7. How to fund the business?

Securing investment and establishing governance are crucial for start-ups, especially during the initial phase and throughout the business lifecycle.

Why Investors Matter

Every entrepreneur knows capital is oxygen for a young business. Without it, even the best ideas suffocate. For Manuka Health, securing investment wasn’t just about raising funds—it was about finding partners who believed in the journey and were willing to ride out the uncertainties of a start-up. Investors weren’t a box to tick; they were a lifeline and a source of credibility. A major critical step when building a global business from New Zealand.

The real challenge lay not just in attracting investment, but in attracting the right kind. Early on, I realized that choosing shareholders is as critical as hiring staff. Bring in the wrong people—those who don’t share your vision or values—and you risk spending more time managing boardroom conflict than growing the business.

The Angel Investor Advantage

Seed funding is one of the hardest hurdles for a start-up to clear. Banks are risk-averse, and traditional lenders shy away from businesses without proven cash flow. That’s where angel investors step in. Unlike venture capitalists, who typically want proof of performance and invest with pooled funds, angels invest their own money—and often their time and expertise.

The First 12 Months: De-Risking the Business

At the start, you have little more than a concept, determination, and a small group of committed shareholders. But within a year, the story needs to change dramatically. Milestones need to be delivered, for example, built a management team—sales and marketing, operations, and supply chain—and the first-year sales had reaching at least close to the target. Better yet, by achieving repeat sales showed you are building customer loyalty.

Ideally, the dreaded “Valley of Death”—that start-up period where losses can drag on and sink a business— is short-lived. Non-financial milestones also need to be delivered such as registering trademarks, securing exclusive research partnerships, building supplier relationships and imbedding the supply chain to deliver quality product.

Within a year ideally the company has been significantly de-risked. This shift is crucial for bringing in further shareholders— a sign that confidence in the business was growing.

Investors Bring More Than Money

One of the biggest lessons I learned is that investor assessment is not a one-way street. Yes, investors evaluate you—but you should also evaluate them. Beyond money, what capabilities do they bring? In the early stages, the best angel investors are those who roll up their sleeves to help establish the business, not those who sit back and demand returns.

In our case, the original shareholders acted like true angels. They deepened their investments to levels typical of angel funding—between $200,000 and $350,000 each—and stayed closely connected to the board and management. That closeness gave them excellent visibility into how the business was developing, which in turn strengthened trust on both sides.

Your next read in the series 8. Why is it essential to establish a governance structure?

Building Global Businesses

A fuller explanation on this subject is outlined in my book “Going Global” www.goglobal.co.nz