Posts Tagged ‘Snowball Effect’

Crowdfunding changes get official go-ahead from government

Thursday, March 13th, 2014
Photo credit; epSos.de on Flickr

Photo credit; epSos.de on Flickr

Crowdfunding will be much easier in New Zealand as of April 1, paving the way for platforms like Snowball Effect.

Cabinet gave its approval for new crowd funding and peer-to-peer lending regulations Feb. 27 as part of the Financial Markets Conduct Act.

Up until the change companies have needed to issue a prospectus or investment statement before raising money from the public in New Zealand, making it cost prohibitive.

Foss said there would be no investor caps for equity crowd-funding but companies would be limited to raising $2 million a year.

Crowd funding raises money online through a large group of people investing small amounts of money in exchange for a share in that company.

Foss said the law change was an exciting development for both start-up businesses and investors.

“With the regulations coming into force on 1 April, New Zealand will lead the Asia-Pacific region is the development of crowd-funding regulation.”

Simeon Burnett a director of soon-to-launch equity crowd funding provider Snowball Effect welcomed the new rules and said the decision not to cap how much investors can put in was good news.

“We opposed the introduction of investor caps, because we believed that investors would easily be able to circumvent such controls by investing in foreign crowd funding platforms, or investing through entities which do not reveal the ultimate owner.

“We also believe that individuals should be allowed to make their own decisions about their money.”

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Snowball Effect to launch in April in New Zealand

Thursday, March 6th, 2014
Photo credit; David Pacey on Flickr

Photo credit; David Pacey on Flickr

New Zealand crowdfunding startup The Snowball Effect is gaining momentum and is ready to launch this April.

The company, founded by Simeon Burnett, Richard Allen and Francis Reid of Auckland is an equity crowdfunding platform, meaning investors give a business a small amount of money in return for shares in the company.

It will be legal in New Zealand from April when a change to the Financial Markets Conduct Act means anyone can raise up to $2 million without needing a formal prospectus.

The trio, along with full-time employee Josh Daniell, have been researching and building the company, with interested investors and businesses lined up for the launch.

The Snowball Effect hopes to have “couple of thousand” investors and fund 10 businesses by the year’s end.

Burnett says the crowdfunding platform will help businesses gain easier access to capital, including from New Zealanders living overseas.

To read more about this story, click here.

Change in New Zealand law to pave way for new crowdfunding model

Thursday, November 14th, 2013
Photo credit; David Pacey on Flickr

Photo credit; David Pacey on Flickr

With Kickstarter set to launch in New Zealand this month, crowdfunding has taken off in the island nation. But a law change next year will allow for the start of a new type of crowdfunding, and New Zealand’s Snowball Effect aims to take advantage.

Unlike crowdfunding platforms like the aforementioned Kickstarter and New Zealand’s PledgeMe, which merely allow people to make a contribution to a project, Snowball Effect will actually allow contributors to gain a stake in a business they contribute to, much like owning stock.

Snowball Effect is set to launch in April of 2014, the same time the law change will come into effect. The law will make it legal to offer equity for capital through crowdfunding.

When the system is live, a company would be able to approach Snowball Effect and raise capital through the platform from members of the public, who in return take a stake in the business.

Led by directors Richard Allen and Simeon Burnett, Snowball Effect is touted as a system would reduce the cost and complexity of raising capital and would let New Zealanders easily invest in small businesses.

“What this is about is opening up and liberating and democratising the whole investment process,” Burnett says.

“One thing which has really come through strongly in the work that we’ve done is Kiwis love the idea of being able to back New Zealand businesses. They’re hugely passionate about that. So this is opening up an opportunity for New Zealanders to absolutely get in there and support businesses they like the look of.”

To read more on this story, click here.