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New Zealand venture capital funds and access to new financing: an exploratory study

Sujit Kalidas (BioPacific Ventures, Auckland, New Zealand)
Andrew Kelly (BioPacific Ventures, Auckland, New Zealand)
Alastair Marsden (Department of Accounting and Finance, The University of Auckland Business School, The University of Auckland, Auckland, New Zealand)

Pacific Accounting Review

ISSN: 0114-0582

Article publication date: 10 November 2014




This paper aims to explore the challenges the Venture Capital (VC) funds industry in New Zealand (NZ) faces when sourcing new capital. In NZ, there is a significant gap currently for companies seeking VC funding of between $2 and $10 million to commercialise new products and ideas. Also, the estimated financing needs of the next generation of early stage NZ enterprises are around $2 billion of investment over the next 10 years (NZVIF, 2011).


A qualitative research design is applied, given the exploratory nature of this research. In this study, 15 face-to-face semi-structured interviews with VC fund managers, investors and intermediaries were undertaken.


The findings suggest that the lack of observable proven historical returns from NZ domiciled VC funds is a significant impediment to raising new equity capital. Fund managers and intermediaries also note that there is a lack of domestic entities in NZ that have the capacity and current appetite to invest in VC. In part, this may indicate that VC investors are unwilling to invest further capital in NZ VC funds until the current funds realise their existing investments.


Overall our findings support recent initiatives by the NZ VC funds industry to track and monitor the performance of NZ VC funds.



The authors are grateful for the anonymous participants who agreed to be interviewed in this study and comments by a number of participants on earlier drafts of this paper. Comments of Colin McKinnon of the New Zealand Private Equity & Venture Capital Association, Andrew Frankham, Paul Hocking and other participants at the New Zealand 2013 Capital Market symposium are also appreciated. The views expressed by Sujit Kalidas and Andrew Kelly in this paper reflect their own personal views and not those of BioPacific Ventures. Any errors are the responsibility of the authors.


Kalidas, S., Kelly, A. and Marsden, A. (2014), "New Zealand venture capital funds and access to new financing: an exploratory study", Pacific Accounting Review, Vol. 26 No. 3, pp. 196-225.



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