Snowball Effect, an equity crowdfunding company in which The Icehouse has a shareholding, will launch next April with the aim of bringing investors' to businesses requiring funding that doesn't require them to increase debt, the firm's directors say.
Snowball Effect will launch when the relevant parts of the Financial Markets Conduct Act take effect setting a legislative framework for crowdfunding and peer-to-peer lending. The Financial Markets Authority expects several such entities to launch next year.
In a statement Snowball Effect said its directors, Simeon Burnett, Francis Reid and Richard Allen, have more than 25 years combined experience in international business and trade, corporate finance, strategy and valuation. They've received support from The Icehouse, which has taken a "small" shareholding.
"Snowball Effect will bring together every day Kiwi investors with great Kiwi businesses wanting funding that doesn’t involve increased debt, a costly Initial Public Offering or ceding control of their company by relying on a limited number and class of investors," the company's statement said.
"Investors, whatever their budget, will gain access to high growth vehicles previously only accessible via venture capital and angel investment groups."
“Our vision is a New Zealand economy fuelled by emerging businesses backed by everyday Kiwi investors."
“The country’s economic engine room is small to medium-sized enterprises and there are thousands of them with big vision who can’t take the next step on the growth ladder because the banks won’t lend, and other sources of capital don’t fit or are cost prohibitive. There are also thousands of New Zealanders with innovative ideas that can’t get them off the ground because raising start-up capital is typically limited to loans from friends and family," Snowball Effect said.
“On the other side, tens of thousands of proud Kiwi investors or would-be investors would love to take a stake in one of the most dynamic sectors in the economy, but are currently unable to do so, particularly if they only have a small amount of money that they're willing to invest.”
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