Finding the right funding for any business is never easy, but if you are the founder of an early-stage business pursuing a new, or perhaps untested, market the challenges are particularly complex.
But, as Kiwibank’s General Manager of Business Banking Rod Morris tells NZBusiness, Kiwibank has stepped up to change the game for early-stage business founders with its new funding pathway, built to unlock opportunity and foster sustainable business growth.
Kiwibank StartUp+ aims to make the sourcing of funding for early-stage Kiwi businesses much more accessible and it’s supported by a team that understands how startups operate and grow.
As Rod sees it, StartUp+ unlocks funding opportunities that no other bank does, noting that it doesn’t ask for security of assets or any personal guarantee for up to $150,000 of eligible lending.
He says while other banks might back the proven businesses, StartUp+ “is backing the promising”. And, in doing so, it is also offering these innovative business owners the tools and expertise to support their business throughout their growth-journey.
Co-designed with business founders
StartUp+ was co-designed with business founders, who told the bank funding was most often an accessibility issue, with many banks applying standard lending criteria to any funding applications meaning, says Rod, that these early-stage businesses often needed some form of security, or a personal guarantee, and even perhaps a few years of financial accounts.
A second key message from the founders, Rod says, was the speed they could access the funding – always an important issue for any business, but perhaps more so for young businesses depending on where they are in their business cycle or with their product development.
“These early-stage businesses are wanting a partner who understands how start-ups operate, and they do operate differently. They are developing an innovative product or service, developing a business model, sorting out their target market and essentially, they are looking for a partner to help them scale and grow that business,” he says.
StartUp+ has a dedicated team to help founders and rather than past financials it looks to a founder’s business plan and at forward-looking developments from product, to market, to servicing and financial forecasts.
“Our team can work with the founders and look at what milestone they are working towards.”
Rod explains that the StartUp+ team can, if needed, support the founders with the process of developing their business plan, and support them across all aspects of gaining the funding they need.
A collaborative process
“We are well placed to help and it’s a totally collaborative process, helping them refine things. But we are always aware they know their business best. We sit down and work through the process with them, so they are clear on what they need and what strategies might work.”
He notes that eligible startups can apply for lending of up to $150,000 at a time, with the potential to apply for further stages of funding up to $450,000 in total. Importantly, the initial $150,000 of eligible StartUp+ lending is available without putting personal assets on the line. The specialist team can help the founder break the funding down into tranches so they are accessing just the funds they need, at that particular time, in the business’ life-cycle.
“StartUp+ is a broad offering, and encompasses various products under the one offering, whether its savings, lending, or transactional funding. We are targeting the best solution for founders depending on what stage they are at in the business.
“And being tranche-based means funding can be based on the milestones the founder wants to achieve as part of their business plan. We can match funding amounts in tranches to meet these milestones and this includes not providing more funding than the founder might want, or be able to use, at that point,” he says.
As to what type of businesses Kiwibank is targeting with StartUp+, Rod points toward those with a level of innovation at their core, they may be developing a new product or platform, perhaps with a tech focus.
“They are solving a genuine market problem, and are focused on growth and on scaling their early-stage business.”
As an example, he points to three businesses that are already onboard with StartUp+:
- Eat Choice, a tech platform that matches customers personalised dietary preferences with restaurants that serve the type of food they want to eat.
- Capture The Bug which is changing traditional tech security testing, replacing slow, opaque processes with a platform-driven experience that blends expert testers, automation, and clear reporting.
- Delightable, an online concierge experience helping customers discover beauty and skincare products in real-time, personalised to their needs.
Rod says the three business are all innovation-led and solving people’s real problems.
In the past, some founders may have had to choose between taking on equity investors or going without funding, but Rod say StartUp+ can work alongside the equity path.
“We engage with the founders throughout their business cycle and weigh up the different options that will suit different founders, it is not one or the other. Our key message is that StartUp+ is a funding solution that is a lot more accessible for founders and that these entrepreneurs now have a choice, depending on what suits them. It provides access to options,” he says.
Asked what a strong first conversation might look like from his side of the desk, Rod sees it as being about building a good understanding of the problem the founders are solving, their target market, and why customers would choose that product or service.
“We’re looking for founders able to outline their business plan, their strategy and their key milestones to growth. Our lens is all forward-looking and aims ultimately to understand how we can help founders achieve the next milestone and help provide a clear pathway to get there.”
He again pointed to StartUp+ being a very collaborative process with the founder, looking at how the business plan can come into being, saying that “backing the promising”, aims to get across to founders that they don’t always have to have proven financials to access this source of funding.
For founders wondering whether to have a conversation with the StartUp+ team now, or to wait until the business is further along the path, Rod says when the founder feels clear on those business fundamentals – the problem they are solving, their target market, where the product fits in the market, their growth strategy and the next milestone they want to reach – they should make contact through the StartUp+ website, register their interest and his team will be in touch.
