New Zealand to lead Asia-Pacific in Crowdfunding

In late February 2014, NZ Commerce Minister Craig Foss announced that cabinet had approved amendments to the Financial Markets Conduct Act to allow crowdfunding and peer-to-peer lending. “New Zealand will lead the Asia Pacific region in the development of crowd-funding regulation” – Craig Foss.

As further evidence of the growth in crowdfunding as a valid project funding tool, Kickstarter (one of the biggest crowdfunding platforms) recently celebrated passing the $US1 billion mark in pledges. These pledges have helped fund creative projects around the globe. Even more exciting is the fact more than half of the pledges have been received in the last 12 months.

The advantage of crowdfunding is that funds can be raised without the need to prepare a costly prospectus or investment statement.

What is Crowdfunding?

Crowdfunding is a valid tool to raise funds to help turn a business idea or project into reality. As an example, last year I helped fund a Kickstarter project. The author of a blog I often read wanted to turn the blog into a published book but was unsure of what demand there would be and was unable to personally fund the writing and publishing process. Via Kickstarter, I invested in the project, essentially purchasing an advanced copy of the book. Through these advanced sales I and 279 similar minded people helped fund the writing and publishing process.

In another example, famously, over $4.7 million was raised within a month by the makers of Pebble Watch. Pebble Technology has the idea to design a watch that displayed messages from a smart phone. They managed to sell more than 35,000 watches without even finalising the prototype.

Is Crowdfunding for Me?

Crowdfunding is best suited to the development of new products and ideas. It is a great way to test your market and interact with potential customers prior to risking time and capital. In a way, crowdfunding is similar to social media in that it helps create a bond with customers. It won’t help with your funding needs to expand your factory or open an additional sales branch but it certainly has merits as a starting point. A key advantage of crowdfunding is that the funding does not come with a dilution of your ownership in the business.

So, are you sitting on a great business idea that needs additional funding to help turn it into reality?

For more information or to arrange a local state based interview, please contact:

Maree Schneiders
StrategyCo Pty Ltd
M: +61 (0) 411 446 484
E:  maree@strategyco.net
W: www.strategyco.net

About MSI
MSI Global Alliance (MSI) is a top ranked, international association of independent accountancy and law firms. In Australia and New Zealand, MSI consists of 15 independent legal and accounting firms that provide specialist services to local and overseas businesses and form part of the larger MSI Global Alliance group with over 250 member firms across 105 countries worldwide.

For more information, visit MSI Global Alliance – Aust & NZ

Recent Articles
Borrowing in a Self Managed Superannuation Fund
Do you really “own” your company name? Might be time to register a Trade Mark
Family Business Succession or Entrapment?
Are your workers employees or contractors? Fair Work blitz on sham contracting