This study of the New Zealand venture capital market was commissioned by the Ministry of Research Science & Technology (MoRST) and sponsored by a number of other government agencies with a view to informing the development of public policy in this sector. The terms of reference for the study are appended.
The study fits within the context of a range of initiatives undertaken over recent years by the New Zealand Government to promote innovation and economic growth. In this context the interesting aspect of venture capital is the manner in which this form of financing has spurred economic growth and innovation elsewhere, and the potential for it to make a similar contribution to the New Zealand economy going forward.
The report is structured in four Parts:
• Part I provides an introduction to the study and its New Zealand public policy context as regards wider innovation and growth initiatives.
• Part II examines the literature on the role of venture capital in innovation and economic growth, identifies lessons that can be learned from government interventions in venture capital markets elsewhere, and explores the rationale for government intervention, its limits and their implications for designing government interventions in this sector.
• Part III explores the history and size of the venture capital sector in New Zealand and the development and impact of the NZVIF programme, and documents the views we received from interviewing market participants. We draw from this material our observations on the development of the New Zealand venture capital market so far.
• Part IV draws out the implications of the findings of this study for the development of public policy for the venture capital market and government’s potential involvement it, and we make suggestions for the future evaluation of the NZVIF programme.