Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Equity Crowdfunder Snowball Effect Gets FMA Green Light

31 July 2014

Equity Crowdfunder Snowball Effect Gets FMA Green Light

Snowball Effect was this morning granted New Zealand’s first equity crowdfunding licence by the Financial Markets Authority and is arranging a launch date for the week beginning 11 August.

Snowball Effect co-founder Simeon Burnett says the company would initially present investors with the opportunity to take shareholding stakes in leading craft brewery Renaissance Brewing (see attached summary and Renaissance Flyer).

Renaissance Brewing is seeking $600,000-$700,000 in new funding to expand its Marlborough operations and increase its marketing presence as it pursues its global growth ambitions. It is offering 300,000-350,000 shares (minimum purchase 250 shares) at $2, valuing the company at $5m and representing 12.28% equity if fully subscribed. The initial offer period is for 30 days.

Burnett says more than 200 companies have contacted the online platform about raising capital and the team is actively working with 14 businesses to bring them to market in the coming months.

“Equity crowdfunding represents a paradigm shift in the way SMEs access funding for growth,” says Burnett. “And it also changes the market for investors by broadening and simplifying investment opportunities in New Zealand.”

“SMEs have always struggled for capital but investors, particularly the average investor, have also had limited choice,” he adds. “Snowball Effect will open up this high-growth sector in New Zealand to everyday investors – and they can take small or large stakes without paying brokerage fees.

“The pool of people who participate in New Zealand’s capital markets is suddenly going to get a lot bigger and that’s very exciting.”

“It is however important that investors consider the risks of each investment opportunity carefully before committing. While these high growth companies may provide a potentially exciting investment opportunity, they typically have higher failure rates than more mature businesses”.

Snowball Effect’s Head of Platform and Investor Growth Josh Daniell said the licencing process was appropriately rigorous, and he is pleased to have demonstrated Snowball’s ability to meet the requirements.

Equity crowdfunding public offers would usher in a new era, Daniell says, and, over time, accelerate growth across the important SME sector.

International research into equity crowdfunding, he says, shows that participating companies are boosting revenue, hiring more employees and attracting interest from institutional investors after successful offers.

Click here for further information.

The Financial Markets Conduct Act 2013 and corresponding Regulations provide a new channel for investors. Through licensed equity crowdfunding platforms, each Kiwi company can raise up to $2 million in any 12 month period by offering shares to the general New Zealand public. This enables companies to raise funds from their customers, users, supporters, as well as the wider public. Investors are free to invest any amount up to the $2 million limit per year in any company raising funds through a licensed platform.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

New Paper: Ninety-Day Trial Period Has No Impact On Firms' Hiring

The introduction of a 90-day trial period has had no impact on hiring by New Zealand companies although they are now in widespread use, according to researchers at Motu Economic and Public Policy Research. More>>

ALSO:

Corrections: Serco Exits Equity Stake, Remains As Operator

Serco has sold its equity stake in the company that holds the contract to design, build and run Wiri Prison in South Auckland but continues as sub-contractor to operate the facility. More>>

GDP: NZ Economy Grows Faster-Than-Forecast 0.7%

New Zealand's economy grew at a faster pace than expected in the first quarter of 2016 as construction expanded at the quickest rate in two years. The kiwi dollar jumped after the data was released. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news