Equity crowd funding, latest step in much-hyped social capital, carries risks, high failure rate

Wed, 23 Apr 2014

By Suze Metherell April 23 (BusinessDesk) – Equity crowd funding, which became legal in New Zealand this month, comes with a high risk of failure based on figures showing existing forays into social capital have a success rate of less than 50 percent, one new entrant says. The Financial Markets Conduct Act, which came into effect on April 1, allows businesses to crowd fund by offering equity of up to $2 million without the burden and costs associated with a prospectus, effectively giving investors skin in the game rather than getting a ‘rewa...

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