More options for companies and investors

  • Written by Cowan Finch
  • Published on

Over the past two years, Snowball Effect has raised over $21m of equity capital for 24 companies. An infographic showing some of the key statistics from our first two years can be found here.

Over this time, we've expanded our offering beyond public offers and now also deliver a broad range of services in the private capital space. We've developed these services in response to the large number of companies approaching us wanting bespoke capital raising assistance, and investors who are interested in access to private opportunities.

The wholesale investor market has typically been very fragmented. It's just a start, but we've already aggregated New Zealand's largest network of wholesale investors with an interest in growth stage businesses. This pool of experienced investors is interested in seeing private deals, and in some instances becoming actively involved in the companies that they invest in. We help make the whole process of companies accessing capital a lot more efficient than it has been.

Investors that are interested in these opportunities can register as a wholesale investor here.

Private offers

A private offer allows companies to restrict access to a defined audience. Companies may prefer a private offer for the following reasons:

  • Preference for a strategic investor who has experience in a relevant sector, or certain capabilities that he or she will bring along with their investment.
  • Preference to target only a small number of larger investors.
  • A private offer allows the company to privately validate valuation and investor appetite.
  • The company may not want sensitive information in the market yet.
  • The company may prefer to keep its powder dry at this stage in terms of the media coverage that a public offer attracts.

Generally, a private offer will only be made to investors who have certified that they are a wholesale investor. However, a private offer can be made exclusively to a company's own network.

A company has more control of an offer when it is made privately. However, this increased control needs to be weighed against the reduced brand exposure and smaller investor pool versus a public offer.

Private offers can also be used to facilitate rights issues. Our technology allows for an efficient online process that is easy for investors and cost efficient for the company.

Preparing for a capital raise

Many growth companies find themselves at the stage where they consider that more capital is required, but haven't had the time or advice to properly assess the best course of action or develop the strategy necessary to successfully raise funds. Raising capital is hard, especially for young growth companies. Where do you start? Who do you talk to? What type of capital is most appropriate for your business at its current stage?

We're seeing many companies grappling with this dilemma and looking to us to provide more than just a capital raising service. They first want to understand their options and then get help in becoming investment ready.

The time that companies spend in adequately preparing and articulating their growth strategy and capital raising plan is invaluable when it comes to approaching investors. The process we provide also helps companies solidify their plans, and make decisions regarding how fresh capital can help them to grow. In our experience, companies who are well prepared are more attractive investment propositions, are able to better support their valuation, and have more success in raising funds.

We see our role as supporting private companies in becoming investment ready, then providing them with a range of capital raising options and channels to the most suitable investor audience.

Further information

Feel free to contact me at [email protected] or 027 489 8947 if you would like to discuss our private capital services in more detail.