Equity Crowdfunding with PledgeMe
helps companies raise the funding they need to grow. These campaigns offer equity in return for investment, bringing your crowd into your company and making them investors. If the campaign meets its minimum target, pledgers become shareholders, and have an ongoing stake in the company’s success.
Equity crowdfunding campaigns make it easier for companies to seek investment by:
- lowering the barriers to entry
- simplifying the process
- widening the reach of investment campaigns
PledgeMe provides interactive tools to help companies:
- reach their investment goals
- maintain ongoing relationships with investors
- simplify decision making
- increase transparency
Parent Interviews raised over $50,000 from their crowd to fund the tech-startup’s customer acquisition phase. Co-founder Indy Griffiths, the world’s youngest successful equity crowdfunder, activated his existing networks to make this campaign a success.
Brianne West’s solid cosmetics company raised $200,000 by engaging customers. Over 65% of Brianne’s investors were people who bought her healthy and sustainably sourced products. Sorbet’s campaign shows the power of activating your crowd.
Yeastie Boys raised $500,000 through their crowd in less than 30 minutes. But running the campaign, they not only hit their goal but raised the company’s profile. They now have 200+ shareholders spreading the Yeastie Boys word. Their campaign was successful due to Yeastie’s careful planning and effective communication with their crowd.
Equity CrowdfundingWhat Are The Benefits?
Democratised funding decisions. Lowering the barriers for companies to seek funding, and for investors to invest. More transparency. Makes the process easier. Widens the reach (you can put the campaign out publically to ALL of your networks). More interactive. Creates long term relationships with your investors. And lastly, you could make a return.What Are The Risks?
The company might not be able to grow to plan. You might never make a return on your investment (or get the money back).How Do I Become An Investor?
Equity crowdfunding has not only lowered the barriers for companies raising investment, it has also made it easier for investors to invest. All you have to do is register and then pledge to the campaign you want to invest in.
Registration means you’re registered as an investor, you acknowledge start up investment is risky, and you’ve provided legit details about yourself.
You only need to do this if you want to pledge to invest - not for rewards-based projects.
Creating An Equity Campaign
If you're looking for basic information about how equity investment works:
How much does it cost?
(See below for details)
$1,500 (zero rated)
(Paid before campaign starts)
5% of total raised if goal met by deadline (zero rated)
Credit card fee
2.5% + 25 cents per transaction
(Average fee to date has been 0.5%. Only charged if goal met by deadline)
To use PledgeMe's Shareholder Portal there is a fee of $25 (plus GST) per month, first two months free. It's optional to use this service.
You may incur additional costs launching and running your campaign, ranging from legal and accounting to design and comms.
What is CrowdfundingU?
CrowdfundingU is PledgeMe’s programme to make sure your equity crowdfunding campaign is in the best shape it can be before it goes live. Over the six sessions, we help you build, plan, and generate a buzz around your campaign. The programme focusses on key areas of crafting your pitch and connecting with your crowd. There is a one-off fee of $1,500 for this.
Who is going to pledge on my equity campaign?
Your crowd. These could be family, friends, existing business partners, and/or customers. To run a successful campaign Yyou’ll need to engage with them:, tell them why you need the investment, and talk to them about why they should invest, tell them if there will be a way to make money back in dividends or a trade sale down the line? If you have a good investment proposition, activate your crowd and get them to tap into their networks your campaign will spread to the general public. You’ll need to use all the tools in your toolkit to get your campaign out there — social media, traditional media, phone calling, launch parties… Whatever gets awareness about your campaign raised in a fun and interesting way.
What kind of information do I need to share to get my crowd on board?
Your campaign should be part story and inspiration, and part cold hard facts. You’ll need to talk about your company, your team, and why you need investment and also your current financials, three year projections, and valuation of your company. We highly recommend a pitch video, and offering your crowd rewards as an immediate return for their investment. And, for the love of all that's good, if you're making a claim, reference it and show your assumptions. You’re not allowed to include misleading or deceptive claims in your campaign.
How do I get my campaign up and running?
Head along to the “Create” tab and enter your details into the equity campaign request. Then we'll be in touch to get you set up for CrowdfundingU.
How quickly can I go live?
Before your first equity crowdfunding campaign you’ll need to run through our CrowdfundingU programme. This takes up to six weeks and will prepare you and your company for running a crowdfunding campaign. During this time PledgeMe will work with you to get your campaign into the best possible shape it can be. Our experience in this space shows that the most successful campaigns require (at least) several weeks of planning, priming and positioning before going out to your crowd.
Can I raise investment through PledgeMe more than once?
You sure can! The only limitation is a cap on raising more than $2 million per year. If you’re looking to create a more than one campaign in any year we’ll walk you through that. You will need to think about how future investment could affect your status under the Takeovers Code (eg. if you have more than 50 shareholders). There is more on this in the Equity Crowdfunding guide.
Is there anyone that can help me with this?
PledgeMe is here to help. We will give you feedback on your campaign and are happy to chat if you need more support. You will learn a lot during CrowdfundingU, and can read our education guide.
If you’re looking for some crash course in DIY crowdfunding online, here are a few links you should check out:
Making a pitch video doesn't have to be hard. There are plenty of companies out there who can help you put together a compelling pitch video. You can even do it yourself if you have access to a decent camera and some editing software. Read more about great pitch videos here.
Confused by financial terms? Download Unravelling Financial Jargon.
The Commission for Financial Literacy also has some comprehensive training material here.
Need some investor literacy? Read more by the FMA here.
NZTE outlines some other sources of capital here.
Confused about valuation? Check out this infographic.
If you need help doing things like making your pitch video of financial forecasting, we know people who can lend a helping hand.
You might also want to talk to your local economic development agency, incubator, or read through the Investment Ready Guide by NZTE.
Is there a cap on how much someone can invest?
No. The only cap is for companies seeking investment. Investors can put as much money into shares through PledgeMe as they want. However, it is important to remember that when you’re investing, startup companies are risky — so invest in companies you believe in and think you’ll get something in return for your money.
What if someone steals my idea?
It’s all about execution. You need money and support to turn your idea into reality. Crowdfunding is a great way to get both. At some point you’re going to have to let the idea out of the bag. If you're not quite ready to do that then it probably isn't the right time to try equity crowdfunding!
Who is in charge of managing shareholders?
You are ultimately responsible for managing your shareholders. To help you PledgeMe has built an online communications portal as a convenient way to stay in contact with them. It’s up to you (or your appointed director) to create discussions and decisions for your shareholders within the portal. You’ll also need to send out annual reports, and invite your shareholders along to your AGM. Even if you don’t use our comms portal, it is best practice to keep your shareholders in the loop. They’re your crowd so give them something to cheer about.
Is it just about the money?
Nope. There is so much more your investors can offer. As, one of our favourite CEO’s recently told us, this “isn’t dumb money, it’s love money”. And there’s so much more that comes with it than just cold hard cash.
Do I need to repay the money?
As long as you haven't mislead your investors, no. They've taken a risk to invest in you. In saying that, you should do all you can to achieve the forecasts you gave them.
Can I direct people to my campaign before it launches?
Yes! Once we have approved your campaign and you have added a picture and a blurb, PledgeMe can make it so your campaign appears on the site as "coming soon".
This allows potential pledgers to follow your campaign and receive a notification when your campaign goes live.
Can my campaign be private?
Yes! It’s super simple: select the private option when you’re setting up your campaign.
What does making my campaign private mean?
Selecting a private campaign means that your campaign won’t be visible on the main page or be searchable on PledgeMe. Only people who have the link will be able to visit your campaign page. This means you have a bit more control over who sees your information while still going through the PledgeMe process. Other than the extra privacy, there aren’t really any other differences to normal campaigns.
Why would I choose to do a private campaign?
There are two main reasons you might want to run a private campaign: doing a friends and family and/or initial investment round or just not wanting to show the world what you’re up to yet.
Either way, PledgeMe’s platform provides you with a simple way of getting your offer out to your crowd and allowing them to invest.
What's the difference between doing a public and a private campaign?
In terms of readying your company for accepting investment: nothing.
Regardless of running a public or a private campaign, a company is going to need to follow the same process to putting forward an offer on our platform. The only difference is that instead of the offer being visible to anyone on pledgeme.co.nz, it will only go out to those you choose to share it with.
One potential difference for a private campaign is that some of the costs around getting your campaign ready may be reduced or eliminated (compared to public campaigns). Things like pitch videos cost money and, depending on the private campaign, may not be necessary.
What is the Shareholders Portal?
What is the Shareholders Portal?
PledgeMe’s Shareholder Portal provides a space for you to have ongoing private communication with your shareholders.
You can use it for general discussions, monthly shareholder updates, requests for advice / support, and to vote on resolutions.
The portal is great because
it stores your communication and interaction with shareholders in one place,
reduces email overload,
makes your shareholder discussions many to many (instead of oldschool 1:1), and
allows engagement and actual discussion with your crowd!
There is a fee of $25 (plus GST) per month, first two months free. It’s optional to use this service.
Pledging On An Equity Campaign
How do you take my pledge to invest?
There are two ways to pledge to invest, via credit card or bank deposit. Pledging using a credit card generates a token and we charge your card the day after the campaign successfully finishes. We suggest using credit cards for investments under $1000.
For investments over $1000, we recommend making a bank deposit. Once the campaign successfully closes, we will email you our bank details including a reference number to use when making the transfer. We hold your pledge in a trust account until the campaign is completed.
What is the register button for?
Registering to invest means you have acknowledged startup investment is risky, and you’ve provided your legal name, postal address, date of birth, and passport / drivers license details (or uploads) and that it is all legit.
You only need to do this if you want to pledge to invest and you only need to do it once.
What happens if the company I’ve pledged to doesn’t make their goal? You won’t be charged. If the goal is met, you will be charged the next business day (via your credit card) or be required to pay within 5 working days.
Do I have to pay tax on my investment?
You’ll need to chat to your accountant about this.
Do I get to keep in touch with the company after I invest?
Most definitely. You can keep in touch with them through PledgeMe’s built in communication portal if they choose to use it. We also hope you’ll meet the team in real life as well. You’ve just signed up for an ongoing relationship with them — and they might ask for your brains at some point!
How do I know the company won’t run away to Rio?
PledgeMe runs background checks on company directors and sizes up companies before equity crowdfunding campaigns go live. The biggest weapon against getting ripped off is your own early warning system: if the investment proposition doesn’t add up, or you don’t trust the entrepreneur, don’t invest!
Are you guys, like, angels?
Although Team PledgeMe is pretty divine, we’re not an angel group. There’s no lead investor, we leave the due diligence of all investments up to you, the crowd. We do basic background checks and comply with the law but we’re just a platform that gives companies the ability to seek funding. You’re the ones who add the magic.
Can I pledge if I am outside New Zealand?
Yes, but you’ll need to upload a copy of your passport and proof of address when you register to invest. You will also need to confirm you are legally allowed to invest in your home country, and we require you to confirm you are a wholesale investor.
What is your complaints procedure?
If you’ve got a problem, head over to our complaints page. You will need to tell us what is up so we can help you.
We're here to help!
PledgeMe is here to help. We'll give you feedback on your project and are happy to chat if you need more support. We can also offer tips and advice and specialist support if you need it. Don't forget about the guide to equity crowdfunding either!
027 Pledge 1
(027 753 3431)
c/o Biz Dojo
115 Tory Street
Wellington, New Zealand
19 Ruru Street
Auckland, New Zealand