Snowball Effect has developed an auto-investing service for wholesale investors. The service is based on feedback from a number of investors that would like to invest in a range of companies through Snowball Effect, but would prefer to automatically filter and invest based on specific objective criteria. For investors, this reduces the amount of reading and analysis required to select investments, and ensures diversification.
The key benefits
- Early access to each offer.
- Convenience of automated selection, while retaining the ability to opt out of an investment.
- Easy diversification.
- No fees.
The auto-investing service is available to “wholesale investors” only (as defined in the Financial Markets Conduct Act 2013). For information on whether you meet the wholesale investor criteria, please view our summary of the criteria.
If the auto-investing service interests you, or you’d like to discuss the wholesale investor criteria, please contact Cowan Finch, our Head of Private Capital, at [email protected] to discuss further or set up your preferred criteria.
How it works
Investors choose a number of objective criteria to automate selection of their investments. Example criteria are:
- The company is making an offer to Snowball Effect members (required criteria).
- The company reaches or exceeds its funding target (required criteria).
- At least one investor (or investor group) is investing $50,000 or more on the same terms.
- Current directors, employees, or shareholders are investing $50,000 or more on the same terms.
- The company has at least one non-executive director.
- The company earned revenue of at least $300,000 in the previous financial year as per the company’s disclosed accounts.
- The company was profitable in the previous financial year as per the company’s disclosed accounts.
Investors select the amount to invest, and the number of companies to spread the investment over. The minimum commitment is $50,000. For example:
- $50,000 in 5 companies (therefore $10,000 per company).
- $100,000 in 10 companies (therefore $10,000 per company).
- $250,000 in 10 companies (therefore $25,000 per company).
- $500,000 in 10 companies (therefore $50,000 per company).
- Complete a direct debit authority allowing us to transfer the specified funds from your account, which will be held in a trust account for you.
- Give us standing authority to transfer your allocated amount from that trust account to an issuing company’s trust account when your selection criteria are met.
- Give us power of attorney to execute subscription agreements (and potentially shareholder agreements) on your behalf.
And that’s all you need to do.
What happens next
When an offer meets your specified criteria:
- We will email you to notify you, along with a high level description of the offer, and give you five business days to "opt out" of automatically subscribing for shares in the offer.
- If you have not opted out by the expiration of the opt out period, we will sign a subscription agreement (and potentially shareholder agreement) on your behalf. When the offer closes we will transfer the specified funds from your trust account to the company’s trust account.
- You will receive an email notification when the offer has closed and shares are issued.
- If you click "opt out" within the opt out period, no further action will be taken and no funds will be transferred from your balance in our trust account in relation to that offer.
- You will be notified by each company via email if there is a matter which requires your attention, such as pre-emptive rights, shareholder voting, or dividends.
You can request return of any uninvested funds from Snowball Effect within 3 business days at any time. Funds are returned without interest.
Snowball Effect is not currently charging investors any fees for this service. We will notify you in advance and give you the option to opt out of the service if we introduce fees in the future.
We’re excited by the opportunities to make investing even simpler for wholesale investors, and we look forward to discussing this product further with you.
The best person to contact Cowan Finch, Head of Private Capital on [email protected].