Australia has the world’s most comprehensive experience in broad-scale crowd sourced equity funding, with businesses successfully raising almost $150mil to date.
In the past year, Australian media have taken like a moth to the flame in covering the phenomenal success of crowd sourced equity funding, triggered by President Obama signing off the JOBS Act in the U.S to set the wheels in motion for crowd sourced equity funding to be permissible by law over there.
With this strategy du jour in place, the USA would receive an injection of $300bil in year one, with the whole sector then ramping up rapidly, but little is it known that Australia has spent the last ten years building solid foundations to pave the way in the start-up scene.
The Australian Small Scale Offerings Board (or ASSOB) has been running their crowd sourced equity platform for almost 10 years, and has helped businesses successfully raise almost $150mil in that time.
With the experience in the field, ASSOB is now being called on by organisations and governments around the world who seek to open up their legislation to permit crowd sourced equity funding to become a source of capital for start-ups and small business.
In addition, and a smart start-up themselves, Capital Exchange Australia educates and supports said start-ups and small businesses in embracing this opportunity and gaining maximum benefit.
ASSOB’s “sweet spot” for capital raising sits between $500k and $2.2mil; raises below this amount are not cost effective for the issuer (the person raising the capital) as the cost of having someone guide the issuer through the process becomes a disproportionately large percentage of the funds to be raised.
“This is where the opportunity came about for Capital Exchange Australia to launch their Lite Raise product,” said Bryan Vadas, Founder of Capital Exchange Australia.
“Lite Raise matches those seeking to raise up to $100,000 in equity capital with investors desirous of investing in high growth opportunities.”
“They provide an online, DIY portal with workbooks for planning a capital raise, guides as to how to do all things necessary to structure, market and manage a raise, all the legal framework for the raising of capital, and the tools and templates to build a complete and professional offer.”
“The platform was built in response to issuers requiring a cost effective way of raising $20k to $100k in early stage seed capital, as well as investors who wanted quality deal flow articulated well and presented in a format that they could quickly and easily digest.”
Whilst the government works on finessing the broader legislation around crowd sourced equity funding, Capital Exchange Australia has launched, operating its platform and compliance tools pursuant to the prescriptive requirements of ASIC Class Order 02/273 (Business Introduction or Matching Services) and section 708 of the Corporations Act (Cth) 2001.
With ASSOB laying the solid foundations and Capital Exchange Australia proving a sound supporting structure, Australian start ups and small businesses now have the tools available to continue to build their empire.
A smart start-up assisting all start ups across Australia, with a whole new manner of capital raising.