You will be required to keep the entire investment in New Zealand during the three-year investment period. However, you can switch between acceptable investments within New Zealand during this period. So if the business you intend to start meets the requirements of an acceptable investment (equity in New Zealand firms), you would still meet the requirements of the visa category.
How can I withdraw money before the end of the three-year term required with the NZ Investor 1 application?
My investment funds represent my life savings and retirement plan. I will be investing in a secure option, so I am not worried about the security of my investment, just the contingency of possibly needing these funds at some point in the three years they are required to be invested. I may try to start a business once I get settled in New Zealand. How can I use these funds and avoid taking out a loan?
Depending on how you invested your funds, there should be an exist policy in the contract. However, once you withdraw your fund within three years of the investment period, you will breach the visa condition. Failure to comply with the conditions may result in the visa holder becoming liable for deportation under section 159 of the Immigration Act 2009. You can start a business within the three years' time, though you will need to source funds from elsewhere. Taking out a commercial loan may not be a bad idea to claim interest as business expense for some tax benefit.