Kickstarter set to launch in New Zealand

By Ben Chapman-Smith

New Zealand film-maker Taika Waititi used Kickstarter to help raise money to distribute the movie Boy. Photo / David White
New Zealand film-maker Taika Waititi used Kickstarter to help raise money to distribute the movie Boy. Photo / David White

American crowdfunding site Kickstarter, which has helped raise more than $950 million for start-up projects, is preparing to launch in New Zealand.

Kickstarter said it would soon be opening up to projects based in New Zealand and Australia, but did not specify a date.

"It's been a long road, but we're finally heading down under," the company said in a statement.

It invited Kiwis to register their email address and indicate which kind of project they were interested in launching by choosing from a drop-down menu.

Crowd funding is a modern alternative to traditional funding avenues such as bank loans. It enables people to raise money through donations from a large number of people, usually through a web-based campaign.

Kickstarter claims that more 4.7 million people have pledged US$767 million to about 47,000 creative projects since the site was founded in 2009.

If a project is successfully funded, Kickstarter collects a 5 per cent fee from the project's funding total.

Until now, Kickstarter has only been open to US, UK and Canadian citizens.

Its presence in New Zealand will provide competition for local crowdfunding sites such as PledgeMe and Boosted.

The most well-known Kiwi example of crowdfunding took place when film director Taika Waititi raised US$110,000 on Kickstarter to help pay for the US distribution of his 2010 film, Boy.

New Zealander Lucy Frost and her US-born husband Francis recently ran a crowdfunding campaign on Kickstarter for their merino clothing brand Little Flock of Horrors.

The couple raised $14,708 with the support of 95 backers, between July 20 and August 19.

Deciding to run a crowdfunding campaign forced the pair to really focus on what they wanted their business strategy and brand to look like, said Francis Frost.

"Once you launch into doing it, you have to put so much into it that you immediately fly past the dribbling stage and you're propelled into taking it more seriously," he said.

"Overall, it was a really positive experience."

Frost said Kickstarter had limited which countries could use the site in an effort to prevent incidents of fraud.

"They want to make sure people aren't going to collect all this loot and then go sailing and not see the project through."

Crowdfunding websites raised US$2.7 billion worldwide last year, an 81 per cent increase on 2011, according to a study conducted by research firm Massolution.

Crowdfunding has been included in a new law overhauling how financial products can be created, promoted and sold.

The Financial Markets Conduct Act means offering equity in a business through crowdfunding should be possible from April 1 next year.

* This story has been amended to reflect the fact that the Financial Markets Conduct Bill passed its third reading last week. The FMC Bill is not still several years away from coming into effect, as the story stated.

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