The Crowd Sourced Funding Equity Raising Scorecard produced by ESS BIZTOOLS as at 31 July 2019 has identified that 31,141 investors have invested an average of $1,207 in the 44 companies that have raised a total of $37,586,246.
The Crowd Sourced Funding Equity Raising Scorecard produced by ESS BIZTOOLS indicates:
For the detailed analysis of the individual intermediaries scorecard please click here.
This uptake indicates that after a slow start Crowd Sourced Funding Equity Raising is starting to raise much-needed capital for small businesses and medium sized enterprises operating in locations all over Australia.
In the aftermath of the Banking Royal Commission, Crowd Sourced Funding Equity Raising is emerging as a significant source of finance for small businesses and medium sized enterprises.
Mr Robin Holt, Senior Campaign Manager of Melbourne based Crowd Sourced Funding Intermediary – Birchall Financial Services has indicated that he was in the United Kingdom when the equivalent of Crowd Sourced Funding Equity Raising commenced and has stated that it took two years for the market to take off to the significant level of investment that is now evident in the UK.
To raise capital as a Crowd Sourced Funding Equity Raising Company the company has to “get its house in order” relative to the preparation of:
- Business Plan;
- Budgets and Cash Flow Forecasts;
- Company valuation;
- Share price determination;
- Customer analysis;
- Identification of the company’s vision;
- Identification of the company’s leadership team; and
- Other documentation that will be necessary to enable the preparation of the Crowd Sourced Funding Offer Document.
The directors will also need to understand how Crowd Sourced Funding Equity Raising operates and have a clear understanding of the duties, responsibilities and powers of the Crowd Sourced Funding Intermediaries.
Very few companies will be able to undertake this work without input from an accountant/business advisor.
The Crowd Sourced Funding Equity Raising Scorecard indicates that six of the ASIC appointed Intermediaries have yet to assist any companies to raise capital whilst four other Intermediaries have raised relatively small amounts when compared to the market leaders.
This highlights that the Crowd Sourced Funding Intermediaries are seeking more “quality deal flow” to present to their potential investors.
Unfortunately, a large number of small business operators and directors of medium sized enterprises do not have an awareness of how Crowd Sourced Funding Equity Raising operates – yet many of these entities could probably be presented as “Quality Companies” seeking to raise capital if they received appropriate professional advice.
As the “Trusted Advisors” to small businesses and medium sized enterprises accountants/business advisors are in a unique position to be able to discuss the benefits of Crowd Sourced Funding Equity Raising and the processes to business operators, to give them an informed overview of how Crowd Sourced Funding Equity Raising may be able to assist them in financing their business operations.
Another significant benefit is that Crowd Sourced Funding Equity Raising is available to “Mum and Dad” investors (retail investors) who for the first time now have the opportunity to invest in new technology companies and small companies, these investments were only previously available to sophisticated and wholesale investors.
In the Australian Securities Investment Commission’s report up to 30 June 2018 on Crowd Sourced Funding Intermediaries it was indicated that 99.4% of the investors were retail investors and that 77.5% of the share capital was contributed by retail investors.
If these percentages are consistent to 31 July 2019 it would indicate that 30,954 of the investors to date would be retail investors and that $29,129,340 would have been invested by retail investors – an indication that the “crowd” is very interested in this new investment market opportunity.
ESS BIZTOOLS has produced a unique “Crowd Sourced Funding Equity Raising Product Package” to assist accountants/business advisors to offer professional advice to clients to assist them on this capital raising journey which will be a novel experience for most of them.
You are invited to visit www.essbiztools.com.au/crowd sourced funding/learn more to gain an insight into the type of support services that are available to assist you to get experience in this new market opportunity for small businesses and medium sized enterprises to raise capital thus avoiding attempting to borrow money and at the same time developing new income streams for accountancy/business advisory businesses.
If you have any questions on any aspect of Crowd Sourced Funding Equity Raising or any of the other 23 product packages that ESS BIZTOOLS has produced to assist accountants/business advisors to deliver a broad range of value adding “Business Improvement Services” for your clients/prospects please do not hesitate to contact us.
Whilst visiting our website please view our “40% discount promotion” for the month of August 2019.
Peter Towers | Managing Director | ESS BIZTOOLS
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