Frequently asked questions

General

• Who can invest in offers on Snowball Effect?

  Investors who meet specific professional or sophisticated criteria as under Section 708 of the Corporations Act. You can find out more about these criteria here.

• What is Snowball Effect?

  Snowball Effect is New Zealand’s leading private equity marketplace. We launched in New Zealand in late 2014, and since then have raised over NZ$53m of equity for a wide variety of companies. 

  We don't provide financial or investment advice. We provide vetted deal flow so you can discover and invest in interesting New Zealand growth companies that match the stage, industry or sector that you’re interested in investing into. You do your own due diligence, and make your own investment decisions. You may choose to follow investors who have already committed to the round. 

  Snowball Effect provides companies with a range of capital raising options, from private placement with family offices or high net worth investors, through to facilitation of a raise that is also open to members of the public.

• Is Snowball Effect licensed and regulated by the Australian Securities and Investments Commission (ASIC)?

  No. Snowball Effect does not need to be licenced by ASIC because it is providing an introduction service between companies and verified sophisticated or professional investors. 

  In New Zealand, Snowball Effect was one of the first two providers to be granted a licence by the Financial Markets Authority in July 2014. This licence allows us to make offers to retail investors providing the conditions of our licence are met.

• Why have you set up in Australia?

  You can read more about why we’ve set up in Australia, and the increasing role Australian funding is playing in the New Zealand capital markets.

• How do I change my email address?

  To change your Snowball Effect account email address, visit your visit your dashboard once logged in. Upon updating your email, you will be sent a confirmation email. Your email address will not be updated unless you confirm your new address.

• How do I change my rewards address?

  If your address has changed, you can change your rewards address by visiting your investor dashboard. Each entity can be assigned a unique rewards address.

• How do I close my Snowball Effect account?

  To close your account, visit your investor dashboard. Once closed, you will no longer be able to access your account, and we will no longer distribute communications to you.

Investors

• What is the Snowball Effect investment process?

  Snowball Effect's investment process is as follows:

  • Registration: Registration on our website is the first step and can be completed here
  • Browse offers: Browse both previous and current offers on the site.
  • Select investment: If you see an offer that appeals and you understand the investment, simply click ‘invest now’ and complete the required information. Once you have provided information to verify your identity, we will then debit the funds from your account and hold these in trust until the close of the offer.
  • Offer closes. When an offer closes, we will notify investors of whether or not the offer has reached its minimum target. Companies that reach their funding target receive the funds and shares are issued to investors. If a company does not reach its minimum target, all funds held in trust are returned in full (without interest) to investors.
  • Post-offer. As a shareholder you can expect ongoing communications from the companies you invest in – they have statutory obligations, but also have an incentive to keep you engaged as part of their “crowd”. Snowball Effect does not manage these communications, but we offer assistance to companies to facilitate and encourage ongoing flows of information to investors.

• What protections are there from the risks of investing?

  Snowball Effect is a marketplace. Investors using our marketplace are responsible for assessing the risks of investing in each offer.

  In addition to the assessment which each investor undertakes themselves, a number of other processes are in place to mitigate risk:

  • Snowball Effect facilitates investors obtaining clear and concise information to assist them to decide whether to purchase shares. Investors can also ask companies to clarify or provide additional information.
  • Snowball Effect uses secure payment systems. Your money is held in trust from the moment we receive it until it is transferred to the company upon the completion of an offer.
  • Investors have protections through company law and securities law in New Zealand. Investors may also have additional and enhanced protections through a shareholder agreement relating to each company they invest in. This agreement is provided as part of the full information suite prior to being able to transact.
  • Snowball Effect reduces the risk of fraud through checking, against publicly available information, the identity of the company and information provided by the company relating to the identity and character of its directors and senior managers.
  • Snowball Effect excludes any company from our services if we are not satisfied as to the identity of the company or of the company’s directors and senior managers, if we have reason to believe that any of the company’s directors or senior managers are not of good character, or if we have reason to believe that the company is not likely to comply with the obligations imposed on it under the service Snowball Effect provides.
    
  • Snowball Effect will exclude any company from our services that engages in conduct that is misleading or deceptive, or likely to mislead or deceive.

  While risk can never be eliminated, Snowball Effect aims to be the best in the market at outlining risks to investors and helping to reduce risk where possible.

• What are the fees for investors?

  Investing through Snowball Effect is free of charge.

  Snowball Effect retains any interest that is earned on investor funds for the period that they are held in Snowball Effect's trust account during an offer period. This interest is retained as an administration fee.

• What due diligence does Snowball Effect do?

  Snowball Effect is a marketplace. We don't provide financial advice or investment advice. We provide vetted deal flow so you can discover and invest in a range of interesting growth companies.

  Snowball Effect does not carry out "due diligence" as that term is normally used.

  Please see the Disclosure Statement for a description of the checks that Snowball Effect carries out on each company.