Snowball Effect 2018 Annual Update

2018 has been a record year for Snowball Effect. We have raised more capital than any previous year and continue to grow steadily. Some of the metrics below are disclosed to the FMA as part of our compulsory reporting as a regulated online investment platform. We believe that the private capital markets in NZ can benefit from being as transparent as possible. We’ve recently been collaborating with researchers from the University of Auckland and University of Minnesota to uncover insights into investor behaviour and the growth in online capital raising around the world. Below are some of the highlights from the past year:

Larger offers
We have now raised $41.8 million in capital across 54 offers. The private capital part of the business continues to grow with $12.7 million raised privately in 23 offers. The average size of offers that we work with has been increasing and 13 offers have been over $1 million in size. We have completed 22 offers that attracted more than 100 investors.

Growing investor base
Our investor audience now includes 17,700 people, of whom 7,300 have actively indicated interest in investing in a particular offer. We’ve found that each indication of interest averages out to about $1,000 in investment in the final offer per indication of interest. One of the most important metrics for a two-sided marketplace business is “transacted users”. In our case, 3,100 people have made a completed investment on the platform.

Larger investors
We are now working frequently with large family offices, institutional, and sophisticated investors. 810 people have invested more than $10,000 through the platform and 67 people have invested more than $100K through the platform. There are now 1,400 wholesale investors on Snowball Effect who are eligible to receive private offers. $27.7 million in transaction volume has come from people investing more than $10K.

Increasing diversification
A key difference between Snowball Effect and other players in the online investing space is that we want investors to take the private company asset class seriously as part of their overall investment portfolio. To that end, we’re pleased to see that 33% of our investors have now invested in more than one offer and 14% have invested in three or more offers. 30 people have invested in 10 or more offers (which research from the Kaufman Foundation shows is the base level of diversification needed to approach the underlying asset class returns for angel and venture capital investing). The most active investor on Snowball Effect has now invested in 27 offers.

Ongoing services
Our ancillary services have continued to grow with 14 companies now tracking their legal share ownership records in the Snowball Effect share registry. These companies represent 2,059 shareholding records. We also now have 163 director profiles from investors that are available as independent directors for companies that raise capital through Snowball Effect.

For more information from Snowball click here.

 

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Ten Companies selected for Zino New Kiwis Startup Challenge

Debra Hall, an experienced angel investor and Chairman of Zino Innovation Hub, which runs the Challenge, says the Zino team was delighted at the level of interest shown, with 42 companies, and entrepreneurs from 16 countries, entering the competition.

“As investors in start-up companies, we regularly see talent being wasted because new migrants simply don’t have the connections, the access to capital and sometimes even the language to navigate the early stage of growing a business. Zino is committed to changing this, to create new value for New Zealand” said Hall.

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NZ Startup Community Vibrant and internationally Competitive

The recent Angel Association and PwC release of data reveals a new record of $86 million flowing into early-stage businesses across the country.The recent Angel Association and PwC release of data reveals a new record of $86 million flowing into early-stage businesses across the country.

NZVCA Executive Director Colin McKinnon says: ‘The reported growth in investment dollars was due to an increasing number of larger deals in 2017, compared to the year before. The increased deal size indicates a maturing of the early-stage market. We are seeing angel investment building larger companies that are capable of attracting international investment.

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Investor Activity in NZ Tech Sector Continues to Intensify

Auckland, May 9, 2017 – Investment in New Zealand’s technology companies continues to rise, with record amounts of funding coming from offshore investors, according to the second annual Investor’s Guide to the New Zealand Technology Sector published jointly by the Ministry of Business, Innovation and Employment (MBIE) and the Technology Investment Network (TIN).

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MEDIA RELEASE: Canterbury Angels flying with new partnership

The New Zealand Venture Investment Fund is partnering with the newly formed Canterbury Angels to invest into start-up companies. The Christchurch-based angel investor group was formed in 2015 and now has 35 members, most of whom are experienced investors or have been involved in establishing businesses previously.  Its leadership includes chair Ben Reid, who chaired the Canterbury Software Cluster, Shane Wakelin, Joan McSweeney, Ria Chapman, Mark Cathro, Raphael Nolden, Ian Douthwaite, and SLI Systems co-founder Geoff Brash. Canterbury Angels chair Ben Reid said the partnership will bring more investment into innovative companies in the Canterbury region and around New Zealand. The new investment partnership with NZVIF means that when Canterbury Angels invests into a new company, NZVIF will match investments dollar-for-dollar giving both investors and entrepreneurs confidence that the investment round will be successfully completed. Our focus will be on new companies emerging in Christchurch and nearby.  But our members will also invest in syndicated opportunities throughout New Zealand to ensure we have a broad portfolio of companies. “Based on our experience to date, we expect to see a healthy deal flow.  There are a lot of innovative ideas in Christchurch that are seeking capital.  We have two universities which produce high quality research.  We work closely with other parts of the innovation ecosystem in Christchurch, such as EPIC, Lightning Lab, Greenhouse and the newly-opened Vodafone Xone.  As new startups emerge from the ecosystem, this partnership will help to provide some of the early stage capital to meet their needs. “Our expectation is that the partnership will run for around four to five years, investing into around 10 to 15 young companies during the first 12 to 18 months. With NZVIF committing on a matching 1:1 basis with Canterbury Angels investors, it doubles the capital available to a company than would be the case if we did not have the partnership.” This is the sixteenth partnership NZVIF has entered into through its Seed Co-Investment Fund and the second in Christchurch, having previously partnered with Powerhouse Ventures.  To date, NZVIF and its angel partners have co-invested around $142 million into over 150 companies. NZVIF investment director Bridget Unsworth said that the new partnership is needed to keep up the momentum in the angel investment sector. “The past year has seen continued healthy investment activity across New Zealand with over $60 million invested by angel funds and groups.  Christchurch sees around 10 percent of angel investment activity.  With Canterbury Angels now actively investing alongside other early stage investors, it provides another source of capital for entrepreneurs in Canterbury. “There is a healthy level of syndication of investments between different angel groups meaning they are likely to invest in opportunities throughout New Zealand.  This allows groups like Canterbury Angels to diversify their portfolios beyond just the local opportunities.  Early stage investing is a high risk investment class and so diversification is important. “Current investment activity is healthy and there is a good pipeline of young technology companies needing investment capital to develop.  Since NZVIF began collecting the data in 2006, angel groups have invested over $400 million into young technology companies.” BACKGROUND INFORMATION Canterbury Angels Canterbury Angels is a new angel network and was established in 2015.  It aims to be a broad-based network drawing in investors from throughout Canterbury.  It currently has 35 members and has made four investments in its first year. NZVIF’s Seed Co-investment Fund NZVIF is involved with angel investors through its Seed Co-investment Fund (known as SCIF).  SCIF was established in 2005 to catalyse the growth of angel investment and has now invested into over 150 companies.  Its portfolio includes Christchurch companies like Hydroworks, Crop Logic and Invert Robotics.

Media contacts NZVIF: David Lewis, m: 021 976 119, [email protected]

Canterbury Angels: Gabby Addington, [email protected]

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Edmund Hillary Fellowship Set To Deliver Global Impact Visa

The Edmund Hillary Fellowship (EHF) is thrilled to be named the implementation partner to deliver the new Global Impact Visa programme for New Zealand, as announced by Minister of Immigration Hon. Michael Woodhouse this morning.

“EHF offers a once-in-a-lifetime opportunity for high-calibre entrepreneurs, investors and startup teams to come to New Zealand to create scalable, global impact,” says Yoseph Ayele, Chief Executive of EHF.

“Aotearoa New Zealand has a unique opportunity to be a world leader in developing transformative solutions for humanity’s most pressing economic, social and environmental issues. Visionary entrepreneurs with fresh new ideas and different ways of doing business can help New Zealand get there.”

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Angel Association backs investor migrant rule changes

MEDIA STATEMENT

14 September 2015

Angel Association’s executive director Suse Reynolds says that changing investor migrant rules to direct a portion of investor migrant capital into angel, venture capital or private equity funds would be a terrific boost for early stage companies.

“We have seen considerable growth in the early stage investment sector over the past decade.  This has helped the development of a growing number of promising high growth companies.

“The lack of a meaningful pool of capital remains a key constraint.  If that pool was to be increased, we would have the capacity to be able to deploy greater levels of capital into startup and emerging growth companies.

“If wealthy migrants were required to invest into the growth areas of our economy, it will bring the New Zealand rules into line with what is happening in other developed countries.  Early stage investing is a long-term investment, so it will appeal to migrants who have a long-term commitment to shifting to New Zealand and investing here.

“It provides a powerful mechanism to integrate migrants into New Zealand society as early stage investment is a very collaborative affair. It’s not just the capital but the networks and skills the providers of that capital bring to the table.

“Some of the angel community’s most active investors and contributors are migrants – such as Trevor Dickinson, an active investor with AngelHQ in Wellington, who is from the UK and Dave Moskovitz, an immigrant from the US, who set up Webfund.  These new rules will appeal to angels who are interested in migrating to New Zealand.”

ENDS

For more information contact AANZ Executive Director, Suse Reynolds on 021 490 974 or [email protected]

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A start-up founder’s biggest blunder?

This timely article from the BBC summarises some of the key points from the AANZ’s Governance Course very neatly.  It includes “no friends on the board”!!

With a nod and a wink, a well-known venture capitalist said something that made my blood run cold.

I was at this closed-door meeting for founders of high octane new technology ventures to give a talk about the importance of establishing company boards. It was there that this renowned investor said smugly, “You should not have anyone on your board who isn’t an investor or a friend.”

He went on to say that only people who funded the start-up “will care enough” to help founders achieve their goals, whether it be acquisition, fast growth or becoming a public company. He added that only a friend “can side with you in a board fight if you really need it”.

Read more on www.bbc.com

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