Appendix I
Survey Questionnaire
Introduction
Q1. Have you ever invested directly, either as an individual or as part of a group, in a privately owned business where there was no close family or other connection between you and the principal business owner(s)? Exclude: - Investments in public companies through share market purchases - Investments in private businesses owned by family and friends?
Investment Activity
Q2. In the last 12 months, how many requests or proposals to invest in privately owned businesses did you receive? Exclude: - Requests for investment in private businesses owned by friends and family
Q3. Of those requests and proposals, how many caused you to seriously consider making an investment?
Q4. How many of those privately owned businesses did you invest in?
Q5. For those firms that you didn't invest in, what were your main reasons for not investing? Please mark all that apply
- The risk was too high
- The parties could not agree on a valuation or terms and conditions
- The business management lacked sufficient expertise or experience
- The business plan was not acceptable
- The proposals are still being considered
- The request for investment was withdrawn
- The business did not fit with your investment preferences
- The required level of investment was too high
- The required level of investment was too low
- The expected return was too low
- The time horizon for profitability was too long
Characteristics of Investment Portfolio
Q6. How many privately owned businesses do you currently have an investment interest in? Exclude - Investments in your own business - Investments in private businesses owned by family and friends
Q7. At what stages of development were those businesses when you first invested in them? Please mark all that apply
- Seed (e.g. investment to enable further development, testing and preparation of a product or service to the point where it is feasible to start business operations)
- Start-up (e.g. investment to enable actual business operations to get underway, including initial production and marketing)
- Early Expansion (e.g. investment to expand commercial production and marketing, but where the business is still cash-flow negative)
- Expansion (e.g. investment in an already profitable business to expand commercial production or marketing)
- What industries are those businesses in? Please mark all that apply
- Agriculture, Forestry and Fishing
- Mining
- Manufacturing
- Electricity, Gas and Water
- Construction
- Wholesale and Retail Trade
- Accommodation, Bars and Restaurants
- Transport and Storage
- Communication
- Finance and Insurance
- Property and Business Services
- Education Services
- Health, Personal and Other Services
- How many of those businesses do you consider are principally technology- or knowledge-based businesses? Include - Businesses where the main product depends upon the development of a new invention, patent or scientific discovery and/or firms that produce goods with a high knowledge or intellectual property content
Q10. Have you invested in businesses spun-off by Crown Research Institutes?
Q11. Have you invested in businesses that are in, or have emerged from, business incubators?
Q12. What is the total amount of uncommitted capital that you have available for investment in privately owned businesses?
Q13. What is the total amount that you have invested in those businesses? Include - Initial as well as follow on investments Exclude - The value of management services or consulting provided in exchange for equity
Q14. What is the total value of management or consulting services that you have provided to those businesses in exchange for equity?
Q15. What are your main reasons for investing in a privately owned business? Please mark all that apply
- Financial return
- To use your skills and experience
- For the challenge of building a business
- As a hobby
- What is your target annual rate of return from investment in privately owned businesses?
Investment Preferences and Approach
Q17. How do you become aware of investment opportunities? Please mark all that apply
- Referrals from friends and family
- Referrals from investment brokers and other financial services firms (e.g. accountants)
- Referrals from other business contacts
- Through formal investment clubs and networks (e.g. Mine)
- Firms approach me with requests for investment
- I identify my own investment opportunities
- Excluding time spent actually evaluating investment opportunities, how long do you spend in a typical month searching for opportunities to invest in privately owned businesses?
Q19. Excluding time spent searching for investment opportunities, how long do you spend in a typical month evaluating investment proposals or requests from privately owned businesses?
Q20. How do you typically invest?
- Invest alone (exclude investment by the existing owner(s))
- Invest with others (i.e. syndicated or group investment)
- Mixture of both
Selecting and Managing Investments
Q21. Please rate the following investment criteria on importance to you in assessing a potential investment in a privately owned business.
- Quality of management team
- Personality and attitude of the entrepreneur
- Domestic market potential of product/service
- International market potential of product/service
- Competitive advantage of the business
- Physical location of investment
- Consistency with your investment preferences
- Regulatory burden within industry
- Quality of business plan
- Consistency with your expertise, experience or knowledge.
- At what stage of business development do you prefer to invest? Please mark all that apply
- No Preference
- Seed (e.g. investment to enable further development, testing and preparation of a product or service to the point where it is feasible to start business operations)
- Start-up (e.g. investment to enable actual business operations to get underway, including initial production and marketing)
- Early Expansion (e.g. investment to expand commercial production and marketing, but where the business is still cash-flow negative)
- Expansion (e.g. investment in an already profitable business to expand commercial production or marketing)
- In addition to your role as an investor, what other role(s) do you typically play in the businesses you invest in? Please mark all that apply
- No other roles (passive investor)
- Board member
- Part-time management
- Management consultancy
- Technical Advice
- Mentoring
- Are you a member of a syndicated group that collectively makes investments in privately-held businesses?
Q25. How did you become aware of that group?
- I am a founding member
- Introduced by friends or family
- Introduced by brokers or other professional services firms (e.g. lawyers and accountants)
- Introduced by other business acquaintances
Exiting Investments
Q26. In the last five years, how many investments in privately owned businesses have you exited? Include: - Sales of your ownership stake to others - Businesses that have ceased operations
Q27. What average annual rate of return did you realise on your exited investments? Include: - Investments that yielded no return
Q28. How did you exit those investment(s)? Please mark all that apply
- Business acquisition or merger
- Initial public offering (or subsequent sell-down on public market)
- Sale of ownership stake to existing owners
- Sale of ownership stake to one or more third parties
- Business ceased operations
- Business was liquidated
Investment Environment
Q29. Please indicate the degree to which you agree or disagree with the following statements
- It is difficult to find opportunities to invest in privately owned businesses
- Government policy is conducive to investment in privately owned businesses
- Entrepreneurs have unrealistic valuation expectations
- Exiting investments is difficult under current market conditions
- Most businesses that I consider investing in lack experienced management teams
- The amount of investment required by a typical firm is within my financing ability
- Most ventures lack proprietary technology/ intellectual property
- I have adequate experience in mentoring and monitoring ventures
- Access to follow-on venture capital is readily available
- I am able to find deals that match my areas of expertise/investment preferences
- There is too much money chasing too few good deals
Other Information
Q30. Have you ever founded or run your own privately owned business(es)?
Q31. Did any of those businesses have a private investor with whom you had no close family or other connection prior to their investment?
Q32. What is your age?
Q33. What is your gender?
Q34. What ethnic group(s) do you belong to? Please mark all that apply
Q35. What is your annual average household income?
Q36. What is your household's estimated net worth (i.e. total assets less debt)?
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