 Welcome back. If you're still standing outside the dome and welcome you in I was we're just about to kick off for second to last session of the day Really excited to welcome Anna to speak today On a day where we discussed new frontiers Anna is chief bubble blower at pledge me She's also a great advocate and explorer of woman and entrepreneurship And I'm looking forward to developing our relationship and that respect moving forward And Anna brings a depth of experience also from New Zealand trade and enterprise So she comes from a really grounded solid position and I'm looking forward to is our friendship develops into the future How you catapult? That knowledge and use that into the future for the benefit of New Zealand. So Anna welcome And a pause already that's great. How do you send me thing? Is this is this on yeah, yeah, yeah So my name is Anna Gunther and I do call myself the chief bubble blower of pledge me my lawyers like calling me the CEO I let them do that because it makes them happy But um my background is as stated for all of my sins I work for the government which I think makes me a little bit broken because I like building industries not just one company So I make friends with everyone But my background there was actually in that grant that Shane was talking about earlier the enterprise development grants So my early early days were actually supporting to get companies overseas And I love the work that we did but I felt like there was so much more that could be done in the funding of these companies So once I got to my peak at my NZT career I decided to go back actually while working go back and study as well So to my master's entrepreneurship and pledge me was actually my thesis project So trying to figure out if crowdfunding locally would make sense or not So crowdfunding how many people here have heard of crowdfunding before? Thank you Sometimes I don't get that response. Has anyone here actually crowdfunded anything before as in ran a project oh There's a good crew of you Okay So crowdfunding just for those of you that want a little bit of a reiteration is just the idea that you can go Out to your crowd to fund something and it's really as simple as that You set a really clear deadline and goal of what you want to raise And you just go for it and the really exciting thing is in New Zealand now. There's two ways that you can crowdfund There's not just project-based crowdfunding, which is sort of the historical Kickstarter model, but there's also equity crowdfunding so Equity crowdfunding really is a young industry in New Zealand the laws just passed in April 2014 and the first platforms were licensed a few months later It's young just not only in terms of how long it's been around but also the types of people that are using it So this kid Indy. He's 19. He started his company when he's 17 and he's getting ready to launch his first equity campaign next week It's also a growing industry. So Not just in terms of how many platforms there are there's now four licensed platforms in New Zealand and and hundreds of licensed platforms around the world But also the sizes of campaigns that are coming through so two weeks ago We ran a campaign for a local brewery called Eastie Boys and they managed to raise half a million dollars in half an hour And the exciting thing about that was only 200 of the 800 pre-registered investors actually managed to get through in that round So the scale of what they could have done was probably significantly larger We just managed to get most of those 200 people in a room drinking beer when the campaign went live and that's that's a few of them But what we're really passionate about at Pledge Me is this idea that technology is really just enhancing community not replacing it And that's the idea behind equity crowdfunding. We think as well You know, you don't have to go and find someone who you don't know to fund your company You actually have a crowd of people already that can support you with what you do And this example is actually from the project space But we had a group down in Jeanine that are building a wind turbine And they wanted to crowdfund the cost to build a measurement tower to figure out exactly where this wind turbine should go And they went out to their crowd for rewards for their project campaign And they came back with things like, you know blues lessons and unicycle lessons and one person said that for $20 They'd home killed chickens for them I was like for more would you not? But they're actually getting ready to an equity campaign as well Internationally equity crowdfunding actually has been happening for a little while specifically in the UK One of my favorite examples is also a brewery beer goes down really well guys But Brew Dogs is a Scottish brewery and they've done three equity crowdfunding rounds to date the last one They raised a million pounds in 24 hours and the exciting thing about them is they're not just offering shares in their company But they're offering rewards as well. So you get a 10% discount you get invited to their annual general meeting Which is literally a piss up in a brewery You can bring you can bring a friend And they're really making the crowd part of what they do and not just their crowd They're actually managing to get their bank on board. So they're leveraging the money They raise off future bank loans and back and forth for the past three rounds a Bit closer to home in the tech space one of my favorite examples from the UK is escape the city Has anyone ever heard of them before two or three so escape the city Shane? You've just heard of it because I've told you it before Okay, sorry So escape the city is a tech company in the UK that wanted to help professionals find jobs outside of London Which is actually harder than it sounds and when they first started they just bootstrapped it They had 18,000 users and they started getting approached by angels and VCs to fund them And they were like all we might try this new thing called equity crowdfunding out and they in a week managed to raise half a million pounds and then the following within the following few months did it again And that just showed that they're their crowd really wanted what they were building and also that they could fund it through through their customers So the US is on board with this as well They say in 2012 they changed their laws to bring in the jobs act Which is allows online crowdfunding and titles one and two is for sophisticated investors and titles three hasn't quite come through yet But the really exciting thing is my favorite podcast equity crowdfunded does anyone else listen to startup So great, and they managed to raise 200k in a few hours when they did it But again, they had to make sure the investors were sophisticated And I reckon this is really about time I'm not sure if anyone else watched what happened with Oculus Rift, but they crowdfunded through Kickstarter and did an amazing job But then they sold to Facebook and there was a lot of backlash from people that said hey that $50 t-shirt that I bought I would have been a $40,000 return if that had been an equity investment And of course at the time that wasn't allowed and they knew what they're getting into But it's just an interesting statement of companies that are getting prepared to sell Potentially they should be thinking about equity crowdfunding over running a project And in New Zealand a lot of you already know these stats already, but 50 million dollars a year is invested by angels Approximately I'm still unsure on what it is in the VC space So if someone from Movaq wants to chat to me later about that that'd be great But 33 billion is lent by the banks so you can see there's a huge disconnect between the money That's being invested by angels and the money that's being lent by the banks and that's only the companies that can actually get a bank loan We do know from international studies that up to five times the amount of money That's being invested by angels is being invested by family and friends And I'm not sure if anyone else here watched Rowan Simpson's absolutely amazing rants on Twitter recently Where he was talking about the dark net and he said, you know, yes, 50 million is being invested by angels But I know so many private investors that are investing way more than that in New Zealand So what we're excited about with equity crowdfunding is actually taps into that family and friend network But actually moves wider than as well and provides an easy way or an easier way for companies to figure out the process of going through an investment round Personally, I know the pains of seeking investment. We actually only did our first round Well, we did two rounds actually last year But that was after two years of bootstrapping and two years of trying to figure out what it actually meant to do an investment round And I have my master's in entrepreneurship You would think that I would actually understand it a bit more But it really took two years of figuring it out and making those relationships with people to run our first round Which closed in a week and our second round which closed in 23 hours, but I'll tell you a little bit more about that soon The New Zealand landscape around the changes in the legislation is really interesting So companies can raise up to two million dollars in a 12 month period So they could run repeated rounds and that two million dollars is only the two million dollars through the platform So you could actually seek match funding from sophisticated investors around that as well And what it does is it lowers the compliance to go to public You don't have to create a public prospectus. Has anyone here created a public prospectus before? Two hands painful Yeah We have at least two investors of ours that have done that process before and they just complain about it horrifically, but it lowers that compliance cost the only real Thing behind that though is the company can't be false or misleading So they have to be really clear about what their assumptions are and why they're putting the numbers and and the projections into their plan that they are And the companies have to go through a licensed platform They can't just get on to Facebook and decide they're going to start equity crowdfunding through their Facebook page So in our second round that we did last year We actually decided to eat our own dog food and we crowdfunded crowdfunding So we went out to our user base of 30,000 users and our family and our friends And said we were gonna try to raise this money to take pledge me to the next level around the equity crowdfunding side of things And we managed to raise it was just a hundred thousand dollars But we did it in 23 hours and the sad thing about that is I actually gave my friend friends and family 22 hours Before we really started announcing it to the public and sent out our newsletter So in fact, we probably raised most of that money in that that one hour but I was again being really nice to my family and friends and What we have realized is this whole process that I sort of touched on earlier is that good education is key Kiwi companies don't really understand what it means to go out and do an investment round We don't learn it really anywhere and there are lots of amazing people that talk companies through it But it still is incredibly hard and incredibly Not disillusioning but you know, you sort of think that you're not smart enough to do it You have to go and get advisors that are expensive or go out and get support We find that one of the hardest things for lots of companies is their financials. They're too scared to forecast things They don't really know how to do it. So Education is key as well as support around that And one of the things that we've done is with our learning of getting ready to equity crowdfunding actually doing ourselves and watching other People do it is we've created a bit of a guide. It's really really really long So we put a lot of illustrations in there to make it a little bit less boring But it goes through everything everything from how to create a comms plan through to how to do your financials through to some Of the different valuation methods you could think about using but really we all know it's just a dark art But actually just trying to provide companies with just a really long guide of what they need to think about if they're getting ready to go As well as doing some offline events So, you know There's only so much that companies can do between the hours of 9 o'clock at 9 and 2 o'clock in the morning when they're thinking About their capital raising and reading information. We try to do offline events as well and the thing with that We call them pitch kitchens And we make two companies come along So not only do they hear the feedback that people are giving them But they hear the feedback that other companies are getting and we get a variety of people in the room to give feedback like friends Not like dragons, so we're not trying to tear these guys down We're just trying to give them support and ideas of how they can improve Because you know when you're in a company you all know this you know everything So sometimes it's really hard to discern what's gonna resonate with other people and what's not because you know all of it And so actually being able to pitch to these guys give these companies these ideas of what actually is making sense to the crowd And what potentially is way too overblown So now I'm just gonna quickly run through some of the things you need to think about if you're actually gonna do a crowdfunding Raise or someone you know is going to do it and then I'm gonna end on a little bit of what I think the future of equity crowdfunding is and some questions from you guys But the first thing is you have to be a New Zealand registered company a New Zealand registered company We get so much interest from overseas of companies that want to run campaigns through us And we also get interest from charities who want to run equity campaigns through us So you need to be a New Zealand registered company And you also need to know what the funding is for how is it going to grow your company or grow your impact? People need to see that the money is not just gonna keep you going on the same line that you're going There's actually growth and you know how you're gonna get there what your plan is You also need to know who your crowd is so coming into us and expecting that there's this crowd in the cloud That we're gonna provide to you is not how it works So having a clear idea in your mind of who those people are you're gonna talk to about at first and actually start talking to them See what they think There's a certain amount of documentation as well that's required so Companies need to have not only a business plan But also the current financials in the forecast and they have to have that ready pretty much from the get-go to start Getting feedback before they go live And they need to know what kind of money they need so what's the minimum? They need to make their growth plans happen and what's the maximum so they don't accidentally sell all of their company But that's a really important thing and often companies don't know they're just like give me whatever I can get and you're like Actually, you need some plans around this You also need to know who your team is so this is my team some of them. We're very crazy We do onesie Wednesday. We obviously don't take ourselves that seriously At least on Wednesdays But you need to be really clear about who the team is because people are investing in much in the product as they are On the people behind it so really clearly explaining who they are as important And I this this is for you Phil it was was in there before as well But this is how we do our board meetings over zoom not Skype But you really need to be clear in your in your plan as well But who the governance what your governance structure is even if it's just an advisory board Who are they who's supporting you with your plans and giving you that outside feedback from your day-to-day? Having a comms plan is important as well So companies often come in and just think you know I'm gonna hit go and then everything will happen, but you really need to plan it up in advance You know, how are you gonna communicate to your crowd? Who is your crowd? Are you gonna get a newsletter list going? This is what Eastie boys did they they they they sent out an invite to become backup vocalists in their band And they asked people not only to sign up to their newsletter list But also to provide feedback on what sort of rewards they should be offering as well as Shares in their company and so you know in the end they offered 10% discount on their product But lots people kept on asking if they could also get stew's pants as a reward He was really colorful pants. I don't know. I was a little bit concerned And then again, you just I've said it already, but you really need to know it resonates with your crowd You know, what's gonna get them on board what is gonna make them want to invest not just for a financial return? But also for an emotional return like what why are they getting involved? And you have to keep it balanced. I have seen so many companies with Premon evaluations and the millions that haven't actually sold anything yet So you need to make sure that when you're going out there You've shown not only what you've done in the past But also what you think you can achieve based on that and it needs to be It needs to be balanced to be based on your assumptions. Again, you can't be false and misleading And you have to fun, you know, this isn't just your stock standard grant application form filling out It's you going out to your crowd and they want to be interested. They're not just investing Just because you know, they want to be engaged what you're doing and one of my favorite examples is again Yeasty boys, but they their pitch video had the queen chugging back their beer in it And a lot of other random things and one woman I showed it to got so angry She said she wouldn't invest because she thought they looked like infantile boys and I was like, that's good Probably not the investor they wanted So but have fun in your campaigns and and make it about your personality Not just the fact that you're raising these funds to grow your company We say 50 is the magical number You need to have 50 people that you've talked to and who have actually validated the fact that they want to invest In your company, we're not going to force you to have pre-committed funds before you go live But we do want to know that you've had those conversations and gotten that feedback because it's really important Not only for the fact that they might invest in you But also for the fact that they're going to be sharing your campaign as soon as it goes live And they're going to feel like they're part of it because you told them about it before it actually happened And again, this is in the online world You know, you're running a campaign in the internet, but you're doing things offline as well because that's where we all live So having events is really important and I am the worst person to recommend this but having a launch party is really key I was too tired to run our launch party on the night that we actually launched So by the time that we did it the following day, we'd already been funded But it was really great because it turned into a celebration party and then oh my god, we've had our maximum party But having that is really important not just to get people in to see what you're doing But also to get your team excited about it and sharing what you're doing as well And media is super important not just the traditional media who do love these stories Although don't read the MBR comments. They are quite harsh But social media as well social media We've seen some amazing pick up on it and this is my favorite tweet that came out around the Eastie boys offer Which was a little bit mean But it said with its first six words the Eastie boys share offer opens itself up to twice the audience Moa bothered going for And they said dear potential Eastie boys and girls so After you've raised all this money because of course you have you have to think about how you're actually going to communicate with These shareholders and one of the things that we're recommending companies do is in the Constitution outline how they communicate so they can communicate electronically with these shareholders, but also make sure they can actually manage their voting of Resolutions online as well. So this is actually ours as you can see I sent out my notice of our annual general meeting at a very random time on the 29th of December But having that communication portal that we that we've built and I think other companies are doing the same Is really important to keep that communication going because these people don't just want an annual report They actually want to hear how you're going and support. However, they can they're not just investors There are people that have bought into you potentially because they use you so getting them to go out there and support you in Whatever way they can is going to be really beneficial to the company And we give this example of what if you're trying to enter the Australian market? Why wouldn't you go out to the 200 people that own a piece of you and ask them who you should be talking to? Maybe I'll even just ask them who you should be talking to in Australia Actually get them going out in Australia and telling bars that they want Just them to stock your beer or stock your product or whatever it is So turn that shareholder group into almost like an army Is militaristic as that sounds but people that are actually promoting you and selling you as well? And so I'm really excited about the future of the financial markets in New Zealand We're not getting rid of the old way That is totally still valid because there's other skills that come with that But we think we're doing it different and we're changing it and hopefully changing it for the better and one of the things that I'm most excited about is Not this so actually getting a bit more diversity in funding So getting more female founders funded getting more ewe funded getting different types of people funded There's a scary stat in the States and only 4% of VC funding goes to me female founders And so this and this is one of my favorite pictures. That's from 100% men it's a tumbler that shows all the places in the world where it's just all still old white men And this is the Metropolitan Museum of Art Who would have thought but more diversity is one of the things that I think the equity crowdfunding is seriously going to unlock I'm also excited about this idea of debt crowdfunding. So not just going out for equity and for investments but actually getting people on board in a different way and Chilango is a Mexican restaurant in the UK who went out and did just did just this and they sold burrito bonds In their company and you get an 8% return per annum, but you could get a bit more if you wanted to be paid back in burritos and I'm really hopeful like I think that there's a lot of changes happening mainly to technology and to some really good legislation That are enabling a future that I think that we will all be very excited to be part of and I think that equity crowdfunding naturally lends itself to Funding social enterprises because you're investing for so many different types of returns not just the money that you're getting back Hopefully, but also the impact that your money is having on society. So thank you Thank you very much Anna totally exciting so Time for questions or reflections Thanks for that and it was great overview and and it's super exciting to see the parallels of the this trend happening in Silicon Valley A question about you and your journey as an entrepreneur I mean one of the things I really respect about seeing you so far more from a distance it's just how much you identify your enterprise with doing good in the world and How much do you focus on how this platform of pledge me can really Benefit the New Zealand ecosystem in the global ecosystem, but I'm wondering if you could just share some thoughts on You know how you've thought about that how you've reconciled any sort of mismatches between incentives of do good versus make money and Any advice to aspiring entrepreneurs that that might you know fall in your footsteps Yeah, so I only actually and it sounds really bad I only call myself a social enterprise when I'm around people that I think will understand what that means Just because it is a really hard conversation. I used to work at New Zealand trade and enterprise and it's really funny I caught up with Pete Chris last year at an event and he's like, what are you doing? I was like, I'm doing the social enterprise and he's like, what's that? I was like, okay, I'm gonna define this for you and I didn't the end of it He's like, are we a social enterprise? No, your government But it is it is an interesting and growing space and it's something that I really want to support and which means I probably should talk More about being a social enterprise other than just blogging really angry things But we are really excited about growing the industry and doing things different and I think doing it with everyone again I joked about it earlier, but I think that it's a collaborative thing. It's not just something that we should be doing By ourselves so we're definitely we're playing with all the other platforms and doing it quite different from the platforms as well because Most of them are sort of focusing on this idea that they're building an angel pool or an investor pool of people that will be investing in multiple companies and While we have a user base that definitely would be interested. We're not promoting that as the most important thing We're saying actually it's your your your crowd because that's a Relationship you already have and therefore potentially easier to convert them into shareholders But also a stronger relationship when they are your shareholders cool and just ripping off that Thinking about some of the issues in New Zealand and indeed globally of some of the biggest social and environmental issues If you were to develop certain Criteria for proposals that were going on pledge me. Do you see that there is a future with match funding potentially from philanthropy? I see that that's a trend. There's some other platforms in New Zealand boosted for the arts And others but just wondering what your thoughts are on that Yeah, so we already do match funding and it was one of the most excited like one of the most exciting things for me was trying to get Government to match fund and we've managed to do that with Wellington City Council in Crater, New Zealand And that I thought was a great way to change the way they do Grant giving into actually matching the crowd instead of deciding who's in or out when they're when they're going through their Grants process So we definitely want to do more of it. I think the thing is it's so slow getting anyone on board to do that Do you have a certain criteria for that? Was it that was a one-off? So both of those were just conversations with them that turned into something one of them took over a year And we're actually chatting to another government department. That's still two years in the process But for us, it's really just making those relationships and just helping Campaigns through we don't actually decide what's good or not. We just let people try if they want to so Truba Hi, and I enjoyed that. I'm an angel investor a very active angel investor. Yay And and I always think of crowdfunding as the Kickstarter type things, you know with the producer product Yeah, I invested in those goggles in the VR Were you I could I could have been a Because I bought three of them But so obviously the equity crowdfunding is new and so that's new for New Zealand I know we've got some Australians who've registered in New Zealand because they can't do it in Australia Yeah, so But I have a question for you, you know in my experience, and I've only been an angel investing for about three or four years Yeah, I've done a lot, right? Most of them are gonna fail Fact life and as Phil McCall said it feels like philanthropy I've had several, you know several exits already most of failures So what happens when equity flat funding with the crowd? I mean when I usually get involved the friends families and fools have usually invested Are our equity crowdfunding people are gonna be the fools that they they think they're gonna invest in a project or your company They don't take the spread that we all do as angels invest in lots and hope that one of them comes through Are they going to be disillusioned pretty quickly when these companies start failing because what we always find is that it takes a lot more time takes a lot more money takes a lot more rounds and Without the governance in those companies and the control Doesn't reflect badly on wanted. This is a question. I just don't know Yeah, it would reflect badly back on you as a crowdfunding platform that's promoting failing companies That's just a question. Yeah, and it's a question that we've had quite a few times I think the thing is the whole idea behind the changes legislation is a lot of low-level investors So you're not asking lots of people to come in at a high level So hopefully losing two thousand dollars, which is the average investment isn't a hardship and hopefully not only I mean if you do lose it, you've already gotten the benefits of actually some rewards around it as well So at the end of the day, it is a punt, but it's a punch in something at a low level I do think that the relationship and the dynamic of that investment changes quite a bit when it's a lot of people that have Invested I mean some people say it's a lot harder to manage that we think what's technology it makes it easier But you do have all of these people that are out there as brand ambassadors selling you promoting you it's insane after our round I get at least Six emails a week of people being like I got told to come and talk to you about crowdfunding because XYZ investor saw me at a coffee or saw me at an event and so you know that actually is a very powerful thing that I think is often underestimated as the brand ambassador effect and also the marketing side of it like doing these campaigns are Naturally very public. So you're getting the word out there about your company that wouldn't potentially happen as much in an angel round And I think the skill set that these investors bring as well It's it's potentially not the types of skill sets that angels would bring but potentially it also is but it's a lot wider than that as Well, so you know we we had something where we Wanted some feedback on our education guide and we had one of our shareholders happens to be an education writer So she read it and she wrote back an email and gave us some really great feedback So it it does widen out the support Yet things are gonna fail things always fail But we hope that there's a bit of self-regulation with it as well because people are investing because they believe and know you It's not just a punt that you're taking on someone that you've seen two pitches from and done a bit of due diligence Great so final reflections before we hit the break, but I'm Trevor. Thank you so much for all of your investments into space It's really great. Mm-hmm more angels. I say Hey Nice presentation The only time I've seen or familiar with this platform in the US is teachers are writing these Just like donors choose and you go through hundreds of projects and decide how you want to put your 50 or 100 or $200 So I'm not familiar with how it works as is shareholders. So could you talk a little bit about how the payoffs work? When a company, but do they do dividends? Do they do that a couple times a year? So it's up to the company really so they they receive often ordinary voting shares in the company and then they outline in their offer Are they planning at some point to try and pay dividends or they can't promise it? But you know if that is the case then that is what they will do But it really is up to how the company goes if they succeed or not and and what happens down the track Yeah, no, that's great. So thank you very much. And I that was really wonderful. Thank you