bizAngels

bizAngels Investment Scheme

Background

The bizAngels Scheme functions under the Securities Act (Venture Capital Schemes Exemption Notice 2008 (see legal section). This exemption allows businesses who register with the Scheme Administrator, using defined protocols, to be presented to registered investors without having to complete the onerous task of developing a full prospectus and registering this with the Companies Office, as is required by the Securities Act when a business issues shares to the public.

This exemption process is only available for capital investments of under NZ$5,000,000.00 (five million New Zealand dollars). Other conditions may apply, depending on the total investment and funding in a business.

Small and Medium Sized Businesses Seeking Investment

Small and medium sized businesses come in a variety of forms. They may be new emergent businesses or existing businesses seeking to grow to the next stage. All seek potential pathways for growth through the injection of capital, skills and/or alliances. All must be prepared to value their businesses realistically and give up substantial parcels of shareholdings to direct investors.

Angel Investors

An angel investor is a name used for investors who invest capital directly into small and medium sized businesses, but contrary to common belief, they are not philanthropists.

There are numerous types of angel investors with varied motivation for investing in small and medium sized businesses. All seek significant and viable returns from the businesses they invest in.

The majority of angel investors do not participate as passive investors, as when investing in the stock exchange or group schemes. Angel investors tend to have high business acumen and contribute additional intangible value over and above capital through direct involvement in a business as shareholders, directors or team members of the business operations.

Administration

Under the Securities Act Exemption the manager of the processes is called the Scheme Administrator. Enterprising Manukau is a Scheme Administrator. The Administrator and any others who work directly with the Administrator on scheme processes and services must not express any view, positive or negative, to anyone on the validity of the business proposals. They must be commercially neutral at all times.

Because a company is registered and listed by the Scheme, it does not imply endorsement of the business or the offer. It only states that the business has gone through the processes required by the Securities Act Exemption Notice and the Code of Practice.

The administrator does not participate in any negotiations or due diligence.

The Administrator has the right to refuse any business onto the Scheme if they believe the process has not been completed under the requirements of the Exemption Notice.

For more information, phone 09 2622244 or email bizangels@em.org.nz

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