Equity crowdfunding The New Zealand story
Contents 1. New Zealand market 2. Companies 3. Investors 4. The future 5. Challenges 6. Critical success factors
The crowdfunding market is growing rapidly worldwide
Regulatory framework • Capital Markets Task Force / MBIE / FMA • Offer shares to the New Zealand public without a prospectus • Up to $2 million per company per year Financial Markets Authority • FMA licenses and regulates providers • A lot of delegated authority – platforms respond to market demand • Licensed platforms
Funding options in NZ Friends, Family (and Friends, Family (and Fools) Fools) Banks Angel investors Equity crowdfunding
The New Zealand Market
Companies on Snowball
Companies • Money – Access to large investor pool • Marketing – Wide exposure and shareholder advocates • Efficiency – Clear, transparent, efficient funding process
Case study • Over $5m (RM13.3m) revenue • Customers in NZ + exporting overseas • Intention to list on secondary market
Investors • Access – Deal flow in new asset class • Simplicity – Consistent information and standard process • No fees – Easy participation • Standard protections – No need to negotiate
Investors Average Investment range Gender split $100 – $500,000 $4500 27% female (RM260 – RM1.3m) (RM12k)
Investor profiles and marketing • 25 – 65 years old • Disposable income • Interested in investing in high risk / high reward assets Investor 1 Snowball Effect and company
Investor profiles and marketing • Retired and wealthy • Highly experienced and interested in staying involved with NZ business Investor 2 • Altruistic bent, but still wants to Snowball Effect and company see ROI
Investor profiles and marketing • Professional investor • Invests for ROI • Wants deal flow and consistent investment information Investor 3 Snowball Effect and company
Investor profiles and marketing • Proximity to a certain business, owners, or product • Not solely motivated by ROI, wants to see that particular Investor 4 business succeed Company
Age and investment size / frequency
Future of equity crowdfunding UK Market • Began in 2011 • Annual average growth rate of 410% • 43% of angels invested in 2014 • 30% of seed investment in 2014
Future of equity crowdfunding New Zealand Market • Larger raises with later stage companies • Co-investment • Snowball Private • Secondary market
Challenges Institutional Exit Valuation funding
Critical success factors • Curated deal flow • Buy-in from credible investors • Demonstrate ability for investors to make returns
Discussion snowballeffect.co.nz josh@snowballeffect.co.nz +64 27 634 2463
Recommend
More recommend
