A tale of two platforms: Equity crowdfunding in Australia & New Zealand

By Kat Jenkins
from Multitude

The last 12 months has seen a steady stream of equity crowdfunding laws and platforms released globally. The UK and Europe are already home to CrowdCube and Seedrs. And the JOBS Act in America is opening the floodgates there as well. In New Zealand, equity crowdfunding will become possible due to a law change coming into effect on April 1, 2014. Australia has also recently begun work on their crowdfunding legislation.

both-logos

With all this activity going on, I sent through some questions to two new players: Fundakiwi, from New Zealand, and Squareknot, from Australia to see what they were up to, and what they thought the future looked like.

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Is equity crowdfunding preventing startups from raising more capital?

By Clive Fernandes
Originally posted on the Crowdfunding NZ website

CrowdFund Capital Advisors recently released a report which is an interesting read on deal-flow as a result of Equity Crowdfunding. What really got my attention in this report were the following stats.

Within three months of a crowdfunding campaign:

– 28 percent of the companies had closed an angel investor or venture capital round.
– An additional 43 percent were in discussions with institutional investors.

This finding refutes the assumption that Equity Crowdfunding dissuades follow up investment, which could be one of the major negative perceptions that entrepreneurs and startup companies would have had with Equity Crowdfunding. The theory is that a potential Venture Capital firm would be put off from investing in an Equity Crowdfunded startup because of the thousands of existing shareholders it already has. The CCA report has shown this to be untrue and in my opinion the reasons are as follows.

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