What is a ‘wholesale investor’?

Written by Snowball Effect · Published on Thu, 11 August 2016

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Who is a wholesale investor?

The term “wholesale investor” is defined in the Financial Markets Conduct Act 2013 (the Act). People sometimes refer to wholesale investors as "eligible investors" or "accredited investors". Please see the Act for original wording and more information.

If you meet the criteria for one or more of the categories below, you are considered to be a wholesale investor:

  1. You're an "eligible investor" because you have sufficient knowledge and experience dealing in financial products that enables you to assess the merits and risks of the transaction. Eligible investors are required to certify that they are an eligible investor by completing the Snowball Effect Eligible Investor Certificate NZ and having it certified by an independent lawyer, accountant, or financial advisor (unless you meet one of the other criteria below).
  2. Your net assets, combined with the assets of entities you control, exceeded $5 million for the 2 most recent financial years, or the total turnover of you and the entities you control exceeded $5 million for the 2 most recent financial years.
  3. You own, or at some time during the last 2 years have owned, a portfolio of "financial products" of a value of at least $1 million. Financial products include debt securities, equity securities, managed investment products, and derivatives.
  4. You have, during the last 2 years, carried out 1 or more transactions to acquire "financial products" where the amount payable under those transactions (in aggregate) is at least $1 million and the other parties to the transactions were not associated with you.
  5. Your principal business is investing in financial products.
  6. Your principal business is providing a financial adviser service in relation to financial products.
  7. Your principal business is providing a broking service in relation to financial products.
  8. You're in the business of trading in financial products on behalf of other people.
  9. Within the last 10 years you've been employed in an investment business and, for at least 2 years during that 10 year period, you participated in the investment decisions made by that investment business.
  10. You're a Qualifying Financial Entity or an authorised financial adviser in New Zealand.
  11. You're investing $750,000 or more into the company.

Why should I bother certifying that I'm a wholesale investor?

Some of the offers made through Snowball Effect's marketplace are hidden and restricted to “wholesale investors”. If you are eligible for wholesale status, you may certify that you are a wholesale investor in order to get access to a broader range of private investment deals. 

It’s important to note that wholesale investor offers that are only able to be made to wholesale investors may afford lower levels of investor protection than otherwise provided by licensed offers.

The wholesale investor criteria are described below. You can confirm your wholesale investor status online (you will be prompted to log in or register first if you're not already a member).

Companies seeking private investment

The team at Snowball Effect is on a mission to make capital raising simpler and more efficient. We support private companies in becoming investment ready, then provide a range of capital raising options for them. While we are known for providing companies with a channel to access investment from the public, we have had increasing demand from companies who want to raise funds privately. These companies are often growth companies seeking a lead investor, a handful of investors to complete an existing round, or experienced business people who are able to invest as well as become actively involved in the business.

For regulatory reasons, in New Zealand these types of offers are generally only made to "wholesale investors". Facilitating wholesale investor offers enables us to support a broader range of Kiwi businesses and bring a wider variety of offers to investors.

If you're interested in becoming certified as an eligible investor, taking a lead investor role, or becoming actively involved in private companies, or are a company seeking private capital raising support or advice, please please email the team at [email protected] or call 0800 SNOWBALL (766 922).