Co-working business model for start ups
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At the top end of the Auckland CBD, the Biz Dojo co-working space opened three years ago in the Iron Bank building on Karangahape Road and it now occupies around 600 square feet inside the complex. Entrepreneurs, startups and services professionals sit alongside each other in an open-plan space, bouncing ideas around in a scene that could resemble miniature versions of Google's or Facebook’s headquarters.
Since its inception in 2009, Biz Dojo has opened a branch in Wellington, and a function venue in Auckland. There are plans to set up a branch at the innovation precinct being developed on the waterfront by Auckland Council.
Biz Dojo ventured outside of the ‘co-working business model’ when it opened it established its own virtual advertising agency, but its latest venture could see it shaping the future of New Zealand startups.
A partnership announced in May with MacFarlane Engel and Associates (MEA), a technology IP commercialisation company, will see the creation of an Auckland business incubator called The Mainframe.
Phil Williams, a partner at Biz Dojo, says it became clear while working with startups at Biz Dojo that investment in the early stages of development is a hurdle many fledgling businesses are unable to surmount.
Williams says New Zealand investors are fairly conservative, and tend to put their investments into proven businesses, making it difficult for startups to find the capital to begin their venture.
“There is a major disconnect with funding in New Zealand. It puts these early stage companies in a difficult Catch 22 position,” says Williams.
The Mainframe will use Biz Dojo’s already established infrastructure and office space.
“We have a lot of what’s needed to run an incubator already, but not the base capital to go at something like this alone,” says Williams.
The partnership with MEA made sense because of the firm’s IP and law expertise, and was originally suggested by ATEED, says Williams.
In its first year, Williams says The Mainframe aims to partially fund around 10 startups either based at Biz Dojo or from MEA’s IP portfolio.
The Mainframe has applied to be a part of the New Zealand Venture Invest Fund’s (NZVIF) Seed Co-Investment Fund (SCIF) programme, which sees any funds raised by The Mainframe being equally matched by SCIF.
Williams says The Mainframe is looking to raise between $5 and $10 million in the next year, and the first company is expected to be funded next year following the registration with SCIF.