Two For One Return As Promising Start-ups Boost NZ Economy

MEDIA RELEASE

1^st December 2014

The latest investment report from the New Zealand Venture Investment Fund (NZVIF) shows that the emergence of promising start up companies, backed by the local venture capital market, is boosting the country’s economy, says New Zealand Venture Capital Association (NZVCA) Executive Director Colin McKinnon.

Commenting on last week’s release of the NZVIF Investment Report, Colin McKinnon says: `The country’s venture capital industry can hold its head up high internationally in terms of the recent returns on investment. We are clearly tracking international trends with our potential for good returns.’

According to the NZVIF Investment Report venture capital funds invested during the years 2007 to 2012 show a current return on investment of $2.11 for every dollar invested.

Colin McKinnon explains: `New Zealand businesses are predominantly privately owned. With 80 per cent of their funding from private money this means that venture capital is a vital part of New Zealand capital markets. The NZVIF venture capital programme alone has been the catalyst for over a billion dollars being raised to fund start up and emerging companies in New Zealand. Some of those companies have progressed to achieve public listing.’

He points out: `The start-up and emerging company eco-system in New Zealand is clearly benefitting from the cornerstone investment provided NZVIF programmes and the momentum is encouraging. We know that investors include venture capital in their portfolios for diversification and the chance to be part of the emergence of these promising start-up companies. Growing strong businesses contributes significantly to the growth of the economy and venture capital funds bring expertise that enables companies to build commercial operations and eventually enter international markets.’

Mr McKinnon notes: `Globally venture capital returns are improving and in recent reports performing well compared with other asset classes. The global financial recession forced the local investment industry to learn a lot of lessons but there is now no doubt that the market has improved.’

 http://www.nzvca.co.nz/

ENDS

Contact:
Colin McKinnon, Executive Director,
New Zealand Private Equity & Venture Capital Association, New Zealand
+64 27 640 6406

ACCESS TO OBESITY SURGERY IN NEW ZEALAND HAMPERED BY LACK OF GPS’ UNDERSTANDING

ACCESS TO OBESITY SURGERY IN NEW ZEALAND HAMPERED BY LACK OF GPS’ UNDERSTANDING 

Media Release for OSSANZ

One of the most effective long-term forms of treatment for obesity is being denied to thousands of New Zealanders because of a lack of understanding among family doctors about the procedures available, as well as public and private reluctance to fund bariatric surgery, according to the Obesity Surgery Society of Australia and New Zealand (OSSANZ), which will be holding its annual scientific meeting in Wellington this week (November 20^th -21^st).

The uptake of bariatric surgery in New Zealand is one of the lowest in the world, with less than 900 procedures performed across the entire country last year, which means that around 0.03% of persons who are potentially eligible is having this treatment.

OSSANZ spokesman Dr Jon Morrow, a bariatric surgeon at Auckland’s Middlemore Hospital, says GPs’ lack of understanding about obesity surgery is as much to blame as poor funding for the poor access to bariatric surgery in New Zealand, in spite of the country ranking third in the world for obesity rates.

Dr Morrow explains: `GPs in New Zealand are generally against bariatric surgery even though the evidence is unequivocally in favour of its use. GPs generally tend to be quite traditional in their approach to weight loss, I reckon less than a quarter of GPs here will refer patients for surgery. Diet and exercise are important factors, but there is now a huge amount of data, which demonstrates that for up to 15 years after bariatric surgery people do lose weight and keep it off. Unfortunately in the face of this evidence GPs just continue to do what they have been doing. They see obese patients everyday and just don’t mention it to them because they find it impossible to broach the subject with them.’

Wendy Brown, OSSANZ President and Associate Professor in the Faculty of Medicine, Nursing and Health Sciences at Monash University, Melbourne, adds: `The theme of our annual meeting in Wellington is “working together for the good of our patients”.  We know that when diet and exercise intervention has failed for obese patients, bariatric surgery is an effective treatment with a good evidence base.  It is important that we educate GPs and the community on the role bariatric surgery may play in the treatment of obesity.

‘Surgery is currently one of the only options available that predictably provides substantial weight loss which is sustained when provided in an environment that supports lifestyle change. We hope that we can raise the awareness of this option for obese persons in New Zealand, and that the community can explore ways to improve access to this surgery.

‘However, bariatric surgery is not a magic bullet.  It requires a commitment from the patient to change their lifestyle and to actively participate in long-term follow-up.  Therefore, we need to involve GPs and other health professionals to support patients on this journey.  It is important we have a team approach in the management of this disease so that we can get the best outcomes for our patients.’

Dr Morrow adds: `Most of the surgery performed in New Zealand is gastric sleeve. This procedure involves removing around 80% of the stomach, leaving behind a small tube of stomach.  The part of the stomach that is removed is the area that produces hormones that increase hunger, and on top of this patients are physically not able to eat as much.   It is safe surgery, causes less severe nutritional deficiencies in the longer term, has few longer term complications and requires 2-4 follow up visits per year, making it well suited to our population who are often reluctant, or find it difficult to, attend follow-up appointments. Typically, by four years people lose around 60% of the extra weight that they are carrying. With this we see diseases related to obesity such as diabetes, high blood pressure and sleep apnoea improve or completely resolve.

`Yet even though the New Zealand ministry of health knows that there are huge health and economic benefits from bariatric surgery, public and private funding is limited.  Procedures cost between $18,000 and $20,000 privately, but the insurance companies will only pay a third of the cost up to a maximum of $8,000 even though it is in their economic interest to reduce the long-term economic effects of untreated obesity.’

According to the World Health Organization someone with a body mass index (BMI) of 30 or more is generally considered as obese. Obesity rates in New Zealand as a whole are just under 30% of the population, but among Maori the rates are over 48% and rise to 68% in Pacific islanders.

Now characterised as an epidemic, obesity in children and adults is associated with serious health risks that include hypertension, dyslipidemia, diabetes, fatty liver disease, obstructive sleep apnea, and psychosocial complications.

Professor Brown points out: `Obesity is a disease with far reaching consequences for health and well-being.  Weight loss has the potential to be one of the most powerful health interventions in our community.  Whilst prevention would be the ideal, preventative programmes just have not worked so far.  Diet and exercise programmes are only successful in the long term for 3% of patients.  It is not that obese people are just lazy and can’t be bothered; it is incredibly difficult to lose weight as your body defends your weight vigorously.  We believe it is time for New Zealand to look at ways to improve access to bariatric surgery.‘

Our client Stephanie Evans talks to NZ Business Magazine

A year ago Oasis Beauty owner Stephanie Evans achieved a significant milestone; she was no longer working for nothing to bankroll the business.
“I get paid every fortnight, just like the other staff members – I probably look forward to payday more than anybody else.”
Evans is the quintessential innovator; she recognised a problem and came up with a marketable solution – in her case creating “a skin cream that could smell, look, perform and feel the way I wanted it to.” It was loads of fun she says, but it was initially just a hobby she did after work and during the weekend.
That was 15 years ago and it was a couple of years before she felt sufficiently confident to expand the market beyond her own bathroom. She began selling in a small way; “I’d have a table at local fund-raising events, I did expos and even a five-year stint selling by party plan. At that stage I was still working full time and making the creams in the weekends.”
Today manufacture is outsourced – but remains in New Zealand – and 16 different Oasis Beauty products sell online and in 250 retail outlets throughout New Zealand.
Key to success was listening, particularly to negative feedback, and making changes to the formulae she was producing. “I was solving problems and over time the negative feedback diminished and women were making repeat purchases. It was then I felt I had created something that had the potential to provide me with a modest living.”
Going to market was a gradual process. “Stepping up from school fetes to lifestyle expos to online selling, then retailers; but now I’m an overnight success!”
The business has evolved as she learnt more, says Evans. “The real challenges have come with the astronomic growth curve Oasis is currently on. This needs to be handled very carefully as I’m not prepared to carry a lot of debt to finance growth.”
She’s a perfectionist but believes sometimes getting to market is better than waiting until all the T’s are crossed and I’s dotted. “You have to make a decision to go for it at some point and deal with unforeseen issues as they arise.”
New Zealand is a small market; particularly for a skin care specialist company. And while Evans has two obvious ways to grow the business – increase the product range or export – neither are currently options, she says.
“About five years ago I went through the process of simplifying the range and deleted a number of products where sales didn’t justify carrying them or they didn’t fit
my strategy.
“It was a good decision. Carrying a smaller range of multipurpose products means we are more focused with our marketing efforts; our raw and finished inventory stockholding is healthier and I’ve been able to improve our GP by negotiating better packaging and manufacturing pricing.” Any future additions to the range will be customer-driven, she says.
Deciding not to export wasn’t easy. “I spent a lot of time going down the track of being export-ready and it’s taken me about three years to decide against it. I believe there is still plenty of scope within the domestic market for Oasis to grow and that’s where my focus is.”
It was a decision based on stress versus reward. “Exporting could deliver big bucks but it would also bring increased stress levels and financial worries. Life’s too short for that and I’m enjoying the journey Oasis is currently on. Saying that, I’ll always look at any opportunities that present themselves, but I’m not actively chasing export business.”
It’s chasing her though; online sales around the globe are growing and Evans would like to see that continue. “Online selling is an area of the business we put a lot of effort into and that’s showing in our growth figures.” She sees e-commerce as supplementary to their other market channels and uses the Oasis website to support and drive business to
their retailers.

Effective online strategy
Evans is a firm believer in the value of an effective online strategy and advises any small business to put aside budget for this. “Whether you sell online or not you need to have a decent website.” It needn’t be expensive. “Ours cost a very small amount and returns that investment every week.”
Most of their online work is handled in-house but professional help is sought when required and they’ve budgeted for a website update
next year.
Oasis spends “a fair amount on online advertising and you can’t use social media platforms such as Facebook nowadays without putting money behind your posts.” (Actual spend is currently around three percent of turnover.) That said, the majority of new business comes from word-of-mouth. “This is testament to the years of R&D I undertook to get the products right and the effort
we put in to providing customers with a really good experience. Nothing beats good service.”
Ten years ago, Evans relocated to Oxford in rural North Canterbury. It’s an idyllic lifestyle, but there are challenges for the business. Initially she had to load orders into her truck and drive to the designated courier pick-up point. “Rain, hail and snow, every day! Once my volumes picked up I threatened the courier company I’d take my business elsewhere if they didn’t pick up.”
Couriers now come to the door – frequently stepping over Tom the pig, sunbathing on the doormat.
Getting round to see customers is another challenge. Evans, who travels the country for face-to-face sales and training calls, says the amount of driving and flying can be tiring. “But it’s worth it to be able to operate the business from the beautiful area we live in. It’s a very stress-free environment and I love getting home at the end of the week.”

Read more http://nzbusiness.co.nz/articles/15-year-overnight-success