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 Information Memorandum).

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.

Note to editors:

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

Renaissance_Information_Memorandum_11_August.pdf
Renaissance Brewing Crowdfunding 2014 - YouTube

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news