It’s amazing how fast the last month has flown by! We thought it might be time for a quick update on all things equity crowdfunding, so here goes:
The Financial Market Conduct Act came into effect 1 April, wahooo! We celebrated in the office, and hope you did too?
Sadly – this doesn’t mean we’re licensed yet though. We’re working through the process with the FMA (who is regulating everyone going into the space) and it’s definitely going to take a few weeks to dot all the i’s and cross all the t’s. Since we’re all building this space as we go, we want to make sure we do it right.
How it could work
A lot of people have been asking what will be required to run an equity campaign. It will be a bit more than the current rewards side for sure, so it’s good everyone is asking. Here’s the minimum info that we expect we’ll need to get companies up and running with equity crowdfunding:
Company Name (as in the Companies office) and location / sector
Team details (Directors and Senior Managers)
Basic info around Idea, Market, Exit Plan / Treatment of Dividends
Financial Accounts created by an accountant or pulled from Xero (up to past three years, dependent on how long the company has been trading) – bonus points if audited.
Financial Forecast for the next three years – including money raised
Images from business / team in description / browse box
Valuation of the company
Equity on offer (min target, and max overfund)
Rewards and a pitch video will be optional, but recommended.
The pricing will be similar to our model now (5% success fee), though there will be a few legal costs at the end (getting the final share registers and everything set up), and a cost to run background checks.
We’ll also have a Q&A forum for potential investors to ask companies questions (or offer support), and a shareholders communication portal after the campaign is successful.
We’ve been talking to literally 100’s if not 1000’s of people about equity crowdfunding – from all walks of business and life. The semi-overwhelming response has been excitement – using technology to make raising equity funding more transparent and efficient has really resounded with the crowd.
Our favourite comment so far though, came from a craft brewery that is looking at launching with us. When we mentioned some areas of the eco system were sceptical that equity crowdfunding wouldn’t be smart money – he responded with what is now our favourite blog title ever “it’s not dumb money, it’s love money”. Through our talks, the excitement of really skilled everyone (business people, lawyers, accountants, designers) has been infectious. They’d love to invest small amounts AND help if needed. So instead of a handful of smart investors – you could have hundreds of savvy people backing you and ready to jump in and help.
Shout out if you’d like to chat to us about this a bit more!