Kiwi startups may have another equity crowdfunding option on the scene, with the launch of AngelEquity.
AngelEquity promises to bring wholesale investors to a pool of early stage investments, which are presented by angel investors nationwide. For startups, that means that it's another way to get their companies in front of dedicated investors.
“It’s a highly risky part of the market to play in but absolutely vital for New Zealand’s future economic and social wellbeing. These companies are the Xeros and F&P Healthcare companies of the future. And what these companies need as much as the capital is exposure and support – the expertise and connections that the capital can help deliver,” says Bill Murphy, founder of Bay of Plenty angel investor group and the team behind AngelEquity, Enterprise Angels.
Murphy believes that angel investing is the best way for early-stage companies to gain investment, if they pass the 'rigorous' pre-selection process including due diligence, negotiating investor terms and company valuation. All companies have a minimum of 25% angel investment in their current funding round.
He says that angel investors have invested more than $50 million a year in New Zealand companies alone. It's now part of the global economy.
He says that investors aren't even limited to banks or financial institutions anymore, with recent changes to the Financial Markets Conduct Act 2013 meaning that financial market experts of high net-worth people can now become wholesale investors.
"And it’s not just about financial return – the most important part is the skills we put in, because that’s where these companies really benefit. We are making a difference by investing our time and money in exciting young companies," he explains.
“Early stage, high growth companies are always looking for capital. Without capital the growth path is exponentially slower," comments Suse Reynolds, executive director of the Angel Association of New Zealand.
The crowdfunding platform covers seed and startup stages of companies in sectors such as IT technology, cleantech, food and life sciences.