Te Anga Whakamaioha – Investing in people
What is the most important thing in the world? It is people, it is people, it is people.
Founders and various stakeholders within the start-up ecosystem here in Aotearoa often ask what are the key factors we look for when considering investing in an early-stage venture.
The quick answer to that is: People.
Why? Because Hillfarrance is fundamentally in the people business. This is well articulated in the traditional Māori whakatauakī (proverb):
He aha te mea nui o e ao? He Tangata, he Tangata, he Tangata
What is the most important thing in the world? It is people, it is people, it is people.
He Tangata - It is people, is suitably fitting as it reflects on a significant piece of mahi completed at Hillfarrance.
We’ve named this mahi Te Anga Whakamaioha – Our people-centred approach.
It was important to us to ensure that people remain at the heart of everything we do, and with Te Anga Whakamaioha we have developed and implemented a framework to complete screening and due diligence processes. The guiding principles of Te Anga Whakamaioha are derived from te ao Māori (the Māori world) and provide us with a wide lens to support our assessments of founders and their ventures.
It is an honour to utilise these principles and believe they provide a unique perspective that enhances our assessment practice and reflects the special Māori cultural dimension and connection here in Aotearoa New Zealand.
The core guiding principles of Te Anga Whakamaioha are:
Whanaungatanga (Connections and Relationships)
In te ao Māori, Whanaungatanga is about creating connections and building authentic relationships. It is key to the success of teams, who create an environment for participation and collective thought and movement. It’s the cohesion as a collective that consolidates any activity of an individual founder to unify everyone into a high performing team.
For founders, we’re interested in understanding if they can build authentic connections and relationships with purpose, so they can create shared experiences that are mutually beneficial. Do they promote a distinctive sense of identity, uniqueness, and belonging?
How do the founders work together? Are there clear roles and responsibilities? And what’s their distinctive team culture like?
Understanding the roles and responsibilities that founders have established will provide us with a level of risk management in the event of conflict emerging between founders, particularly in later stages. Conflict between founders is one of the major reasons for start-up failure, so getting this right at the outset is essential.
Being at an early stage, the founders have an opportunity to establish their venture’s values that will establish the way in which they will work and how the culture of the venture will be established on these. The culture of the venture will be important for future employees coming into the environment and how it operates through future growth stages.
Other considerations we think about will be - are they credible and do the founders have the career X-factor? What are their past experiences? Are they subject matter experts or do they have domain expertise?
We’re looking for founders who have had great success as a serial entrepreneur, or founders who have come from the market they are targeting and have a deep understanding of the problem that they are solving. These types of founders are very exciting to us as they bring with them the knowledge and understanding only found through lived experiences.
We also consider ‘Why us?’ Why Hillfarrance? How can we help? Do we have the expertise, background and experiences, and connections to propel them onwards and upwards?
Our commitment is more than just capital. We’re a highly engaged investment partner focused on a unique opportunity to directly support founders craft a successful venture throughout the product-market fit journey. We do this through advice, our active network and connections, being there through the tough and good times, identifying and securing new talent, introductions to significant customer leads - just to name a few.
With a long-term relationship being established -which could be more than 10 years in duration- it is super critical that relationships are formed well. So answering the questions on ‘Why us’ is important to Hillfarrance.
Mana Rangatira (Courage and Integrity)
We are looking for founders who have courage, integrity, and a visible leadership style that weaves their team together, and provides positive outcomes for all. Having an identifiable and audacious vision that captures hearts and minds that will make the world a better place for today's generation and future generations.
Founders who have the natural ability to be engaging and can compel and connect with people is extremely valuable. The ability to be thinking globally and with a clear 10-year plan to build a product that people love and are loyal to are deeply compelling for Hillfarrance.
Other attributes include the ability of the founders to take risks and demonstrate leadership by taking a very simple MVP product to market, which is limited in its features, for the market to determine its impact in both the positive and negative. Doing this -and convincing a customer to pay for your product- is very valuable at your early stage.
It’s important to us that founders have a broader perspective on success and this not only being from an economic perspective but also how they can make positive contributions to our planet, environment, culture and communities. We’re facing a future of environmental uncertainty, so acting on this basis, can create a real positive impact.
We also consider if the founders are ready for start-up life? Are they able to live on a ‘fish and chips’ budget for what can be an exhaustive period of time to get their startup into a hyper-growth phase? What we’re also looking for is, if the founders are drinking their own ‘Kool-aid’? What if they are unwilling to consider reason, feedback or guidance? These are alarm bells for us and it’s likely to end with no investment being offered.
We look for founders who have emotional intelligence and know-how to be in control and have the awareness of others and their emotional state, this reflecting the essence of mana rangatira.
With the growing climate challenges, we are collectively experiencing across the globe, and the increased risk of a significant environmental event occurring. Our consideration and focus on the environment have never been as important.
Kaitiakitanga is about the care, protection, and guardianship of the environment. Through this lens, we’re interested in finding out if founders have an environmental sustainability focus? And how they are taking action to make positive impacts today and into the future. Whether this impact comes directly through their product or their venture.
We have a strong belief to be guardians of the planet and aim to leave it better for our next generations. We’re taking practical steps in-house to be environmentally focused and working towards measures that keep us accountable.
Manaakitanga (Strength, and Care of People)
Manaakitanga is the practice of providing exceptional hospitality and taking good care of people. Through the lens of Manaakitanga, we’re dedicated to understanding the depth of humility, empathy, and care of people. Our behaviour in this context can play out in coaching founders, accepting others views and being open to new knowledge and broader perspectives.
Founders who have this form of character can utilise this in many ways, like building out the product and its features, early customer adoption, and through the sales process.
We ask our founders if they encourage the development of inner strength and wellbeing? Do they value themselves and their team? Are they committed to improving their quality of life, and that of their whānau (family), and communities of interest?
An important question we seek answers for is: are the founders comfortable and confident to have challenging conversations that maintain the mana and care of people?
Are the founders able to have challenging conversations that are mana enriching and not to be expressly disrespectful or mana diminishing? There are times tough conversations need to be had. We might decide not to invest, or take investment, or provide advice that may not be easy to say or hear. Even if we disagree with one another we need to uphold the integrity of everyone sitting around the table at all times.
Manaakitanga teaches us to consistently exhibit behaviour that is mana enhancing in all our interactions, as best as possible. This is also what we are looking for in our founders.
Koha (Respect and Reciprocity)
The act of koha has been practiced from generation to generation and it plays an important role within tikanga Māori (protocols). Koha is expressed through the act of giving, sharing and gratitude.
Within our evaluation framework, we’re interested in observing founder behaviour and emotional intelligence in showing respect and reciprocity, and their intention of creating enduring mutually beneficial exchanges of value.
Have the founders established an exchange of value through the creation of product and market fit? Do their customers and stakeholders value what they do? Are they willing to pay for it? Have they established traction? And how large is the market opportunity?
We also observe founder respect levels throughout our engagements and conversations, and whether or not they acknowledge and value others efforts and contributions? This is a tilt towards their ability in forming and building teams that will feel valued through their contributions and efforts in the success of the venture.
Are the founders committed to enhancing future generations and building intergenerational reciprocity? An example of enhancing future generations is how founders can create high levels of employment, training and development, internships, and income creation. These factors can change the lives of individuals enhancing the prospective futures for themselves and their whānau, and communities.
In closing, I hope by sharing this summary of Te Anga Whakamaioha and our core guiding principles provides a broader insight into one of the key areas of our evaluation approach – He tangata – It is people.
As a venture capital firm, to introduce a kaupapa Māori approach into our investment logic is a step towards acknowledging the inspiration and value te ao Māori can provide this sector. Being able to merge traditional values with tomorrow’s innovations is something I’m excited about as a General Partner at Hillfarrance with Ngāruahine, Ngāti Ruanui, Te Atiawa, and Taranaki iwi whakapapa.