Can you tell me a bit about Snowball Effect?
Snowball Effect was founded by Simeon Burnett, Francis Reid and Richard Allen in 2012. All three founders hold various positions with Fonterra and also remain involved day-to-day with Snowball Effect in a part-time capacity. In 2013 I was hired as the company's first full-time employee and since then our full-time team has grown to include three others, along with an advisory board and a board of directors.
Snowball Effect completed the Icehouse's market validation programme in late 2013 and this year we've secured partnerships with key service providers and corporate partners including Wynn Williams, the Icehouse, KPMG, Deloitte, Young Enterprise Trust, SweeneyVesty and many more.
Equity crowdfunding is new to New Zealand. Why did the team want to start a business in this field?
When we started out we knew we wanted to get involved with growth businesses in New Zealand, either through investing or providing professional services. We quickly discovered that not only were investment options very limited due to heavy regulation, but that almost every growth company we talked to told us stories of how difficult and inefficient it was to raise capital in New Zealand. We knew there had to be an opportunity to make a real and lasting contribution to the New Zealand economy by providing Kiwi investors with the opportunity to invest in our best growth businesses, while reducing the hurdles and cost of raising funds for these companies.
What have been some of the challenges in terms of getting started?
Resourcing, funding, legal hurdles, marketing - all the usual obstacles faced by startups. Just getting up and going has been a challenge. Taking a concept from an idea to a reality takes a lot of hard work. Fortunately we've had phenomenal support from the wider New Zealand business community through some of our fantastic corporate partners - Wynn Williams, the Icehouse, KPMG, Deloitte, and many more.
What would you like to see the business become? What role do you see the company playing in the future of New Zealand's investment ecosystem?
Our goal for Snowball Effect is to provide a sustainable and cost-effective solution to funding growth businesses in New Zealand. In addition we want to become a part of everyday Kiwis' investment portfolios - shifting investment from property into growth assets and supporting our best businesses to become world beaters, because this is what we believe will drive real economic growth for New Zealand. The SME sector is a critical component of the national economy - 97% of firms have fewer than 20 employees - yet they struggle to access capital. Through equity crowdfunding, the SME sector can access funding and the power of the crowd to accelerate their growth.
In terms of our role in the investment ecosystem, we see our platform as complementary to existing funding channels, and another option for both investors and businesses to consider. Equity crowdfunding is particularly relevant for companies that want to harness the power of the crowd to increase sales, fill capability gaps within the business, or get credible product and market feedback.
Coming up in Small Business: Australia is often the first market small businesses target when going offshore, but it's not always easy to crack. If you've got some war stories to share about your small business crossing the ditch, drop me a note: firstname.lastname@example.org.