The Angel Association says record investment in young companies and start-ups isn't sustainable and believes a culture shift as well as a billion dollars of investment will be required over the next few years.
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A recent report by PwC NZ, the Angel Association and Growth Capital Partners said that 2021 delivered record growth for the sector - up 63 percent on a year earlier.
Early stage investors provided $257.5 million of funding for New Zealand start-ups with $88.6m of new capital and $168.9m of follow-on capital.
Angel Association chair Suse Reynolds said the record level of investment was good news for start-ups and their investors, but the unprecedented growth was not sustainable in the long term.
"The upward trajectory that we experienced last year was just outsized beyond anything - two or three times bigger than we've had - in terms of uplift of growth, investment and number of deals," Reynolds said.
"It took us about 15 years to get to a billion dollars worth of investment in high growth startups, and if we really want to make a difference, and see startups deliver the kinds of value that we know they can to New Zealand's economy in terms of high value jobs and new technology to solve the world's big problems, we're going to need to invest a billion dollars probably in the next five to seven years."
Reynolds said promotion was key to the sector's ongoing success, as the year ahead will be a struggle for the sector as investors tighten their belts with global economic uncertainty and increasing competition around the world.
"In the same way that it takes a village to raise a child, it takes a whole country to grow a start-up," she said, adding it would include government, academia, professional service providers, private investors and consumers.
"We can buy their products, we can talk about them at dinner parties, we can introduce them to new customers, we can introduce them to potential investors.
"Critically if there was one thing I would plead for right now, it is that we really focus on finding the startups who are doing this great work, and finding them the team members that they need," she said, referring to the critical labour shortage, particularly in the tech sector.
Reynolds said startups were not just competing against each other to attract the necessary support and investment, but against the world.
"New Zealand is a little bit like a startup itself . . . and [needs to] show the world how to do this sustainably and really effectively."
