Task: Write a comprehensive report on equity crowd funding in New Zealand
The main objective of this assessment is to introduce students to the world of equity crowd funding in the New Zealand market. The FMA (Financial Market Authority) issues licences to provide crowdfunding services. Crowdfunding is a type of financial market service covered by the FMC Act, and licensed crowdfunding service providers have to meet and maintain certain minimum standards.
Equity crowdfunding is an alternative method for businesses to raise money by issuing shares. Instead of a formal public offering of shares on the New Zealand Stock Exchange in New Zealand or making a private offer to a limited number, a business can use a licensed equity crowdfunding platform to offer shares to retail and/or wholesale investors.
The purpose of equity crowdfunding is to match multiple investors seeking to invest relatively small amounts with companies who wish to raise funds. Equity crowdfunding allows businesses to raise money without burdensome compliance obligations and investors to spread their risk by investing in multiple different businesses. It provides a way for start-up and existing businesses to raise money with reduced costs and requirements in circumstances where institutional funding may not be available.