{"id":35480,"date":"2023-10-20T14:38:50","date_gmt":"2023-10-20T14:38:50","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/kiwis-show-the-way-with-equity-crowdfunding-anna-guenther-says-startupsmart\/"},"modified":"2023-10-20T14:38:50","modified_gmt":"2023-10-20T14:38:50","slug":"kiwis-show-the-way-with-equity-crowdfunding-anna-guenther-says-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/kiwis-show-the-way-with-equity-crowdfunding-anna-guenther-says-startupsmart\/","title":{"rendered":"Kiwis show the way with equity crowdfunding, Anna Guenther says – StartupSmart"},"content":{"rendered":"
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Relaxing the regulations surrounding equity crowdfunding in Australia could have huge benefits for the startup community, PledgeMe founder<\/a> Anna Guenther says. <\/p>\n

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PledgeMe is a crowdfunding platform based in New Zealand, where the legal framework and new regulations surrounding equity-based crowdfunding were introduced last year.<\/p>\n

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Guenther says this has had a huge impact already.<\/p>\n

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\u201cThe traditional size of a normal campaign is $NZ5000, the traditional size of an equity campaign is $260,000,\u201d Guenther says. \u201cEquity campaigns are definitely huge for us.<\/p>\n

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\u201cWe\u2019ve already nearly tripled what we did last year in the last six months, and that\u2019s predominantly because we got equity crowdfunding going and those campaigns are a lot larger.\u201d<\/p>\n

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Equity crowdfunding allows contributors to provide money to a campaign and receive a stake in the business instead of the usual rewards.<\/p>\n

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Crowdfunding campaigns are becoming increasingly popular for startups, often providing an efficient way to test a product and gain market traction. But in Australia currently it\u2019s mostly contained to this rewards-based system, rather than contributors being able to obtain equity in the business.<\/p>\n

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At the moment in Australia only \u2018sophisticated\u2019 investors with assets of at least $250,000 can participate in equity crowdfunding, shutting the option off to most Australians.<\/p>\n

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Loosening the laws in New Zealand<\/b><\/h2>\n

In New Zealand any company can raise up to $NZ2 million each year through equity crowdfunding, and anyone can contribute.<\/p>\n

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The regulations came into force last year, and PledgeMe was one of two platforms to first receive a licence.<\/p>\n

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The Wellington-based startup closed its own funding round through the platform within less than a day, while beer brewers Yeasty Boys raised half a million dollars in half an hour through an equity campaign.<\/p>\n

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\u201cIt\u2019s a lot more relaxed here than what the Australian regulators are proposing,\u201d Guenther says.<\/p>\n

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\u201cThe platforms are licensed by our regulators, and there are some rules to ensure the campaigns aren\u2019t false or misleading, but it\u2019s up to us how to do that.<\/p>\n

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On the agenda in Australia<\/b><\/h2>\n

It\u2019s become a point of interest in Australian politics recently, with the federal government flagging intentions<\/a> to loosen the laws in this year\u2019s budget as part of the small businesses package.<\/p>\n

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A consultation paper was released in August outlining plans for the regulatory changes and extending equity crowdfunding to proprietary companies.<\/p>\n

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Under the changes a $5 million cap will be placed on the amount a company can raise in a year, much higher than the equivalent in New Zealand. Investors will only be able to contribute $2500 per campaign with a total limit of $10,000 over the space of a year.<\/p>\n

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Guenther says this could provide a pain point for companies and investors, and was something that was rejected in New Zealand.<\/p>\n

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\u201cThe government originally had the same thinking with the same caps and they just got the feedback that it\u2019d be too hard to manage and check across platforms,\u201d she says.<\/p>\n

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\u201cThe traditional view of sophisticated investors doesn\u2019t really account for crowdfunding.\u201d<\/p>\n

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Placing this cap on what investors can do will make the whole process a lot more difficult and inefficient, she says.<\/p>\n

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\u201cIt seems like needless worry,\u201d Guenther says. \u201cIt\u2019s not like they\u2019re capping how much people can go and gamble. They\u2019re capping certain areas and not actually understanding it.\u201d<\/p>\n

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\u201cI definitely think that they\u2019re being quite extreme, similar to the US. There are countries where it\u2019s taken off where it\u2019s really relaxed.\u201d<\/p>\n

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The government is expected to make the final announcement on its intentions with equity crowdfunding within the next year.<\/p>\n

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It\u2019s hoped that the discussed changes would provide great benefit to the Australian startup ecosystem<\/a>, with more opportunities for investments from broad groups of people.<\/p>\n

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A local alternative<\/b><\/h2>\n

PledgeMe is a hyperlocal crowdfunding platform focused solely on New Zealand, and this is what gives them an edge over the likes of Kickstarter and Pozible, Guenther says.<\/p>\n

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\u201cIt\u2019s not just an online platform, it\u2019s an offline community,\u201d she says.<\/p>\n

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\u201cBeing hyperlocal means you can have New Zealand campaigns and build a community around it, instead of just being one of thousands of campaigns on Kickstarter.\u201d<\/p>\n

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With equity crowdfunding all sorted, Guenther says they\u2019re now looking at bonds-based crowdfunding and have been given encouraging signs from the regulators.<\/p>\n

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A launch in Australia might also be on the cards.<\/p>\n

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\u201cOur point of difference here is our local knowledge. We\u2019ve had some interest from there,\u201d Guenther says.<\/p>\n

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\u201cIf we were to go there we\u2019d want people on the ground. We wouldn\u2019t want to just go there and say \u2018we\u2019re experts\u2019.\u201d<\/p>\n

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StartupSmart attended Lean15 as a guest of Positively Wellington Tourism.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

Relaxing the regulations surrounding equity crowdfunding in Australia could have huge benefits for the startup community, PledgeMe founder Anna Guenther<\/p>\n","protected":false},"author":2,"featured_media":62215,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/35480"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=35480"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/35480\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/62215"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=35480"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=35480"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=35480"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}