understand that because it's such a small market, everybody kind of sees all the deal flow and everyone is kind of, you know, you have to kind of play well together with everyone and support each other. So, yeah, so how do we work with everyone? I think we just, yeah, we just support everyone and we lend expertise where we can, try to be helpful and, yeah, and then come us. And so just on that sum, because I was going to ask you about that, what other differences have you seen or what were some of kind of like the metadata metrics and observations that you saw about the New Zealand sort of early stage investments compared to overseas, where do you see us and the cycle of the sort of investment route computational? Yeah, well, so, I mean, my kind of understanding of the ecosystem is there's been sort of this kind of initial stage about 10 years ago there was a bunch of these BC funds that were formerly PE funds that went in, kind of tried their luck. A lot of them didn't really work out that well and sort of at that stage, I think the government was trying to figure out how do we foster this early stage ecosystem and they sort of this thing called the Spire fund basically it matches Angel fund next so that allowed Angel checks to any Angel rounds to be basically to be sort of almost kind of doubled and sometimes to increase in size and to help the ecosystem, the early ecosystem blossom and I think off the back of that just recently they introduced this elevate fund which invests into funds for kind of later stage funds because I guess kind of high level government sees that there's a lot of early stage companies now and I think there's sort of as much early stage deal flow in New Zealand as there is in Australia and folks like Blackbird which is an Australian we see fund here to look at that and they have an office here permanently so I think compared to compared to startup hubs like San Francisco I think still has ways to go still a pretty nascent ecosystem in terms of the valuations that early stage rounds what we generally see is generally about 30% or so lower than the value but that's definitely probably changed because with all these dynamics with more capital coming into the country I think that will even out Okay, so just to move back on to the you are an operator run fund and sort of that's kind of the branding and the story out there we'll dive into it a little bit more deeper about those skills that you feel that you in the team will add to the founders that you're investing in Yeah, absolutely so yeah again it comes down to the fundamentals of the company things around how do you think through ESOPs or how do you structure a board or how do you think about the financing of the company to thinking through strategic investors a lot of the companies they're actually a lot of them have offers from strategic investors and that's like an example of something where on the face of it it might seem great to to get money from somebody who could potentially acquire you but there's a lot of strings attached to that money and thinking through who has leverage and what giving up and what are they getting was actually like a nuanced question and I had experience with that from my first company we were we partnered with Mattel the biggest toy company in the world and you know did some did some work with them and yeah it was gnarly like it was gnarly like sort of negotiations it took like you know like six months to sort of figure it out and yeah and like again on the face of it seemed like great thing but actually for the company it was sort of it wasn't super clear if we were getting a benefit so like there's an example but like we're seeing that you know there's experience we can bring there for New Zealand founders and then we also have a lot of we have sort of an advisory board about 50 plus people who span all the industries and you know we've put Emily from Piper Vision in touch with Rohit who ran Uber Elevate it was Uber's flying taxi division to talk through some regulatory stuff and she had some questions like there's just sort of questions that founders might face here that they might not find that answers to immediately kind of you know in their ecosystem here and so it's those two things I think it's our experience dealing with some of these nuanced things plus the ability to find experts those are the two ways we help and work with founders good in a good examples that's interesting 50 plus kind of advisory board or sort of like a pool of people that you can call on for differing skill sets and sub-sectors where they might have experience yeah that's quite cool just now kind of looking what else do you think you'll be doing in New Zealand what kind of what other activities because obviously these days it's more than just doing a fund so what other sort of whether it's or what is it that what else are you going to give to the New Zealand ecosystem or plan to do while you're here or even what are you thinking about doing while you're here sure yeah I mean I think the other thing that we're really interested in is engaging with universities and helping build that sort of muscle for starting companies and even the mindset for starting companies from the earlier stage right a lot of the entrepreneurs now are have either worked in the industry or have yeah basically done some work in the US there's quite a lot of folks starting companies right out of college dropping out of college dropping out of their PG programs actually Kyle's on the call so you know Kyle's one of the examples of somebody in New Zealand the rare example of somebody in New Zealand you know doing company kind of I did finish though it's very important to my supervisor yeah yeah we're doing something off the back of just getting your degree so I think New Zealand has top universities globally and there's a lot of folks coming across to New Zealand to study here and I mean now the borders closed it's less but I think there's just a pool of talent there that's that can be hard on us and I've spent some time talking to University of Canterbury and actually Paul is on this call Paul spends he runs Think Lab which is there thank you Bader so we've been looking at doing some events with them some hackathons been talking to University of Auckland and also AUT to both basically do events talk to students do fireside chats we've also done a couple of fireside chats with NZTE some of their companies so it's basically just kind of funding expertise talking on things that interest people basically showing people for the early university students showing them there's other paths besides just getting a job there's other opportunities that could actually allow you to learn a lot faster engage in more interesting things that you would in a job and then just kind of working with existing organisations to do events, speaking things Yeah you're right that's actually a good point you raised there because we've got a bit of flush of that early stage money in New Zealand at the moment and there's the lack of the companies coming out of the universities to invest in it that's slightly more deeper level what I've found from listening to your investor fellows is that that shift can happen quite quickly from us actually getting a huge growth of entrepreneurs coming through and it's just a matter of either a university cycle or a almost like a fund cycle as well of a couple of the new funds that are popping up and stuff and I think it's going to be good it's kind of will be that pull effect because everyone you see articles in the last few weeks about you know investors investing in companies that don't deserve money but that will right itself and I think that's quite good and I think because a lot of you have been talking about you've seen it in your own home countries where it has righted itself and quite quickly I think it's really great and I know we've got Gina that's on here as well from the academy and I love how they're doing their courses outside of the universities I just think that's great that breaks that same role and that's another quick way of getting more entrepreneurs up and out yeah I think hitting the universities and the innovative incubators and the innovative hubs is a really great way to sort of branch out so just conscious of our time now so any questions from the floor does anyone else have anything else for Mark or actually even of his team you can either because it's a small group feel free to raise your hand and ask away Go Lily Kia ora koutou I am Lily from Tolaga Bay Innovation I'm all about Indigenous empowerment okay Māori people in Aotearoa one of the reasons why I joined the EHF fellowship was because we let expertise in various areas we let the ability to access resources to the AI capital because many of our Māori businesses and organisations did not fit the criteria okay I won't go into the reasons you can imagine half of them anyway there are many wonderful Māori businesses and organisations that I work with but there is one key thing we are aware that there are many investors coming to our lands we're aware there is lots of money out there to issue our beautiful lands what we need to do is ensure that we build certain relationships with various investors it's not all about the carrot and the money if you can it would be nice if sorry if this sounds rude but so you understand how our people on the ground think that it's very important to build a relationship with that trust because it is a long term venture this is what we do today affects our next generations so if any investors would be interested in actually meeting with some of our people or being welcomed onto our marae to get the traditional cultural understanding of what we're about and maybe even meeting some of our Māori organisations I'd be more than happy to organise some type of event if you have an appetite for that because I think with the fellowship it is solving the global problems of the world from New Zealand as an incubation nation that means our people of the land really have to be partaken that as well if you truly want to really get in deep with Aotearoa so a welcoming one who would like to meet and discuss for you then thanks Mark have you already engaged in any Māori businesses in the New Zealand ecosystem yes so we have a lot of folks emailing us and sending pictures I'm not sure if any of them are explicitly Māori but we have engaged with a few folks in the community Jace who's a fellow in C6 sort of been my personal advisor just with Māori related things and actually I met Lily in Auckland about six months ago and we were sort of initially brainstorming brainstorming at that point for the fund and we were thinking of actually bringing like American entrepreneurs to New Zealand and that was the initial idea and some of the feedback that she gave us at the time was that there's actually a lot of talent here so why don't you focus here and so that actually helped change our direction and change the focus of the fund and so that was really great we would sort of be really interested I think Lily and sort of engaging if there's companies looking for funding in your network and in your community we would be very happy to engage with that definitely and I think more broadly more high level I think the Māori culture in New Zealand is actually something really special and something really unique about New Zealand and everyone who I talk to abroad is actually really surprised because of that Māori connection I think Mesa New Zealand is a lot more open a lot more accepting compared to a lot of other places in the world and so that kind of mindset I think is perfect kind of for a lot of innovation to bloom and grow here and so I think that's a really special thing that needs to be treasured and we would be very happy to work with Māori founders and the local I'm just going to put Mike Hannah on the spot here from NZTU because they actually have a Māori team an investment and also on the business side so Mike can you just talk about the Māori investment team and how you operate Yeah thanks Michelle so we at NZT we've got a Māori investment team with Māori investment managers who help Māori companies whether it be Māori ex-sweet people or shareholders we help those companies raise capital so we've got a dedicated team involved to the Māori economy because it's a massive part of Aotearoa and we are dedicated to helping that part of the economy go forward so we do quite a lot with Māori startups and trying to raise capital throughout New Zealand Yeah and you've got a team that's spread out throughout New Zealand as well aren't they because Lily's based in Gisborne Right yeah yeah sure we've got a few in Auckland in Wellington but we're represented right throughout the country Yeah Cool thanks so Lily you might want to Mike can probably just ping you in the chat your email address and vice versa his email address and he can put you in touch with people inside NZT if you haven't already met that team so that you can see what's available to help you get investment ready in that regard Thanks for that and just to make you aware we know a lot of the issues and why it's difficult to access and part of that is from the expertise level which is why we actually we actually have an answer to the solution to connect in particular startups to impact investment so I can certainly flick Mike email to share our solution Thanks Lily any other questions for Mark or his team Do you think it would be good maybe Glen or AJ can actually talk about themselves and how they see New Zealand given that they're both I have a question So as part of the academy's work I've been going out into the industry predominantly into the tech and startup world to really figure out what trading needs are out there from a capability point of view and often more the soft skills from a technical point of view and something that I've heard from a very senior CTO level people and a bunch of Wellington businesses at this point is the lack of very high level high technical, highly complex engineering type jobs and opportunities for people to really up skill at the very senior end I think across the board in this instance at a very senior level I think partly due to market size the opportunities does not seem really there compared to many other places in the world with the expertise that you bring from an operational level do you think there's something from a capability point of view that you could do or that should be done so whether it may be done by in terms of bringing those high level complex kind of technical job and opportunities for people here so your question is more about how do we help bring the expertise or help existing kind of folks level I think it's more about the up skilling rather than bringing the expertise what I've heard from folks is obviously we're not able to bring talent in internationally as easily at the moment for whatever it's been an issue around how do we up skill people locally so is there a way that you can imagine bringing some of those opportunities for those really kind of gnarly jobs to really lift people's capabilities and capacities in that space Glenn would probably speak more to that and have more experience there but I think it's a global there's just a global shortage of top tech talent in general that's why Facebook and Google and all these companies they pay exorbitant salaries to the top folks just because those are skills such high demand you actually need to put in the years to get to that level and because so few people were there in the beginning you just have fundamentally lack of experts I think it's hard to kind of do that without doing the work we have folks in the network who are happy to put people in touch with there's actually one HF fellow Jeremy Ginsburg who's actually based in Auckland who's been sort of is working as a CTO in residence for MOAC he's been helping companies specifically in that direction but yeah it's hard to sort of do maybe Glenn you have more thoughts on that yeah sure a couple thoughts so I'm Glenn by the way so I'm kind of the third leg of the stool with AJ and Mark and I come from a deep tech background I'm originally a chip designer back in the 90s and then network infrastructure and then machine learning artificial intelligence stuff that Google for 11 years and data center build out stuff and I've heard this comment a lot if you look at the Google scale of the T levels you know like T6 is like a staff engineer 7 is a senior staff 8's a principal 9's the distinguished engineer and I think there's a cut point people have said like if you get to I don't know whether it's 7 or what but where you know if you're in New Zealand or Australia even you may have to go to the states or go to Britain to kind of keep going I think that's what you're talking about and so I think the competitive pressures will over time do it and I saw it at Google I went to the Australia office at Google for example in Sydney I helped support them a little bit and we saw more and more career paths open up there there was an interesting promotion and it was a little bit more promotion dynamics rather than actual work and there was like a promotion dynamic where some of the outposts at Google where we had people in Poland and you know all around the world had a hard time getting enough critical mass to get promoted and once they got enough people at the T6 level they could get some promotions going and then T7 and then they got a couple T8s and then it kind of like caught on and they were able to get other people up with them and then those things are kind of at parody now and then with the promotion then comes the ability to sort of vie for responsibility on the tech side so I think it is probably an obvious answer but I think it's a gradual process the competitive nature meant to hire someone in Silicon Valley right now like a T8 level person is like probably a $300,000 a year a nut to crack because you're competing with Facebook or Google and then they're actually offering that kind of salary plus plus stock so what that does is it will force entrepreneurs to look at that equation and move deeper tech roles and responsibilities to places like New Zealand that can deliver it so I think it's for sure going to come it's going to equalize just a question of time and how many people are coming out of the universities there that will be able to, at the end of the companies that will be able to pick up that work and remember that AJ did you want to say anything introduce yourself to the group and how you're supporting that thank you for the opportunity I feel like an EHF fellow myself given the number of these sessions I have attended so thank you for letting me participate but it's a real pleasure to engage with the New Zealand founders we must have met at least a couple of companies every day since we started two months ago and I'm always pleasantly surprised by the energy and passion that I see and as well as the technical expertise my background is a lot of it is in banking I was with the Bank of America Merrill Lynch for about 15 years actually based in Asia PAC in Tokyo and in Hong Kong and I had team in Australia and some in New Zealand as well and so I'm a little bit familiar with the region and and then in the last seven years I've been in the Bay Area kind of investing and that's how I met Mark and Glenn but you know engaging with New Zealand founders has been a breath of fresh air and you know and maybe it's related to like Mark said the Maori culture and its influences is that there's a lot of humility you know the valley founders tend to draw the hockey stick a little too quickly there's the financial forecast from the Kiwi founders are very measured and very conservative and you have to ask them like why don't you have the exponential growth and they say they want to have it but they just don't want to disappoint anyone so it's a very interesting culture to engage with and certainly one that I admire from a human perspective and so yeah we're really looking forward to meeting more people putting more capital to work there's a lot of history of entrepreneurship and innovation I think the stats are the highest rate of company creation per capara anywhere in the world exists in New Zealand so hats off to that entrepreneurial spirit and we would love to be a part of that nice yeah we also probably have the highest statistic for companies not lasting more than two or three years because everyone loves to give it a go we'll try to change that you'll see that yeah exactly good call Ajay Kyle you've got a question yeah thank you this might just be a function of time but I was wondering why you think that there haven't been operator led funds or financing previously and then also whether you expect that to change in the future previous founders to come in and be part of that side of the ecosystem yeah yeah and I think I mean there's you know I think MOVAC right from trade me so like I mean it's not exactly like there's no operators it's more that yeah it's sort of very few and they're far between and the majority are not and yeah I think it's exactly because similar to kind of the way I think the developers right it's sort of like it needs time for a lot of operators to exit companies for you know to come back some portion of them will be interested in doing investing so it takes time to propagate for the ecosystem and there's only been you know kind of you know maybe a handful of significant New Zealand exits afraid me being one of them that have you know set up those founders for maybe doing some kind of investing so so yeah I think it's a function of time for sure and I think people understand the value of it right yeah I can add one thing on that just from my self-conveiled experience I've doubled venture capital as an engineer engineering manager a couple of times during my 30 years and now I've been doing it full time now for four years so this is sort of a different phase now in my life but in those previous 27 years with the VC community the financial people AJ can say too they really have a pretty rigid idea of what a VC should be in my opinion too rigid and you have to really in order to punch through that and become an investor yourself you have to really have like either an enormous exit or have some sort of unusual access to capital yourself it's really hard to sell yourself to LPs without having sort of the classic MBA route finance route to be in a VC at least in the valley that's probably too elsewhere but there's been a lot of discussions I've had where I've tried to explore why don't you bring more actual people who are doing the work doing the sales doing the marketing doing the engineering you know why don't you bring them into your firm and really make better decisions and usually I get that kind of pushback from the more finance oriented people who want to see people who have gone down the straight MBA path we're on that cusp now though I think we've hit that curve where I think you're getting more founders that are exiting from offshore so they are creating more of those funds I think that's just hasn't hit here in New Zealand yet well it has now because we've got you right any other questions yeah I've got one Michelle so a question for for AJ and for Mark are you seeing AJ you're seeing sort of two companies a day are you seeing any common problems or issues or challenges with those companies as opposed to companies you see in the valley are there any common issues you know relevant to New Zealand that would be not sort of common place in the valley I guess nothing very specific other than the size of the country I guess which poses a bit of a problem for the initial plans so as soon as you talk about scaling of the business you immediately have to start looking at countries outside of New Zealand so first step being Australia and then most people are either talking US or Asia panic or a combination thereof so I think that creates a little bit of an additional hurdle and maybe related to what Michelle is saying about you know two to three year lifespan issue is that scaling always requires going global from the very beginning and that's something on our website as well you look for founders who are off the global mindset and most of them are but then by definition a lot of people would find it easier to grow their initial customer base from what's available locally a lot of focus on SMEs which is fine but then we have to think about how SME focused businesses can actually engage with SMEs in other countries and which may not be as easy so a lot of times the focus can be switched to enterprise doesn't always have to be small organizations that may allow for a better global scaling so yeah I think that's perhaps the biggest and the most unique challenge that we see coming out of New Zealand and when we compare the stage of the ecosystem we think it's like Israel five years ago and they have a very similar issue and the way they get around that is by building a tremendous bridge with the US particularly Silicon Valley and having a lot of back and forth both as founders and investors and also bringing the most technical people into the fold so in terms of technical expertise in terms of the founders you really find some of the top notch people of Israel running those companies and I think that's sort of what we are seeing in New Zealand as well in terms of technical talent rather than working for a large organization doing a startup so yeah I mean those are some of the challenges we see nothing that cannot be overcome and in there I'm sure lies an opportunity like we have seen with zero true true yeah I can just one thing to that AJ and I see a lot of companies here I think we've seen probably close to 600 companies this year just if you count seeing just a demo day pitch we've seen like 300 demo day pitches from what I commented on alone one complete eight hour day minute each, two minutes each but I would say my overwhelming reaction is that the distribution of companies maybe close to 100 total maybe 30 more in depth is very similar actually to the distribution of companies that I've seen in the ELS I would say overwhelmingly it's right in the zone I don't think there's any real and that's probably a good thing I don't think there's any real characteristic that I could think of other than like AJ said the local markets some companies have a local market focus but other than that I think it looks right in the zone thanks Glyn Richard you've got a question yeah I don't know who this is for but I'm working with a few small businesses and you know helping operate a little bit some of them might help invest in there's this one that I have a situation with and I was wondering if maybe somebody could direct me in the right direction basically it's a Maori school teacher that I've been working with for years and we bang software out just for fun and we created a learning management system just for anybody based on the Maori ITL typical curriculum to create your own curriculum type thing but we don't know if people ever find product market for something but he would really like to start a business and I'm not super experienced in the finding product market fit really understanding how to do market analysis so at so early stage you know we have like these little internal toys that we're playing with that I don't know and we can seek some help somewhere else so that's where I'm and if nobody has an answer on that that's fine just throwing it out yeah I'll just quickly on that then Mark you can go have you looked at any of the incubators in places like that and which city are they based in we're based in Palmi in my Palmi I'm in Takaka so we're just kind of all over the place but I think it's an incubator might not be right right now because we're both really full time and we want to kind of get to the point where we're trying to decide should we go forward with this and you know move in from this full time position into a business leadership position or is the market not too early too late what does the market say is what we'd like to answer before we yeah Richard I think there's probably a good number of resources out there that can probably help you Paul Graham has a bunch of stuff my Combinator website has a bunch of stuff around finding product market thinking about that. I think Michelle's point is also really great about just any incubators and a lot of them have plenty of research online so this is a problem that I think a lot of folks have faced I think you'll find research online and please reach out to us actually oh yeah there's somebody, Steve Blank in the Udacity course so definitely a lot of stuff and if you can't find anything to reach out to us we'd be happy to send you some stuff I would say one note of caution on incubators they're generally great just be a little careful of what you give away in the agreement just read the fine print a little carefully I don't know about New Zealand but certainly in some of the outer areas here like in LA, Boulder Austin, Texas some of the non-Silicon Valley areas non-Boston areas you can get pretty aggressive terms from an incubator so just go in with your eyes open I would totally recommend an incubator or accelerator program especially the kind of clause that catch founders is the one that guarantees a percent of the company for the incubator post funding they'll write these clauses that are basically terrible but they'll say we're going to own 15% of your company not just post money in a YC Safe Note sense but post your actual seed financing which really handicaps your ability to raise money so that's my only little caveat on that we're pouring over the Y Combinators stuff right now and we'll look for incubators and the comment here about the non-equity incubators is awesome go for those, the Stardex here right at Stanford just right two miles from where I'm pointing is a non-equity incubator and they are great you get probably a lot from them and you pay zero equity for it yeah there are a few of those in New Zealand as Paul was saying yeah that'd be a really good list of resources for fellows incubators that don't take equity yeah there is a list on our home page and under the fellows welcome area Richard of all the different incubators in that New Zealand not necessarily which ones do take equity or not but we can point into that after but it is going to be tough I think you probably do one of your needs to go full time you know it's probably pretty tough to crack a market like that that's crowded with a lot of players even though if you have great stuff it's not something it's not like a unique well unless it is like a unique patent that you have on some specific gizmo that you could do kind of part-time if it's more like just grind it out and sell something against somebody else who's already got a solution that might have a lot of the same features you know that it's going to be a whole process so I'd say probably you probably you can't do without at least somebody going full time on it one last one last I was just going to say for Richard I'm a founder who's had a bunch of experience with different incubators accelerators in New Zealand so if you want to have a chat then just happy to talk about that oh yeah that would be awesome that would be so cool I'll bring him that would be awesome cool well if there's no other questions we'll leave it there team thank you for coming and we've got some pretty cool investor fellows coming up in the next few months we're going to have Aaron Bird's going to do a session we're going to have a couple of the fellows from in the Asian markets and hopefully we might be able to get one of the guys coming in from he did the search engine for Google and then now he was in with Skype and so I think and he's based up in Europe so that'll have to be a very early one in the morning maybe about an eight o'clock session is probably what we'll do so that we can do it but I think it'll be a really great conversation to see how a deep dive goes so thanks for coming team and appreciate Mark you coming and showing up and doing all the good work that you're doing and your team also for coming it's great to actually see who's behind behind the fund sort of the manager I think it's great so thanks guys and I'll see you next time thank you guys next time