David Smallbone, Monder Ram and David Deakins
New Zealand is of interest for containing a unique and specific environment for entrepreneurs and for entrepreneurial finance. It is a small open economy with a population of 4.5 million and geographically remote and peripheral from the developed world’s major economies, in Europe and North America. This places special challenges on its entrepreneurs. However, it is ranked by the World Bank as one of the easiest economies in which to do business (New Zealand is ranked second behind only Singapore) reflecting a benign economic and financial regulatory environment. In this chapter we examine the demand and supply side implications of this context for entrepreneurial finance. New Zealand’s banks are largely Australian owned and were comparatively insulated from the Global Financial Crisis (GFC) post-2008, which arguably has provided continuity in entrepreneurial debt finance. However, by comparison with North America and Europe, sources of equity and venture capital are immature and regarded as being fragmented by financial commentators. As a result, the New Zealand government has sought to stimulate VC and equity markets. In this chapter we report demand side research conducted by the author with New Zealand technology-based small firms and their experience in raising entrepreneurial risk capital over a two year period from 2011 to 2013. The chapter concludes with some of the implications for ‘Kiwi’ entrepreneurs and observations on the emergence of embryonic business angel networks which have some unique characteristics.