Quick off the mark to take PledgeMe to Australia

PledgeMe co-founder Anna Guenther is basing herself in Australia as equity crowdfunding is...
PledgeMe co-founder Anna Guenther is basing herself in Australia as equity crowdfunding is introduced in the country. PHOTO: ASHLEY CHURCH
Anna Guenther is walking down a street in Brisbane when she answers the phone.

Asked if the weather is considerably warmer than back in New Zealand, she laughs, ``Oh my gosh, I think I brought the rain with me''.

It is a busy time for Ms Guenther (31), the co-founder and chief executive of PledgeMe, who is preparing to fly to Europe to speak at the World Export Development Forum, a United Nations subsidiary.

Since PledgeMe's launch in 2014, just under $17 million has been raised under the crowdfunding platform in New Zealand - $7 million of that in the last 14 months.

Last month, the Wellington-based platform announced plans to enter the Australian market. The Australian Corporations Amendment (Crowd-sourced Funding) Act 2017, which provided a legislative framework for equity crowdfunding took effect from September 29.

That same day, Ms Guenther - who completed her Masters of Entrepreneurship at the University of Otago - hopped on a plane for Australia.

PledgeMe received a spot in the HotDesQ programme run by the Queensland government, which provided networks, support and funding for companies to relocate to the state.

The aim was to be there on the ground, connect with potential partners, work with local companies and assess the final regulatory landscape.

While excited Australia was finally entering the space, she also sounded a note of caution. Equity crowdfunding was introduced in the United States last year, but it seemed over-regulation had stymied the potential.

In the first year, only $NZ52million was invested through crowdfunding platforms, compared with $12.4 million in New Zealand's first year, despite New Zealand only having 2% of the population of the US.

``The subdued first year in the US could also be due to the availability of capital, but when running an equity crowdfunding campaign costs $20,000-$50,000, plus ongoing compliance costs, early stage and growing companies just won't go there,'' she said.

PledgeMe had been keeping an eye on Australia for a few years and knew it ``had to be here'' to see if it could help make it better and also bring its experience in New Zealand and tailor it in Australia. It was still over-regulated and had not been done well in Australia, she said.

While Australia was similar to New Zealand in many ways, there were some interesting differences.

``They definitely love rules ...there's so many different layers of rules. It's been interesting being in a market so heavily regulated,'' she said.

There were also a lot of companies doing some really interesting things in Australia, especially in the social enterprise space.

Ms Guenther, who planned to be in Australia for at least six months, described it as an exciting new challenge.

It made sense for her to be the one to cross the Tasman ``and be that sort of person on the ground building it and bringing in the team to help''.

There was a team of seven working on PledgeMe, both part-time and full-time, and an external board of directors.

It had been a busy time recently, with PledgeMe also launching crowd lending last year, she said.

She was excited about that as it allowed not just companies to raise money but also charities.

One project she was enthused about was Cultivate Christchurch, a social enterprise that combined productive urban farming, youth development and community participation.

Revenue to sustain the work was generated through three products - produce, compost and edible landscaping.

In a novel approach, Broccoli Bonds were offered as a return option. Investors could choose either cash, produce or a mix of both.

The project was focused on at-risk youth in Christchurch and reconnecting them to the land.

There had been some big campaigns on equity crowdfunding in New Zealand: ParrotDog brewery raised $2 million in just two days, while another brewing company was the quickest campaign, raising $500,000 in 30 minutes.

PledgeMe came close to turning a profit in the 2017 financial year and growth was exciting, Ms Guenther said.

The business itself was still a service-based business and it depended on the campaigns it was getting.

It was ``awesome'' to see companies coming through now that really understood how crowdfunding worked.

It had definitely been an education process. At the start, people expected there to ``be a crowd in the cloud waiting to give you money''.

Reflecting back on her days studying in Dunedin, Ms Guenther said she definitely did not think she - and PledgeMe - would be where they were today, when she was writing her thesis.

``It's definitely progressed well beyond the initial business plan I wrote.''

 

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