Thursday 16th October 2014
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A new film to be directed by Lee Tamahori closed its equity crowd-funding offer overnight, coming in just shy of its maximum $500,000 target, after earlier extending the offer's deadline.
'The Patriarch', a film to be based on Witi Ihimaera's novel 'Bulibasha', locked in its minimum target of $300,000 at the end of last month, after pushing out the deadline by two weeks, on equity crowd-funding website, Snowball Effect. All up, 181 people bought $453,800 worth of non-voting 'preferred' shares at $1 each, in the equity crowd-funder's second campaign. Backers of the film had hoped to secure a maximum of $500,000, the final 5.3 percent of the film's $9.4 million budget.
The project looked to build on Tamahori's success with his first, and to date only, New Zealand film, 'Once Were Warriors'. Filmed on a $2 million budget in 1994, it went on to return $6.5 million. Patriarch's minimum investment was $100, and investors were promised to recoup their initial investment, as well as a 20 percent annual premium, depending on the film's success and after distributors had been paid.
The Patriarch's success compares to Snowball's only other offer, the Blenheim boutique brewer, Renaissance, which raised its maximum $700,000 of new capital from 287 investors in one and a half weeks, a quarter of the time the offer was open to investors to commit funds. Shares were offered with a $500 minimum investment at $2 apiece for 12.28 percent of the Renaissance.
Snowball is licensed under the new Financial Markets Conduct Act, which came into effect on April 1, providing a regime where projects can raise a maximum of $2 million, offering equity through crowd-sourcing platforms. The licensing is part of the Financial Markets Authority's expanded brief to bolster New Zealand's capital markets, but the new platforms do carry risks for investors, with reduced compliance obligations for small capital raisings compared to companies listed on the NZX mainboard.
Meanwhile, Pledge Me, the country's only other licensed equity crowd-funding platform, launched its first two equity offers on Sept. 26, giving investors the chance to buy into New Zealand's first computer museum, backed by Apple Inc co-founder Steve Wozniak, and a hovercraft ferry in the South Island.
Techvana Operating, which is looking to raise a minimum of $250,000 and up to $750,000 to secure a location and build New Zealand’s first computer museum in Auckland, has so far raised $4,000 from 20 pledgers. The company is offering a maximum of 15,000 shares valued at $50 a piece with a minimum investment of at least two shares. It offers a 28 percent return on investment with dividends starting in 2017, as well as other loyalty discounts at the museum, proportional to the amount invested. Techvana is hoping to lure investors with its patron Apple's Wozniak.
The second offer, H2Explore, has raised $3,000 of its minimum target of $250,000, from three pledgers so far. The tourist operation is looking for up to $300,000 to build a Twizel-based hovercraft to ferry tourists across the Tasman river and Lake Pukaki. It is hoping to lure investors by offering shares at $500 apiece, with those investing $1,000 plus earning an annual free hovercraft ride as well as paying dividends.
With exclusive rights to operate on the Tasman river and Lake Pukaki for the next 10 years, and the only commercial hovercraft operation in the country, it expects to have an annual profit of $689,487, in the first year of operation, which it forecasts will grow to $1.5 million by its fifth year of operation, from which it will pay dividends to shareholders.
H2Explore's offer closes at 5 pm on Nov. 11, while Techvana wraps up at 8 pm Nov. 27.
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