Snowball Effect gathering momentum
Kiwi crowdfunding startup The Snowball Effect is gaining momentum and ready to launch in April.
The company, founded by Aucklanders Simeon Burnett, Richard Allen and Francis Reid, is an equity crowdfunding platform.
Equity crowdfunding is when a group of investors give a business a small amount of money in return for shares in the company.
It will be legal in New Zealand from April when a change to the Financial Markets Conduct Act means anyone can raise up to $2 million without needing a formal prospectus.
The trio, along with fulltime employee Josh Daniell, have been researching and building the company, with interested investors and businesses lined up for the launch.
The Snowball Effect hopes to have a "couple of thousand" investors and fund 10 businesses by the year's end.
Burnett says the crowdfunding platform will help businesses gain easier access to capital, including from New Zealanders living overseas.
Why did you start your own business?
We wanted to make a lasting contribution to the New Zealand economy. In particular, we wanted to work with small and medium businesses, which are hugely important to the country's growth prospects.
What have been the biggest obstacles in starting up your business?
Just getting up and going. We now understand the amount of work it takes to get a business started.
Name one thing you've learnt in your business journey so far and from whom?
Talk to everyone. Get out of your bubble and consult widely. Most importantly, you need to make decisions and move on.
Do you have any tips for budding entrepreneurs? Find something you're passionate about and get on with it. Work with good people, understand your market and be prepared to do what it takes to turn your passion into something significant. There will always be reasons it won't work. The key is to find the reason why it will and back yourself.
What have you sacrificed to be an entrepreneur?
Lots of weekends, nights and time at the beach. However, it's been more than worth it.
Are you prepared for failure?
Absolutely. More importantly, we are prepared for this to take some time to be a success.
Who is your "business guru", or who do you admire, and why?
We're constantly inspired by the great people we work with and meet every day, from small business owners to leading industry figures. In New Zealand you don't have to look far to be inspired.
What do you do in your downtime?
Enjoy all the good things New Zealand has to offer: good wine, great food, beaches, just generally enjoying the Kiwi summer.
If you were an employee, which company would you want to work for?
We are employees at Fonterra as well as business owners. The combination gives us the opportunity to leverage skills across both roles.
What has been your biggest disappointment in your journey of establishing your business?
There have been worries about perfection that have slowed down our decision making. We've become better at trusting each other and making quick decisions.
What is one thing readers would be surprised to learn about you?
Richard is getting married in two weeks and Simeon lived in India.
- Fairfax Media