Unique funding streams open for Wanganui businesses

Adrian Dixon

Council's economic arm taps into funding source

Unique funding streams have opened up for Wanganui businesses with a capital raising partnership struck up between the council's economic arm and an Auckland-based equity crowdfunding agency.

Crowdfunding is a relatively new process in New Zealand, but lets companies raise funds by offering shares to the public via a website.

Wanganui District Council's economic organisation, Whanganui and Partners, approached a number of operators in the crowdfunding area, explaining what it was trying to achieve.

Manager Adrian Dixon said they got a handful of responses but only one that was a genuine partnership and that was with Auckland firm Liftoff Ltd.

He said working with Liftoff gave Whanganui and Partners "real substance" to help drive the district's economy.

One of the major challenges from the Government's regional growth strategy was getting access to capital and this partnership with Liftoff provided that avenue.

"We're wanting long-term, growing businesses here, and this step is vitally important because it gives us some real substance," Mr Dixon said.

"This is the 'show me the money' moment.

"We're really excited there was someone in the marketplace willing to do a partnership with us otherwise we'd be faced with putting up at least $100,000 to get our own licence (from the Financial Markets Authority) to be able to seek crowdfunding," he said. Adam Hunt, a Liftoff director, told the Chronicle there was a division between the major centres and the regions in terms of getting access to finance.

That was why his company got involved in equity crowdfunding, targeting regions such as Wanganui.

"While organisations like Whanganui and Partners are providing a lot of support, this gives them another tool," Mr Hunt said.

He said fee structures for a basic capital fundraising model could be onerous for a small business but having access to another provider eliminated those costs.

Crowdfunding lets businesses put their ideas in front of a crowd of 100,000 people.

"If 50 people like it, you can get your money without going anywhere near a bank."

He cautioned there was the chance that no one would be interested in offering financial support.

"But we make it possible for people to invest in, or fund, as much or as little as they like in the businesses they choose through our online platform.

"It's about businesses raising capital seamlessly from friends, family, members of their communities and independent investors."