Impact Investing

Supporting purpose-driven entrepreneurs who are solving social and environmental problems.

In addition to facilitating angel investing, Enterprise Angels also facilitates impact investing by leveraging our members’ expertise and partnering with Purpose Capital Impact Fund.

What?

Impact investing is investing in companies / projects whose goal is not only financial return but also social or environmental change.

Key points about impact investing:

  • your returns are both financial AND impact. It is important that the impact returns are measured and reported, similar to financial returns in angel investing.
  • deal structures, terms and returns may differ from traditional angel investments
  • social entrepreneurs may be looking for the following:
      • Assurance that their mission is not going to be compromised
      • Flexibility on investment returns- can be equity (exit) or shared revenue (paid like P&I debt) or debt
      • Feedback on next steps guidance
      • Assistance understanding how the investment ecosystem works
      • Feedback on investment potential
      • Documentation prep assistance

Who?

Impact investors (likely you!) are investors looking to use their wealth and experience to help achieve social and environmental change as well as financial return from their investments.

Enterprise Angels Impact Investors must qualify as Wholesale Investors under the Financial Markets Conduct Act 2013.  Click here for a definition of a Wholesale Investor.

Key Investment Criteria:

1.  Intentional and measurable social and/or environmental impact.

2. New Zealand based. We have a particular interest in the Bay of Plenty & Waikato regions.

3. We especially seek projects creating systemic change or developing innovative models.

4. Innovative return models e.g. shared revenue

How is impact investing different to angel investing?

Angel investing returns are typically generated from exits – a trade sale, IPO or sale of shares to a later stage investor.  This may be unrealistic for most impact enterprises for a number of reasons:

  • Growth rates and scale of the enterprise: the company’s business model may be more traditional, running profitably and growing slowly.
  • Founder’s goals: the founder’s long-term goal may be to keep the company private to more confidently preserve the company’s social or environmental mission.
  • Returns: some mission-led companies may deliver concessionary returns.
  • Alternative exit strategies   

Process of Investing

    How can I get involved?

    Use your capital to make a difference. Enterprise Angels is leading the way for Impact Investing in New Zealand.

    Join our Impact Angels club to invest in companies solving social and environmental problems – and get a monetary return on your investment. To learn more about Impact Angels, please join us at our bi-monthly coffee group – check out upcoming event dates here.

    Register below to get on our mailing list, learn more and stay in the loop with Impact Investing.
    NOTE: please select ‘Early stage social enterprise’ under your interests.

    Useful guides

    Growing strongly and widening scope to impact investing

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    Innovation and Returns: What is Angel Investing

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    Who are Enterprise Angels: Why invest in our deals?

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    What is early stage investing?

    What is early stage investing?

    Early-stage investing funds the first three stages of a company’s development. It is divided into three distinct funding types: Seed funding (seed capital) Money provided to help an entrepreneur start a business Start-up funding money used to help a company develop...

    Why become a member of Enterprise Angels?

    Enterprise Angels offers you the opportunity to invest in some early stage deals, but that is only part of it!  Becoming an active member also gives you: Priority access to deals Induction and workshops Pitch Nights Participation in due diligence Access to the full...

    FAQ for Investors

    What type of investor am I?

    When you join Enterprise Angels you will need to certify that you are a Wholesale Investor.

    The term Wholesale Investor is defined in Schedule 1 of the Financial Markets Conduct Act 2013 “the Act”. We encourage you to review the Act if you require further information.

    Understand how to get certified as a Wholesale Investor.

    How do I make an investment with Enterprise Angels

    Investment with Enterprise Angels is as easy as 1, 2, 3:

    1. Request and review all information including settlement documents
    2. Email your investment amount to us and follow the settlement instructions in the email you will be provided
    3. Deposit your funds into our trust account

    Note: Before your first investment, ensure you are a compliant Wholesale Investor – our team can help you through this.

    What is the settlement process?

    Completing your investment requires:

    Agreeing to become a party to the Shareholders Agreement or other relevant settlement documentation – simply reply to the settlement email.

    Pay your investment funds and any applicable fees

    Nominee Services for Investors

    Most Enterprise Angels investors make investments through EA Nominee Ltd for the convenience. 

    How does EA Nominee Ltd help investors?

    • Allows investment in flexible investment amounts with a minimum of $10K per company
    • The convenience of communicating commitments and responses to us via email rather than the need to sign individual agreements – the Nominee does this for you!
    • Regular reporting on your transactions and holdings including current valuations
    • Maximises the combined shareholding of investors to increase the chances of retaining voting rights as the company reaches later stages of investment

    How do I get certified as a Wholesale Investor?

    Most Wholesale Investors will qualify under the “Eligible” Investor criteria below, and will need to be certified as such by a New Zealand authorised financial adviser, a qualified statutory accountant, or a lawyer.  To be an eligible person, you must have acquired and disposed of financial products in the past and have gained experience for such activities such that allows you to assess the merits of a transaction (including value and risk), your own information needs in respect of a transaction, and the adequacy of the information provided about a transaction.

    This certificate must clearly state how you, the investor, consider you qualify as an eligible investor, and must be certified as such by a New Zealand authorised financial adviser, a qualified statutory accountant, or a lawyer.

    To be an eligible person, you must have acquired and disposed of financial products in the past and have gained experience for such activities such that allows you to assess the merits of a transaction (including value and risk), your own information needs in respect of a transaction, and the adequacy of the information provided about a transaction. Download our Wholesale Investor Statement.

    What are the risks of investing in early stage companies?

    The law normally requires people who offer financial products to give information to investors before they invest. This information is designed to help investors make an informed decision.

    By giving a Wholesale Investor Certificate as a requirement of joining Enterprise Angels, you acknowledge that, the usual rules do not apply to offers of financial products (including debt securities, equity securities and derivatives) made to you. As a result, you may not receive a complete and balanced set of information. You will also have fewer other legal protections for these investments.

    Please refer to the full risk warning here.

    Make sure you understand these consequences. Ask questions, read all documents carefully, and seek independent financial advice before committing yourself.

    What are the benefits of becoming a member of Enterprise Angels?

    Being an Enterprise Angels member enables you to be involved in shaping the future of the companies you are investing in. 

    The more tangible benefits of membership include:

    • Priority access to deals
    • Induction sessions and workshops
    • Pitch Nights where you can network with like-minded members
    • Participation in Due Diligence
    • Follow-up meetings where you can discuss the deal more fully with the founder and other members of the due diligence team
    • Opportunities to vet and screen deals, mentor new members and become an investor representative or investor director

    Can I Iose more than I invest?

    No, the only capital at risk is the capital you invest.

    When will I see a return on my investment?

    Companies may take between three and seven years to provide any returns to shareholders, but this can vary greatly.

    We have seen returns as soon as 20 months and at the longer end of the scale, there are companies that still have not provided any return to investors after eight years.

    There is a risk that you might lose all the money you invest.

    What fees do Investors pay?

    Non members pay a 2% administration fee on any investments made, and when investments are liquidated (in any company who is not paying a shareholder management fee on behalf of their investors).  This will cover costs incurred in providing  on-going services – to put this into perspective, when your $10K investment gets a 10x exit and turns into $100K, $2K will be retained by EA for administration fees.

    Enterprise Angels members pay an annual fee which covers this cost – if you are interested in joining, please contact us or apply now.