Innovative funding options

There are a multitude of funding options available to privately held New Zealand companies, some traditional and some innovative. Each has specific advantages and disadvantages to consider. 

The development of equity and debt crowdfunding platforms driven by technology has enabled New Zealand businesses to access new investors, once the sole domain of venture capital and private equity funds, high net worth individuals and angel investment groups. 

Crowdfunding is an attractive method for early stage and growing private businesses due to the ability to target and engage their existing customer base. The underlying offer by the company is largely the same as offered using traditional methods, being ordinary equity or some form of fixed term loan. However instead of raising the funds from one or two large private investors or banks, the opportunity is offered first to the businesses’ crowd (read customers and friends of the directors and entrepreneurs and the general New Zealand public as individual investors). 

Since the introduction of equity crowdfunding there have been 57 campaigns with over $23m raised by private New Zealand companies. This service is provided by a handful of licensed equity crowdfunding providers including Crowdsphere – a joint venture between Armillary Private Capital and Chinese focused Renaissance Wealth Management. 

Crowdlending is a relatively new concept in the New Zealand market. The concept is similar to equity crowdfunding, however instead of issuing shares the company enters into a loan agreement that carries an annual interest payment with the principal being paid at some future date. Only a handful of crowdlending campaigns have been run in New Zealand so far, however this number is expected to grow over time as businesses look at alternative funding methods. 

More traditional methods of funding still exist in the forms of bank debt, asset backed finance, and receivables and stock funding. Preference shares, mezzanine equity and debt are also alternative funding approaches that will be suited to businesses in specific circumstances and requirements.

Armillary Private Capital can provide a wide range of capital solutions for your business. We have an experienced team that helps businesses, owners and investors to achieve their business goals, create value and enable success. 

Crowdsphere is a licensed New Zealand equity crowd funding platform. We bring together businesses and investors in a more efficient manner than traditional methods. Our purpose is to provide connections for capital to private New Zealand businesses and facilitate growth.