New Zealand agribusinesses looking for investors will be able to turn to crowdfunding once new legislation comes into effect in April.
The agribusiness-focused crowdfunding platform, Snowball Effect, is the first of its kind in New Zealand, and intends to give small to medium sized businesses access through their website to funding from investors looking for equity.
Snowball Effect's launch coincides with the new regulations and is the brainchild of Fonterra Cooperative Group executives Richard Allen, Simeon Burnett and Francis Reid. They appointed 26-year-old Josh Daniell to be the company's business development manager to oversee daily operations.
An alternative to listing on the stock exchange, the crowd funding platform is a cheap way for agribusiness entrepreneurs to raise funds from the public. New legislation, the Financial Markets Conduct Act, allows for businesses to crowdfund and offer equity, where previously raising money from the public with the promise of a return would have required the issuing of a prospectus and other costs associated.
The act represents a total rewrite of financial market conduct rules, simultaneously seeking to tighten investor protections while removing barriers and costs of raising capital for businesses seeking to grow.