PowerHouse Ventures - IPO?

[Harvey Specter]

http://www.nbr.co.nz/article/business-incubator-powerhouse-ventures-mulls-40-million-ipo-bd-166658

Potential listing next year - probably on the NXT market.

Powerhouse is a start up incubator and currently has 4 seed fund partnerships which is manages which are being rolled up into one entity (pre Christmas) in preparation for a capital raising next year, either via IPO or from a large investor.

They have a weird range of investments (http://www.powerhouse-ventures.co.nz/portfolio/) but it is to early to tell if any will be successful. The prospectus, if issued will be interesting.

[Schrodinger]

http://www.nbr.co.nz/article/business-incubator-powerhouse-ventures-mulls-40-million-ipo-bd-166658

Potential listing next year - probably on the NXT market.

Powerhouse is a start up incubator and currently has 4 seed fund partnerships which is manages which are being rolled up into one entity (pre Christmas) in preparation for a capital raising next year, either via IPO or from a large investor.

They have a weird range of investments (http://www.powerhouse-ventures.co.nz/portfolio/) but it is to early to tell if any will be successful. The prospectus, if issued will be interesting.

Two schools of thought here:


You either think that they can pick these companies better than you and want to diversify your thoughts/opinions by investing; or
You can pick them better and don't participate.


Sure you can get in earlier and get higher returns but the risk factor still applies. It is still no substitute for DYOR and I wouldn't recommend outsourcing your ability to think.

[Harvey Specter]

Two schools of thought here:


You either think that they can pick these companies better than you and want to diversify your thoughts/opinions by investing; or
You can pick them better and don't participate.The third school of thought is they have access to deals you dont and with their expertise can make a return over and above their cost.

Picking a different industry completely, why would anyone invest in IFT when they can invest directly in TPW, Z, MET, AIA (proxy for Wellington) etc. Difference is IFT have a proven track record. Still too early to tell for PH but it is an early stage seed fund so most returns will come from just 1 or 2 investments, so they only need one unicorn to be successful (no one can predict Unicorns at an early stage).

Agree it is a high risk opportunity.

[Schrodinger]

I was sort of leading to this in the comment about getting in early/access etc. Although this could turn out reasonable, investing in this because you either trust the people or think that they know more is not a good excuses to plow money in.

This being the case what is their expected 'failure' rate? I assume success will be a company valuation of $100M? Most seed/angels expect 5-10% success so focusing on what separates these guys from the rest should form part of the DD process.

Taking this a step further, if they have an international network to build these businesses then I would consider that a huge plus. To get a $100M valuation the company will probably have to export. If their support is purely NZ centric then that is a concern.