Former public company director, Andrew Geddes, is hopeful the recent $3-million capital-raise by the women’s ride-sharing company, Shebah, will encourage more female-owned companies to begin using Crowd Sourced Funding Equity Raising for their growth capital.
Mr Geddes, the former Chair of Greencross Limited, believes Crowd Sourced Funding is likely to become the preferred way for the small and medium-sized business sector to raise capital in the near future.
He claims the traditional alternatives of bank loans and angel investors often place stringent obligations on the company, its directors and loan guarantors that limit the potential for growth.
Mr Geddes says Crowd Sourced Funding lets small private companies raise equity capital in much the same way as an IPO, but with far less cost and without the ongoing scrutiny of institutional investors in the public arena.
He says he’s seen many small companies launch public offerings long before they were ready, simply because they saw no alternative for raising the capital they needed to grow.
“Since Crowd Sourced Funding was legalised here in Australia just seven months ago, we’ve seen 36 companies raise $28.9-million” Mr Geddes said. “That’s pretty impressive for a process that is still in its infancy and Shebah has proven to be one of the star performers”.
According to Mr Geddes, the rapid funding success of Shebah recognises that women have specific needs, such as secure transport, and he believes more accountancy firms should be embracing businesses, that are controlled by women, that target women and that clearly have the potential for growth.
However, Mr Geddes claims most Australian accountants currently have very little knowledge of Crowd Sourced Funding and are not equipped to advise their clients on this new source of capital.
“Accountants need to get up to speed quickly on this new capital-raising process if they’re going to give their clients accurate advice on whether or not to use Crowd Sourced Funding to grow their businesses” he said.
“There are a number of educational resources publicly available, including the website of the accountancy information-provider, ESS BIZTOOLS” said Mr Geddes.
That website is www.essbiztools.com.au
Mr Geddes said “the success of the Shebah capital-raise illustrates that the growth potential of companies targeted specifically at the needs of women, especially those that are also operated by women, have been previously under-estimated by both investors and business in general”.
“Now with Crowd Sourced Funding, many of those female-owned businesses can raise up to $5-million each year and still keep the ownership in private hands” he said.
Contact: Andrew Geddes
Telephone: 0407 497 725
Authorised by Andrew Geddes for Peter Towers to release.
Peter Towers | ESS BIZTOOLS