Funding options

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Let's have a quick look into some of the segments where you can source investment. In specific let's have a look into a couple of different options of where you can find money, and the people who are keen to invest in your startup or small business.

There are many different options available to you, ranging from friends, family, personal investors, private investors. You could have individual angels, angel groups (which are more formal groups). There could also be corporate clients, or corporate investors. It could also include large venture capitalist companies, smaller venture capitalist companies, banks, crowdfunding, initial public offerings, and these days, even initial coin offerings.

So let's have a look at some of the pros and cons on some of these to really get a better understanding of what's most suited to you.

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The quickest way is always personal savings. As soon as you need the cash, you open your bank account and get the money out. The problem is that if your business does fail, you lose your own personal savings. What you may also lose out on is that you become very self-driven, and you lack the input from other people and investors.

One of the key benefits towards angel investors, is their expertise and their previous experience in starting companies and new markets and new industries. So although personal investment will allow you to very quickly tap into some cash, often you will miss out on valuable expertise.

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Another quick way to access investment, is through friends and family. Although it speeds up the process and you get cash quickly, often friends and family don't necessarily check the viability of your business plan. So your business might not necessarily be good, but you will get investment. Often these personal relationships can also quickly be on the line if the business doesn't work out the way it's planned to.

Like personal savings, family and friends often do not bring anything else to the table, other than the investment itself.

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You can also access capital through crowdfunding. Crowdfunding allows you to raise small amounts of capital from a large group of people. Often through the power of the internet. What you can actually do is pre-sell a product, and see what the market actually thinks about your product or service that you're selling. In New Zealand you have a couple of different crowdfunding platforms available to you. They range from equity to product offerings, or even reward systems as a benefit to investors. So you can start off with Equitise, Pledge Me, Snowball Effect and Kickstarter. Depending on what you're looking to achieve, and who your target audience is, choose one of the platforms.

The pro is that quite quickly you can find your early customers. Some quick cash. However, crowdfunding campaigns, are not as easy to set up. They take a lot of time, a lot of marketing, and often some upfront capital to actually raise cash.

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Angel investors are another great way to get access to capital. Now the pro about angel investors is that they have got a vast range of experience and expertise to tap into. Specifically around formal angel groups. You will have expertise from sales, marketing, various industries, finance and so on. The good thing is that you can get access to cash and expertise, however one of the down sides is that you will lose some control of your business in return for that capital.

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If you're seeking millions of dollars, venture capital is a great way to access some funding. It's a good way to raise a lot of money and give you credibility quite quickly. This opens doors to extra networks, extra partners, and also gives you access to a wide set of expertise. One of the downsides of raising cash through venture capitalists is that due to the large amounts of money that you're raising, often you're forced to give a way a larger stake within your company. So if you do choose to use venture capitalists, make sure that you are happy with it and that the growth rate continues to be stable as you don't want to give away too much of your company too early.

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A more traditional way to investment is that through bank loans. Now through a predetermined interest rate, you can quickly secure some cash. The pro about it is you do not have to give away any equity in your company, just keep in mind that there's a lot of documentation needed, and proof needed, to make sure that your business can succeed, and that the bank can recuperate their cash. Also keep in mind that you will have to repay that loan, doesn't matter whether your business succeeds or fails.

Another great way to access capital in New Zealand, is that through government grants. The government’s' investment arm: Callaghan Innovation, has a fund that goes out through research and development grants. If your company does hit the criteria for it, you're able to recuperate a percentage of your research and development costs. This is provided that you're doing something new, novel, innovative or that hasn't been done before. But quite quickly your cost of investment can be halved.

A good way to start the process around your R&D grants, is through meeting one of your local government authorities. If you're interested to find a little bit more around how you can apply, or whether you actually do qualify for R&D grants, mention it in your one-on-one meeting with us and I'm sure we can point you in the right direction of whether and where you can get access to R&D grants.


In New Zealand you have access to a whole bunch of different investment options. Have a think about whether you want to take investment from private investors: e.g might be friends, families, your private savings. Or if you want to receive investment from informal or formal angel investor groups, or high net-worth individuals. It's not until the later stages that you really want venture capital, however you still have access to banks, and bank loans and you've got support for R&D grants of government. So have a think about which might be the best suited for you, and what type of risks and equity you want to give away.