Alternative assets crowdfunding platform VentureCrowd recently announced the first ever crowdfunding exit of a startup in Australia through an equity crowdfunding platform with the listing of transfer comparison site Jayride.com.
Touted as “the next Australian unicorn”, Jayride was an early stage startup on the VentureCrowd platform, where investors participated in a limited-time opportunity to co-invest alongside high-profile lead investors in the company’s series A and pre-IPO funding rounds.
Jayride underwent three rounds of equity crowdfunding via the VentureCrowd platform, securing over $0.6 million in investments. Jayride debuted on the ASX in January 2018 and early VentureCrowd investors have now realised returns of over 100 per cent on their investment from the first crowdfunding round.
How has VentureCrowd changed startup funding?
Typically, alternative investment opportunities were limited to institutional investors or specialised lenders. As a multi-asset class crowdfunding platform, VentureCrowd enables investors direct access to carefully chosen venture capital and real estate development co-investment opportunities.
In an environment where returns from almost every other traditional asset class are average at best, this demonstrates the significantly higher levels of potential gains available to investors by investing in unlisted companies or venture capital opportunities through VentureCrowd.
Steven Maarbani, Founder and Executive Director of VentureCrowd, said, “Investing in privately held companies that are in startup or expansion phases – venture capital investing – provides the opportunity for significantly higher potential returns than are generally possible from investing in traditional asset classes such as property, listed shares or bonds. This is because companies in their early stages of growth will generally have lower valuations than listed entities, which allows for much greater scope for growth and therefore capital gain.”
To date, the returns to VentureCrowd investors have been significantly higher than returns from other investments such as listed shares, property, term deposits or superannuation. Maarbani points out these comparisons with VentureCrowd:
- The Australian share market increased by only 7.1 per cent in FY17;
- If you can afford an investment property, the mean price of residential dwellings in Australia increased nine per cent in FY17, however you would need to be able to finance a $679,100 investment (the mean house price of residential dwellings in Australia on 30 June 2017);
- The highest rate of return for a 12-month term deposit in Australia at the moment is approximately three per cent and that requires a minimum investment to $100,000; and
- The best performing superannuation fund returned 10.79 per cent in the past year and an average of 9.39 per cent in the past seven years, according to Canstar.
From the business owners’ perspective, Maarbani said the platform’s focus is to open up prospects for local startups and businesses looking to expand in the Australian and global markets.
“Equity-based crowdfunding is growing at a steady rate and offers investors a chance to own a slice of a startup small business, that could potentially be the next Atlassian or Canva. Early stage capital direct from the crowd provides a cost-effective way for businesses to obtain funding to help them grow and scale,” he said.
Maarbani continued, “We look at crowdfunding as providing access to alternative investment opportunities and we are keen to see everyday people invest in new and innovative asset classes. When someone invests, they become more connected with the business and it becomes more personal – they become more like an owner and brand ambassador than just a consumer. With our distinct investor-led model, every day investors now have the opportunity to co-invest alongside professional and experienced lead investors on the same economic terms.”
