A guest post from Josh Daniell and Nathan Rose
New Zealand is a pioneer in equity crowdfunding – one of the very first countries to create a legal framework for retail investors to participate in offers of shares in private companies. So when the first equity crowdfunding offer launched in New Zealand in August 2014, many watched with interest as this new way to raise capital took its first steps.
There were initial mixed reactions from existing market participants. Some saw the broader reach to retail investors as an opportunity to create efficiencies through a streamlined online process, as well as increasing access to an asset class previously restricted to the traditional institutional and high net worth networks. Others were concerned that retail investors would struggle to fully understand the risks involved with early stage growth companies, and would be fleeced through low quality deals.