NZAngels Halo Fund 1

Halo No 1 Fund LimitedA presentation to investors

Halo No 1 Fund Limited

• This document has been prepared by Halo Investment Management

Limited (“HIM”) for information purposes only. No offer of securities is being

made by HIM pursuant to this document.

• While all reasonable care has been taken to ensure that the information in

this document is accurate, HIM will not be liable for any errors in that

information or for any reliance placed on information contained in this

document.

Disclaimer

Halo No 1 Fund | May 2009


• The Halo Fund No 1 provides a passive ‘fund’ approach to Angel investing.

• It gives investors a unique opportunity to gain qualified access in a cost

effective manner to a portfolio of over 30 New Zealand early-stage, high

growth investments.

• It does so by partnering with New Zealand’s most experienced Angel

investors to invest in new technology, high growth companies in high-value

sectors like software, bio-technology, niche manufacturing and medical

diagnostics.

• The Fund will be a passive investor which invests on a one-to-two basis in

deals vetted and approved by the co-investing partners and the New Zealand

Venture Investment Fund Limited’s (NZVIF) Seed Co-Investment Fund

(SCIF).

The Opportunity



• Halo Fund No 1 Limited is structured to qualify as a Portfolio Investment

Entity (PIE).

• A minimum of five million shares at an issue price of NZ$1.00 per Share,

with provision to issue up to a further five million Shares at NZ$1.00 per

Share in oversubscriptions are to be offered to “eligible persons” in terms of

the Securities Act 1978 pursuant to an Information Memorandum to be

distributed to “eligible persons” only.

• The minimum investment per investor will be 25,000 shares at NZ$1.00 per

share (NZ$25,000). An initial subscription of NZ$0.40 per Share

subscribed for is paid upon application.

• Further calls to be made over a five year period.

Key Terms of the Fund


Halo No 1 Fund Limited• The Fund is targeting a portfolio of 30 plus portfolio companies over the five year

Investment Period.

• The Fund will co-invest in Eligible Companies in which the SCIF also invests

alongside Co-Investors, on a 1:2 basis up to NZ$250,000 per company over a

number of rounds.

• The terms are attractive:

o An application fee of 1% over and above the capital committed will be charged.

o Establishment costs of 1% of the committed capital will be charged by the

Manager to the Fund.

o No on-going management or performance fees will be charged to Investors. The

Manager will charge a transaction fee for all investments of 4% of the amount

invested by the Fund at the time an investment is made.

o The Fund will be responsible for meeting all other expenses in relation to the

operation of the Fund.




• The Fund is being brought to you by New Zealand’s leading early-stage

Angel investment groups:

o Upstart Angels, powerHouse Ventures, Venture Accelerator, Manawatu

Investment Group, Pacific Channel, ICE Angels, Sparkbox Investments,

Cure Kids Venture, New Zealand Diagnostics, New Zealand Venture

Investment Fund

• It is these active Co-Investors, comprising many of New Zealand’s leading

Angel investors, who will select, undertake due diligence on, invest in and,

ultimately, exit individual portfolio companies.




• The Manager has outsourced key elements of the Fund:

o NZVIF Limited – The Manager has entered into a services contract with

NZVIF, who will provide all secretariat and investment management

functions for the Manager.

o Appello Services Limited – The Manager has entered into a services

contract with, a specialist registry provider, to provide all registry functions

for the Fund. Appello Services is 30% owned by NZX Limited.

o Angel Groups – The primary role of the individual Angel groups is to provide

the deal flow for the Fund. They are the active investors who identify, invest

in and directly manage the early-stage companies. In addition to this core

role they are responsible for managing the relationship relationships with all

investors in the Fund.

Professional Management


Halo No 1 Fund Limited• Angel investing can provide strong returns. Recent United States (US) data

suggests returns on group-affiliated Angel investments average to a 2.6x return on

investment after 3.5 years (27% IRR).

• However Angel investing is high risk as a significant portion of early-stage

investments do not survive.

• A portfolio approach is key to driving returns in Angel Investing. The Funds Portfolio

which be over 30 companies.

The Returns

Returns

More than 10x 7%

5-10x 6%

1x-5x 32%

Negative IRR 52%


Source: Kauffman Foundation


• To kick-start the Fund, it is negotiating to purchase a 25% interest in the

SCIF’s portfolio of investee companies. This purchase will ensure investors

are able to access an established portfolio of New Zealand early-stage

companies from day one of their investment. Examples include:

o Go Vertical Medical developing and commercialising

e-learning systems for clinical procedures.

o Xenos has developed technology for aseptic (sterile) bottling of long-life

beverages. The company’s technology allows flexible packaging of long life

drinks in glass or plastic.

o Mesynthes have developed and patented a tissue sheet medical device

which can be used for wound care and surgery.

What Will be Invested In


http://www.nzvif.com/seed-investee-companies.html










Halo No 1 Fund Limited• The Board of the Fund is responsible for appointing the Manager and monitoring

the Manager’s performance

• The Directors have been selected based on their commercial and early-stage

investment experience.

o John McDonald Chairman – Over 30 years experience in non executive and management

positions. Director of ICE Angels, Air New Zealand Limited and Chairman of Pohutukawa

Private Equity Limited.

o Phil Holliday Director - Entrepreneur and investor with over 35 years in the ICT and

broader technology industries. Chairman of powerHouse Ventures.

o Dr Norman Evans Director - CEO of Upstart, Director of Dunedin City Holdings Limited,

and City Forests Limited.

o Andrew Duff Director - A solicitor and chartered accountant. Chairman of Sparkbox

Limited and 2 Ignite Limited.

o Franceska Banga Director - Chief Executive of NZVIF Limited since 2001. Chair of the

NZVCA, member of the Capital Markets Task Force.

The Key People



• The Fund presents a unique opportunity to gain qualified access in a cost

effective manner to a portfolio of New Zealand early-stage, high growth

investments.

• Investors will gain immediate exposure to a portfolio of around 20 early-stage

companies.

• Company selection is crucial to successful Angel investing. The Fund will be

partnering with New Zealand’s most experienced Angel investors to invest in

new technology, high growth companies in dynamic, high-value sectors like

software, bio-technology, and medical diagnostics.

• All investments made by the Fund will follow a structured process and will rely

on the relevant active Co-investor to undertake due diligence on the portfolio

company and negotiate and lead the negotiation of commercial terms.

Conclusion and Next Steps



• The minimum target size of the Fund is NZ$5 million.

• The minimum subscription is NZ$25,000 with a minimum of NZ$10,000 due

on application.

o Offer opens: 18 May 2009

o Offer closes: 30 August 2009

• If you are an “eligible person” in terms of the Securities Act 1978, you may

request an Information Memorandum.



Contact Details• To invest in the Fund you must be an affiliate of one of the participating Angel

groups who will be able to provide you with the Funds Information Memorandum.

• Please contact [email protected] for more information.



www.halofund.co.nz

Economy & Finance

NZAngels Halo Fund 1