In their “Digital Disruption/Short Fuse Big Bang” 2012 report Deloitte suggested that accountants/advisers should be “creating new income streams” to combat difficulties relating to “Digital Disruption”.
Whilst Crowd-Sourced Funding is not a “Digital Disruption”, nevertheless, it definitely has the prospect of “creating new income streams” for accountants and advisers who react to the market opportunities.
Crowd-Sourced Funding goes live on 29 September 2017. This is the date that companies will be able to place their Crowd-Sourced Funding Offer Documents onto an Intermediary’s platform (website) after the Intermediary has conducted a gatekeeper’s due diligence review of the information contained within the Crowd-Sourced Funding Offer Document.
The opportunity to raise up to $5 million every twelve months is available to proprietary limited companies which convert to an unlisted public company. The directors of many companies will welcome this opportunity to be able to raise capital in this way.
Directors of companies interested in capital raising can also utilise a section 708 Capital Raising in conjunction with Crowd-Sourced Funding subject to no more than $5 million in total being raised in a twelve month period unless the investors are sophisticated investors.
Utilising a section 708 Capital Raising could be important if the company needs to raise some capital (perhaps to pay for expenses of the preparation of the required documents) prior to 29 September 2017.
Companies that are eligible to raise capital as Crowd-Sourced Funding Companies do not have to be any specific type of company nor do they have to be involved in the development of new technology, products or processes. Eligible companies could literally be the “corner store”.
This means that virtually any type of business could attempt to raise capital. Obviously they will need to be incorporated as a company but if they are prepared to convert from a private company to an unlisted public company they are eligible to participate in this market from 29 September 2017.
This means that any of your clients could be interested in trying to raise capital as a Crowd-Sourced Funding Company. It could prove embarrassingly and costly for accountants/advisers who assume the particular clients would not be interested in trying to raise capital in this manner.
Our recommendation is that you “test the water” by undertaking some preliminary marketing:
- emailing an article outlining how Crowd-Sourced Funding Companies operate to your clients and prospects;
- placing an article on Crowd-Sourced Funding onto your website;
- issuing a news release to your local media on Crowd-Sourced Funding;
- presenting a seminar/webinar to your clients and prospects on Crowd-Sourced Funding.
ESS BIZTOOLS has developed a full package to assist you with these marketing activities and also to guide you through the consultation process with your clients to determine whether they are potentially a Crowd-Sourced Funding Company and then to assist in explaining the overall process that is necessary to be able to produce a Crowd-Sourced Funding Offer Document.
We invite you to sign up for Crowd-Sourced Funding Equity Raising Package now $399 (including GST). Click Here to sign up.
Click here if you would like to talk to an ESS BASIP representative
For details of any other aspect of ESS BIZTOOLS, ESS BASIP, ESS BIZGRANTS please contact Peter Towers, Managing Director of ESS BIZTOOLS, ESS BASIP, ESS BIZGRANTS on peter@essbiztools.com.au.
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