AngelEquity investors include:

• Angel investors looking to diversify their portfolio
• Eligible Investors and HNWIs (High-Net-Worth-Individuals) such as lawyers, accountants and other professionals who want access to a range of fully qualified early stage investments.
• Investors with experience investing in startups, who are currently deeply involved in those companies and want to grow their startup portfolio without further time commitment.
• Entrepreneurs who have grown their own startups and now have funds to invest, but limited time to dedicate to reviewing these opportunities.

These investors understand the importance of early stage companies being fully qualified for investment, receiving the sufficient expertise to ensure they can grow to their full potential and appreciate the value add that is provided to companies who have been working with an Angel group and have obtained backing from experienced early stage investors.

AngelEquity provides information on early stage companies to registered Investors for their consideration to invest.

Offers listed on AngelEquity have already been through the investment process with a New Zealand Angel Group and have significant angel investment confirmed.

Registered investors are invited to invest alongside experienced Angel Group members, who have negotiated a fair valuation, and undertaken Due Diligence, aligning the interests of Angels who back deals with AngelEquity investors.

When you certify as a Wholesale Investor, the usual rules do not apply to offers of financial products made to you. As a result, you may not receive a complete and balanced set of information. You will also have fewer other legal protections for these investments.  Make sure you understand these consequences. 

Ask questions, read all documents carefully, and seek independent financial advice before committing yourself.

In order to maintain the integrity of AngelEquity, we need to ensure that all investors who register are verified as credible and qualify as a Wholesale Investor under the FMCA 2013.  Investors on AngelEquity are either members of an affiliated New Zealand Angel Group, or will need to provide the name and email address of a New Zealand professional (authorised financial adviser, a qualified statutory accountant, or a lawyer) who can verify that you qualify as a Wholesale Investor.

Making an investment requires you to:

• Register on AngelEquity
• Review of all information including settlement documents
• Commit an investment amount
• Follow the settlement process

Completing your investment requires:

• Signing an Investor Deed with the relevant Nominee
• Providing a Wholesale Investor Certificate
• Agreeing to become a party to the Shareholders Agreement or other relevant settlement documentation
• Paying your investment funds and any applicable fees

All investments via AngelEquity are made through a Nominee.

The Nominee groups together all investments from Wholesale Investors to allow for smaller investment parcel sizes, simplify the Share Register and minimise the administrative overhead for investors and investee companies by streamlining the communication between the investors and the company.

The Nominee is the legal owner of the shares as a bare trustee; however the investor remains the beneficial owner and retains full economic rights.

Key points about the Nominee:

• Investor Deed – You will need to sign an EA Nominee Ltd Investor Deed to invest through our Nominee
• Confirmation of investment – The Nominee will appear on the Companies Office Share Register however you will still receive email confirmation from the Nominee of your investment for your records.
• Company Updates – The Nominee will circulate company updates
• Administration – The Nominee will administer your investment in the case of dividend payments or other liquidity events.
• Voting – You vote through the Nominee by email. The Nominee will sign any resolutions on your behalf as instructed by you. You may also attend and vote directly at Annual General Meetings.
• Reporting – The Nominee will provide 6 monthly reporting of all your investments
• Non EA Members pay a 2% administration fee on all investments and exits to cover the cost of these services
• EA Members pay an annual membership fee which covers these costs

When you join AngelEquity you will have to certify that you are a Wholesale Investor.

The term Wholesale Investor is defined in Schedule 1 of the Financial Markets Conduct Act 2013 “the Act”. We encourage you to review the Act here if you require further information.

To understand how to get certified as a Wholesale Investor refer to the next question below.

Most wholesale investors will qualify under the “Eligible” Investor criteria below, and will need to be certified as such by a New Zealand authorised financial adviser, a qualified statutory accountant, or a lawyer.  To be an eligible person, you must have acquired and disposed of financial products in the past and have gained experience for such activities such that allows you to assess the merits of a transaction (including value and risk), your own information needs in respect of a transaction, and the adequacy of the information provided about a transaction.

This certificate must clearly state how you, the investor, consider you qualify as an eligible investor, and must be certified as such by a New Zealand authorised financial adviser, a qualified statutory accountant, or a lawyer.

To be an eligible person, you must have acquired and disposed of financial products in the past and have gained experience for such activities such that allows you to assess the merits of a transaction (including value and risk), your own information needs in respect of a transaction, and the adequacy of the information provided about a transaction. Our Eligible Investor Certificate can be downloaded from here.

If you are able to tick at least one of these criteria, you will qualify as an Eligible Investor and will need to supply an Eligible Investor Certificate from here.

□ I have experience in acquiring or disposing of financial products.

□ I have served as a Director of an early stage business that was involved in capital raising.

□ I have experience in investing in shares and other securities (listed and unlisted) and understand the risk with investing in different types of financial products. I recognise that investment in angel investment is generally of a significantly higher risk profile than most listed investment opportunities.

□ I currently hold a diverse portfolio of investments which I regularly review, with the benefit of advice from relevant professionals where appropriate, and make my own investment decisions in relation to my portfolio.

□ In the course of acquiring or disposing of financial products, I have been exposed to a wide range of investment analysis and commentary and this has helped me build knowledge and skills in assessing the value and risks of investing in financial products.

□ other relevant experience of acquiring or disposing of financial products

□ None of the above

An Eligible Investor Certificate must be provided to AngelEquity prior to your first investment. If your circumstances do not change, your Eligible Investor Certificate will be valid for a period of two years.

Each investee company is required to ensure that your certificate is not signed by anyone associated with them.  If this is the case, you may be required to provide a certificate certified by someone not associated with the investee company.

The penalty for providing an Eligible Investor Certificate if you do not quality as a Wholesale Investor is currently $50,000.

Eligible Investor Certificate can be downloaded from here.

If you qualify under any other Wholesale Investor criteria, as listed on the next page, you are able to self-certify without the involvement of an authorised financial adviser, a qualified statutory accountant or a lawyer.

If you are able to tick at least one of these criteria, you will be able to self-certify as a Wholesale Investor and will need to supply a Safe Harbour Certificate from here.

□ I own net assets which combined with the assets of entities I control, exceeded NZ$5 million for the 2 most recent financial years.

□ The total turnover of my own and the entities I control exceeded NZ$5 million for the 2 most recent financial years.

□ I have owned at some time during the last 2 years, a portfolio of financial products of a value of at least NZ$1 million.

□ I have carried out 1 or more transactions to acquire financial products during the last 2 years, where the amount payable under those transactions (in aggregate) is at least NZ$1 million and the other parties to the transactions were not associated with me.

□ My principal business is investing in financial products.

□ My principal business is providing a financial advice in relation to financial products.

□ My principal business is broking financial products.

□ My principal business is trading in financial products on behalf of other people.

□ I have been employed in an investment business within the last 10 years and, for at least 2 years during that 10 year period, I participated in the investment decisions made by that business.

□ I am a Qualifying Financial Entity (QFE).

□ I am an authorised financial adviser in New Zealand.

□ None of these apply to me.

There is no requirement for a Safe Harbour Certificate to be certified by an independent party, however the penalty for providing a Safe Harbour Certificate if you do not quality as a Wholesale Investor is currently $50,000.

Safe Harbour Certificate can be downloaded from here.

Please note that it is an offence to give a certificate knowing that it is false or misleading in a material particular. The offence has a penalty of a fine not exceeding $50,000.

The law normally requires people who offer financial products to give information to investors before they invest. This information is designed to help investors make an informed decision.

By giving a Wholesale Investor Certificate as a requirement of joining AngelEquity, you acknowledge that, the usual rules do not apply to offers of financial products (including debt securities, equity securities and derivatives) made to you. As a result, you may not receive a complete and balanced set of information. You will also have fewer other legal protections for these investments.

Please refer to our full Risk Warning here.

Make sure you understand these consequences. Ask questions, read all documents carefully, and seek independent financial advice before committing yourself.

Being an Angel Member enables you to be involved in shaping the future of the companies you are investing in.  The more tangible benefits of Angel Membership include:

• Priority access to deals
• Member Induction and workshops
• Member Meetings where you can network with like-minded members
• Participation in Due Diligence
• Follow-up meetings where you can discuss the deal more fully with the Entrepreneur
• Opportunities to vet and screen deals, mentor new members and become an Investor Director

AngelEquity facilitates wholesale investment in angel backed deals increasing the amount of capital available for initial, and follow on rounds.  We actively market the benefits of angel group membership and encourage wholesale investors to join the angel community.

More active Business Angels nationwide means more resources to screen and DD prospective deals. More funds will attract a larger deal flow increasing our opportunity to pick better deals.

Also, crucially, fees will stay within the angel community to ensure the work we do continues; funding companies with valuations appropriate to their stage in the capital lifecycle; conducting thorough due-diligence; and ensuring lead investors from our community are engaged with the domain experience, expertise and ability to assist a company to grow, be acquired and exit.

AngelEquity raises funds for companies operating in most industries – New Zealand Angel Investment by Sector 2006 – 2014.

Source: Young Company Finance

Registered investors will have the same rights as all other Angel investors.  Angel investors will negotiate the inclusion of investor protection clauses in the Shareholders Agreement. These protections include anti-dilution and pre-emptive rights.

Pre-emptive rights ensure you are offered the right to invest in subsequent rounds before new investors to ensure you have the option of maintaining your relative shareholding. Your holding will only be diluted if you choose not to invest in further rounds.

The rights will vary with each investment, please check the relevant Shareholders Agreement.

Companies may take between three and seven years to provide any returns to shareholders, but this can vary greatly.  We have seen returns as soon as 20 months and at the longer end of the scale, there are companies that still have not provided any return to investors after eight years.

There is a risk that you might lose all the money you invest.

The minimum investment on AngelEquity is generally $5,000, although some offers may differ.

The only capital at risk is the capital you invest, but never more than what you invest.

If you have some time to dedicate to investing in the early stage market and want use your business expertise to evaluate deals and perhaps even work with a growing company, you should consider joining an Angel Group.

If you have equity in a company, you own a part of that company.  Equity capital raising essentially refers to the sale of an ownership interest to raise funds for business purposes.  Most investment opportunities on the AngelEquity are offers of equity.

A convertible note (CN) is short-term debt that converts into equity.  In the context of Angel investing, the CN typically converts into preferred shares at the next capital raising round.  The company valuation of the CN round is typically set at a discount to the valuation of the company at the next capital raising round.

As an Entrepreneur, AngelEquity means access to a larger pool of investors for your next capital raise, and a streamlined process which will save time.

AngelEquity offfers new angel, and wholesale investors (not the general public) a value proposition which sets the platform apart from current crowdfunding sites.

AngelEquity exclusively hosts angel backed deals with appropriate valuations, thorough due-diligence and engaged lead investors who have the domain experience, expertise and ability to assist companies like yours to grow, and exit.

1. Pitch to Angels – You will need to gain the support of angel investors, or other professional investors, in order to list on AngelEquity.   If you do’t yet have angels on board, contact your local angel network and they’ll tell you what you’ll need and who to contact.
2. Agree terms and investment – angels will, following due diligence, agree a term sheet, valuation and investment amount with you.
3. Talk to us about completing your funding round – Your deal can be listed as soon as you have a minimum of 25% of the round target invested by Business Angels or other professional investors and a positive DD Report, subject to our review – refer our Conditions Agreement here.
4. Registered investors on AngelEquity invest – when your investment proposal is approved, AngelEquity investors will be able to invest in your company. You can (and should!) then engage with potential investors by providing regular updates and good news stories, to generate publicity for your raise. We will provide you regular updates on investments made into your business.
5. Completing your funding round – when your company reaches 100% of its target (or its overfunding target), and all the legal documentation is completed, the money is transferred into your company’s bank account.

Enterprise Angels (EA) will charge a 2% administration fee to non EA Member wholesale investors on any investments made, and when investments are liquidated (in any company who is not paying a shareholder management fee on behalf of their investors).  This will cover costs incurred in providing  on-going services – to put this into perspective, when your $10K investment gets a 10x exit and turns into $100K, $2K will be retained by EA for administration fees.

Enterprise Angels (EA) members pay an annual fee which covers this cost – if you are interested in joining, please contact us here.

Companies pay a transaction fee of 6% of capital raised.