JOSHUA CHANG
WITH THE EQUITY CROWDFUNDING INDUSTRY ABOUT TO CELEBRATE ITS SECOND BIRTHDAY IN NEW ZEALAND, JOSH CHANG LOOKS AT HOW IT IS BREAKING NEW FRONTIERS IN ITS APPLICATION.
IS CURRENTLY IN HIS 5TH YEAR OF HIS BCOM(HONS)/LAW CONJOINT AT AUCKLAND UNIVERSITY, AND HAS A STRONG INTEREST IN STARTUPS. HAVING WORKED AT KPMG AND EQUITY CROWDFUNDING PLATFORM, EQUITISE, HE’S NOW HELPING GROW HIS FAMILY’S TWO-YEAR OLD COMPANY, AUCKLAND BIOSCIENCES – WHICH MANUFACTURES PHARMACEUTICAL PRODUCTS FOR EXPORT. OPERATING OUT OF AN ABATTOIR, A TYPICAL WORK DAY CAN RANGE FROM LIFTING BUCKETS AND COLLECTING BLOOD, TO PROSPECTING FOR THE NEXT $50,000 ORDER.
Since its inception, the global equity crowdfunding (ECF) industry has been poked and prodded and often, at times, lambasted by its critics. However, with the maturity of the industry in early-adopter regions such as the UK and New Zealand, the market is beginning to take notice of the benefits of ECF and its potential applications.
Equity crowdfunding is the process by which companies create an offer of shares to investors via an equity crowdfunding platform. There are currently only a handful of jurisdictions in the world where companies can legally engage in general solicitation of financial products such as shares – this means that private companies are legally able to advertise its share offering to not only wholesale investors, but also mum-and-dad investors (retail).
The idea is to use ECF platforms to tap into the ‘power of the crowd’, where many people contribute small amounts to add up to a large, lump-sum investment.
While the equity crowdfunding industry has existed in New Zealand for almost two years, industry participants are still keenly aware of the lack of education in this space. The general notion is that equity crowdfunding is geared toward capital raises for small, high-risk, highgrowth, domestic companies. However, those who have been following the industry have witnessed its maturity and seen it branch out into new territories.
NEW ZEALAND EQUITY CROWDFUNDING NOT LIMITED TO NEW ZEALAND
Companies seeking to raise capital are not restricted to seeking funds domestically. Dependent on size, there is the option of initiating a joint raise between a New Zealand-based ECF platform and an ECF platform based in liberal regulatory environments, such as the UK. An example of such was the offer available on the Equitise platform for international sportswear company SKINS.
SKINS is an Australian company, based in Switzerland, raising capital in New Zealand and Australia through the trans-Tasman ECF platform Equitise and in the UK through Seedrs. Quite clearly, the company