Fund manager Gregory Marshall says Wynyard's demise was "above all" a matter of governance.

The failure of software firm Wynyard is "another tragic example of retail investors losing their money chasing dreams", says a fund manager who is pursuing a class action lawsuit against the company's directors.

NZX-listed Wynyard has been put into voluntary administration, confirming the worst fears of investors who had pumped $172 million into the business.

The company was one of seven technology firms that went public between 2013 and 2014 in the wake of the sharemarket success of cloud accounting company Xero, and is the only one to have failed.

As of the start of this year, Wynyard employed just under 300 staff.

READ MORE:

* Morgans back Wynyard Group

* The roller-coast ride of tech stocks

* Reserve Bank buys crime-fighting software from Wynyard

* A Broker's View: Wynyard Group

* Wynyard shares savaged

* Wynyard back of the class after halving revenue guidance

* Wynyard's inability to make money points to deep-seated problem

The company raised $172m from investors from its initial public offering and a series of subsequent capital-raisings.

Fund manager Gregory Marshall said investors would probably be out of pocket by $220 million to $230m once on-market purchases of its shares were factored in.

Marshall is spokesman for a group of disaffected shareholders who have appointed a partner from law firm Minter Ellison Rudd Watts to pursue a class action against Wynyard's directors.

They contend that Wynyard misled investors about revenue forecasts, the status of a $30m capital raising and other matters.

Wynyard was spun out of privately-owned Christchurch software firm Jade and sells database software that is customised for crime-fighting agencies and large commercial organisations that need to manage similar risks, such as fraud.

Though it has chalked up a raft of major clients including the Reserve Bank and Thailand's Customs department, it saw its share price savaged this year because of issues with a $27m contract with a "national security bureau" that forced it into a heavily-discounted rights issue to raise cash.

Marshall has never owned shares in Wynyard personally and said he did not believe it had a great product, but blamed poor governance for the firm's woes.

The company's failure would bolster the planned lawsuit, he said. "Any representation by the board and management that they were going to reach profitability and the business was in good shape have proved to be highly questionable."

The red flags included "over-promotional hype", such as a suggestion last year that the company would be able to raise money at a premium to its share price at the time, he said.

However, the former chief executive of NZX-listed telecommunications firm TeamTalk, David Ware, tweeted his sympathy for the firm saying listing the company had given it the best chance of success.

Wynyard said in a statement to the NZX that it regretted having to inform shareholders that it had been placed into voluntary administration.

The statement said directors had considered "all available options" including potentially raising additional capital and drawing on a $10m loan, but had concluded that "neither raising further equity nor incurring debt was in the best interests of the company, its shareholders or other stakeholders".

"The board believes this is the right decision under the circumstances, in order to ensure an environment where all options can be fully explored to retain the value in the business," the statement said.

Wynyard's failure is disappointing. But good on them for doing an IPO and giving the company the best chance of success. — David Ware (@David__Ware) October 24, 2016

KordaMentha partners Neale Jackson and Grant Graham have been appointed as administrators.

Graham said a first meeting of creditors would be held on November 4. "We are focused on identifying any strategies to realise value for the intellectual property Wynyard has built," he said.

Wynyard said it did not intend to make any further comment at this stage.

ROAD TO RUIN

July 2013: Wynyard raises $65m by listing on the NZX with new shares priced at $1.15, which implied a $115m market value for the business. Investors included Trade Me founder Sam Morgan. The company was spun out of privately-owned software firm Jade and had explained it wanted to raise capital to accelerate its international growth strategy and meet the growing demand for its software products.

June 2014: The company's shares hit a high of $3.30, valuing the company at $330m, after it raises another $35m from investors at a price of up to $2.70 a share, but it announces the following January that it missed its 2014 revenue target because of delays closing sales.

June 2015: Wynyard raises a further $42m from investors, with shares priced at $1.79 each. It said it would use the money to take on an additional 100 staff over the following year, including creating 30 new roles at its Christchurch research and development centre.

September 2015: The Reserve Bank says it will buy Wynyard's software to help it manage domestic and global risks. That is followed in January by a deal with Thailand's Public Anti-Corruption Commission and then Thai Customs. Police also selected Wynyard's software to support New Zealand's new Child Protection Offender Register.

February 2016: Wynyard shares slump 40 per cent to 80 cents after its net loss doubles to $44m and it announces a heavily discounted rights issue to raise an additional $30m in working capital. That offer replaced a plan to raise extra capital from "strategic investors" on better terms and marked the start of Wynyard's tail spin.

October 17, 2016: Wynyard suspends trading in its shares, which last traded at 21.5c, valuing the company at $38.5m. Board of directors puts the company into voluntary administration eight days later.