Note: This column represents the opinions
of the writer and as such, is not purported as fact
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New Zealand investors have never been known for their willingness to
risk their cash by taking a punt on hi-tech ventures and some say that's
a good thing.
It was a willingness to take ridiculous risks on the overstated and
ill-conceived plans of hi-tech entrepreneurs that got the US economy into
so much trouble when the dot-com bubble burst in 2000 -- so maybe our
investors are just smarter, right?
Whether it's due to investor conservatism or just plain fear of losing their
money, one thing's for sure -- there are still plenty of Kiwi hi-tech
companies starving for lack of funds.
Is their plight solely due to the ultra-conservative nature of NZ investors or
do they have themselves to blame for the lack of VC wallets queuing at their
doors?
One such local company starving for funding is IndraNet.
Initially touted as a company which had a devilishly cunning plan that would
allow intelligent wireless networks to automatically perform load-sharing,
rebalancing and automated re-routing, IndraNet has all but run out of
money -- despite starting off with a very healthy $7 million in the bank.
You'd think at a time when "wireless" was the buzzword of the day,
a company with a product like IndraNet's would have no trouble attracting
local and foreign investment. Alas, this doesn't seem to be the case.
About a year and a half ago I strongly queried whether IndraNet
might not be going off the rails by
branching out into the world of zero-emission vehicles. It is beginning
to look as if my warnings might have been pretty accurate.
I suspect that things aren't going to get much better for IndraNet, at least
in the short term. The company still needs to decide whether it's in the wireless
technology business or transport business. Let's face it, there are no
synergies between the two areas of its operations and, given the fiscal constraints
they're now facing, they can't afford to do both.
IT Capital is another local hi-tech investment company suffering at the hands
of a bear market and disinterested investors.
There are now a couple of savvy (some would say "lucky") locals driving
this business but its future profitability remains to be proven.
It would appear that despite having investments in a number of hi-tech
startups, to all intents and purposes, all of ITC's eggs are really in one basket --
that of Deep Video Imaging.
Now maybe I'm just thick -- but I'm finding it very difficult to visualise
exactly when/where this multi-layer LCD display technology will offer
an invaluable benefit over existing display technologies.
The Deep Video Imaging website offers little explanation as to when you'd use
one of these displays and a multi-layer LCD isn't 3D in the same way as a
hologram or stereo-vision setup is -- so what's going to make this a financial
success?
It strikes me that the problem with hi-tech investment in New Zealand is that
in far too many cases, investors seem to be repeatedly giving their money to
the people with the slickest presentations, the most grandiose promises, the
most outrageous projected returns and the least commercial or technical merit.
Too many bright people with vastly superior ideas are being smothered into
obscurity thanks to the ill-conceived and poorly managed attempts of
those touting far less deserving concepts but are simply better salesmen.
Do you know of some clever piece of locally conceived technology that is
waiting for investment? Send me information and I'll publish a list of
those which appear to be most credible and have most likelihood of commercial
success. Maybe there are some *smart* investors out there reading Aardvark
who can help.
Have your say.
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