EXCITED: Economic unit manager Adrian Dixon.
Until now Whanganui and Partners has been long on talk and short on substance, but not any more.
The Wanganui District Council's economic agency is charged with raising the bar for economic activity in the district - and now it's been given a major boost, partnering up to a company whose speciality is raising equity capital.
While getting capital may not be an issue in the major centres, in the regions it's a different story.
So Whanganui and Partners has formed a partnership with Auckland company Liftoff, which specialises in crowdfunding.
Crowdfunding is a relatively new activity in New Zealand but, in simple terms, it lets companies raise funds by offering shares to the public via a website.
Adrian Dixon, manager of the economic unit, said the board approached a number of operators in the crowdfunding area, explaining what it was trying to achieve. He said from a handful of responses only Liftoff offered a genuine partnership.
Adam Hunt, a director of Liftoff, has been in Wanganui finishing off training for Whanganui and Partners staff and board members, and he told the Chronicle the company was specifically targeting the regions.
Mr Hunt has worked with the Financial Markets Authority doing a lot of policy analysis about raising capital in New Zealand.
"It became clear to me that there's quite a divide between the major centres and the regions in terms of getting access to finance. It ends up being easier to get money in the four main centres because there are more people there with money," he said.
The arrangement with Liftoff means Whanganui and Partners doesn't have to stump up with funding to get a licence [from the Finance Marketing Authority] to go out and seek crowdfunding, an exercise estimated to cost about $100,000.
Mr Hunt said the fee structure for a basic capital fundraising model can be onerous for a small business but having access to another provider eliminated those extra costs.
"We've tried to come up with a model that eliminates as much of those costs for the entrepreneur as possible."
His company has created a "partner model" to make crowdfunding available to those smaller areas and smaller businesses.
"While organisations like Whanganui and Partners are providing a lot of support, this gives them another tool," he said.
Funding could be available to existing or new businesses who approach Whanganui and Partners for assistance.
Anyone putting up an offer has their financial background checked and references are always demanded.
"It usually involves the business person doing a video talking about they want to do. We need that person to have a good set of financial forecasts and a proper market analysis before anything goes up on the website.
"It's about making a personal connection. It could involve someone in Wanganui who's got a very good business proposition or idea and gone to Whanganui and Partners for assistance," Mr Hunt said.
Mr Dixon said one of the keys from the regional growth strategy the Government was pushing means getting access to capital and the partnership with Liftoff provided that avenue.
"We're really excited there was someone in the marketplace willing to do a partnership with us," he said.
Mr Hunt said while Liftoff started as a standard equity crowdfunding platform, it received feedback that a different model was needed to connect partners with entrepreneurs. This was the catalyst for the Liftoff partnership model.
Mr Hunt said crowdfunding put a business idea in front of 100,000 people or more.
"You could get 50 people liking it and you can get your money without going anywhere near a bank. There's always the flipside that no one puts up money but that's what can happen. The success is not whether you get crowdfunding or not. It's whether the business is still operating in a couple of years."