While working as the Head of Conduct at the Financial Markets Authority (FMA), Catalist’s founder, Colin Magee, heard a lot of different views about why New Zealand’s capital markets weren’t working as well as they should. Catalist aims to help resolve some of these issues.
Although start-up businesses have good funding sources, such as from bank loans or angel investors, established businesses find it difficult to raise capital between $2 million and $10 million. Many look to expand overseas, particularly in Australia and the US, meaning New Zealand loses the economic benefits of their growth, as well as the potential for jobs. Catalist aims to connect investors with growing New Zealand businesses in order to help close this funding gap.
Access to investments
Investors are keen to invest in established private businesses and projects that have a positive impact on New Zealanders. However, it is difficult to find these investment opportunities and costly to pursue them. A stock market designed for small and medium-sized businesses and projects, such as Catalist, can be an effective venue for matching investors with suitable investments.
Most current options for investing in private businesses have very few protections for investors. As a licensed and regulated stock exchange, Catalist will provide investors with protections from market manipulation and insider trading, while lessening the regulatory burden for businesses compared to a traditional stock exchange. This makes the market more attractive to both investors and businesses, allowing them to connect and grow together.