Crowdfunding: An increasingly viable option for start-ups? 27 Nov 2017 Post by: Steven Moe
The Financial Markets Authority has just released the first statistics relating to crowdfunding in New Zealand. It shows that beyond any doubt this is an option for people to consider in order to raise funds for their new venture. A compelling story and provable business case is all that may be necessary to raise the amounts needed to take a business to the next level.
Some of the key highlights that stood out to us are:
- A total of $74.2 million in total was raised all by investor crowdfunding;
- In relation to peer to peer lending there are 7 such entities registered and in the year ending 30 June 2017:
a) $259.9 million is currently loaned to individuals; and
b) $29.5 million loaned to businesses.
- Interestingly the average value for new loans was just $8,771.
In relation to crowdfunding it is worth quoting the relevant part with the key statistics: “Of the eight licensed crowdfunding providers, 5 facilitated offers during the reporting period. There were a total of 50 offers, with 34 successfully meeting their funding target. 263 potential issuers were declined. 1,597 investors invested in crowdfunding for the first time, with 2,331 investing through the crowdfunding system in the year.”
That picture is consistent with something we have seen recently which is some social enterprises choosing to raise money in this way – for example Cultivate Christchurch with their “Broccoli Bonds” and Kilmarnock Enterprises with their crowdfunding campaign.
If you are looking to raise money for your venture then it is worth considering these options. Keep in mind as well the restrictions on seeking funding from others – for an overview on this see our other article here.
For more information on the FMA’s announcement and the statistics they have published you can visit here.