After a long wait the Australian Securities and Investments Commission (ASIC) has licensed the first Crowd Sourced Funding Intermediaries under the new Crowd Sourced Funding regime.
Seven companies have been issued with Australian Financial Services licence authorisations to act as intermediaries able to provide a Crowd Sourced Funding service.
With the grant of these new authorisations, eligible companies will be able to utilise the CSF regime to raise capital by making offers of ordinary shares to investors via the online platform of one of the intermediaries. Essentially, eligible companies are those that have converted from a private company to a public company, or private companies prepared to convert to an unlisted public company.
The initial group of intermediaries appointed by ASIC are:
- Big Start
- Birchal Financial Services
- Global Funding Partners
- IQX Investment Services
- On – Market Bookbuilds
ASIC Commissioner John Price commented, “Intermediaries have an important gatekeeper role which will be key to building and maintaining investor trust in crowd-sourced fundraising, so we are pleased to have now issued the first tranche of authorisations”.
This whole process has taken a long time but finally the ‘start button’ has been pushed!
A large number of small/medium enterprises are expected to take the opportunity to try to raise capital. Some of these prospective companies, interested in raising capital, could be your own clients or businesses operating in your location.
If you have not already done so this announcement removes the last obstacle for SMEs to be able to raise capital in Australia and gives accountants/advisers a great opportunity to start communicating with clients and prospects in their areas by presenting a seminar/webinar on crowd-sourced funding.
Any business wishing to raise capital needs to have gone through an extensive preparation phase before having discussions with a Crowd-Sourced Funding Intermediary.
Companies which wish to avail themselves of the opportunity to raise up to $5 million (but it could be as low as $50,000) in capital from the public every 12 months need to undertake significant preparation including:
- preparation of a market research document
- preparation of a marketing plan
- identification of the intellectual property of the business
- preparation of a corporate chart
- identification of the company directors and their CVs
- preparation of a business plan
- preparation of a budget and cash flow forecast for at least the next 3 years
Many companies will require mentoring on corporate governance and procedures relative to the operation of regular Board of Directors’ meetings.
These documents will culminate in the preparation of the Crowd Sourced Funding Offer Document (basically the equivalent of a prospectus).
All of these activities will contribute to creating a ‘new income stream’ for accountants/advisers who are prepared to offer these business services to clients.
Crowd sourced funding is a new product stream for Australia!
No other accountancy business has an historical claim to this market because it has not existed here previously.
This is your opportunity to be involved in a significant new market that many commentators believe will grow very significantly over the next few years.
HOW TO START
If you would like to obtain additional information on crowd sourced funding and the Crowd-Sourced Funding Product Package that is available from ESS BIZTOOLS please (click here).
Peter Towers | Managing Director | ESS BIZTOOLS