Investment and marketability

From left: Kurt Gibbons, Scott Day, Adam Sorensen and Russell Hopper.

Earlier this year, Vista, an Auckland-based beverage startup closed a deal with property developer and investor, Kurt Gibbons. At this stage, Gibbons had committed a lump sum of cash to provide an injection into the business in return for a 25 percent stake in the company. Supermarket News sat down with Gibbons for a talk about investment, and what a business can do to increase their marketability for the investment stage.

“I was quite entrepreneurial as a kid,” said Gibbons. “I was always thinking of ways to make money. When I was about eight years old, I used to collect golf balls on the weekend and sell them outside Boulcott Golf Club.” Gibbons’ first role after high school was at LV Martin and Son, a consumer electronics and appliances retailer in Wellington. After that, he moved to Vodafone. “By the time I was 18, I had saved $10,000 from working. At this stage, this was enough money for a deposit, so I used my savings to buy a rental property. I added value to the property over the next few years, and when I had gained enough equity, I used it to buy another investment property.” For the last fifteen years, Gibbons has continued to invest in property and shares. In addition to this, he founded Gibbons Co., a luxury property development company in 2008.

Although property investment and business investment are unique, they share similarities. “Business investment certainly has a greater degree of risk, but the potential reward tends to be much higher, too. In saying that, shares are an excellent form of investment for beginners, as you don’t need a huge amount of cash to get started and you can choose the level of risk that you’re comfortable with.” Gibbons also explained that both business and property investment are long-games, something that people need to be able to look at in relation to the bigger picture. “If your property values or shares suddenly spike, that doesn’t necessarily mean you should pull your money out straight away. Investing in a startup is similar—you have to see the potential of the business, rather than simply looking at how much money it’s making now.”

Starting a business can be daunting. There are millions of things to consider, and investment can often give a company the confidence it needs to really get going. Gibbons recommended a healthy balance of listening to advice and going with your instincts. He highlighted discernment and advised taking everything with a grain of salt. “When you start a business, everyone will have an opinion and want to give you their two cents. They mean well, but I think you’ve got to trust your gut feeling.” When talking about the Vista team, Gibbons talked extensively about their commitment to their morals, and where they wanted to steer the company. The team at Vista were told by others in the industry that they needed to sweeten their drink, or put it in glass bottles, for instance. But as Gibbons explained, “They stuck to their guns because they were determined to produce a simple, sugar-free beverage packaged in a way that would be environmentally sustainable yet affordable for most Kiwis.”

Moving forward with Vista, Gibbons detailed how he trusts the team to continue pushing the day-to-day operations. He said he would chime in on the more significant business decisions, but in general, he’ll “let the team do what they do best.” On top of this, Gibbons encouraged New Zealand investors and businesses to look at staying local. “I think it’s important that parents, relatives and schools encourage Kiwi kids to be entrepreneurial. Young people should be encouraged to follow their passions and do what’s right for them, not just getting pushed into finishing school, going to university, getting a good job and sticking with what they studied, because that doesn’t work for everyone. As long as you’re passionate and believe in what you’re doing, you are bound to succeed.”

Gibbons finished with five tips/tricks for someone looking to start a business:

  1. Ask for non-biased opinions as to whether your product or business would be of use or sought after.
  2. Ask people for help. Those who have had success in business don’t mind helping others starting out.
  3. Try to pilot the business without spending much money.
  4. Do your numbers. In order to work, the business needs to stack up. You’ll also be able to set yourself targets, so you know what you need to achieve to be profitable.
  5. Just do it. Don’t be afraid of failure; it will eventually lead to success. You just need to be the best at what you do in your industry to succeed.