12 Steps To Successful SME Capital Raising

Accountant's Minute 188

By now you will probably have heard about Crowd Sourced Funding Equity Raising (CSF) and just how powerful an option it is for your small and medium sized business clients to raise capital from the public.

There’s certainly a lot of buzz in the accounting industry at the moment.

While you may have heard about the concept in general, perhaps you aren’t completely up on all the details and its benefits.

Discovering all those details yourself could turn into a major research project if you try to do it from scratch.

Fortunately, we, at ESS BIZTOOLS, have done the tedious work for you.

Our team has collated all the information you’re going to need to get a full grasp of the process and we’ve put it together in one package.

Guess what we’ve called it?

The Crowd Sourced Funding Equity Raising Product Package.

What else could it be?

We know that for accountants, time is money, and there’s never enough of either.

New business and financial products are coming along all the time.

If you had to go out and research everything there is to know about every new financial opportunity, you’d never have enough time to get your real work done, right?

That’s why, with Crowd Sourced Funding Equity Raising, we’ve done the research for you, because we believe this is one concept that’s worth you investing your time to learn.

So, if you want to save yourself many hours of sweating over a hot keyboard, delving into the Internet and digesting the entire legislation, then this package may well be the answer you’re looking for.

At ESS BIZTOOLS, we think Crowd Sourced Funding Equity Raising is possibly the most important step forward for small and medium sized businesses in more than a generation.

It’s been operating successfully in several major western countries for six or seven years, but only became legal in Australia on 19 October last year.

As a leading provider of information to the accounting industry, our team at ESS BIZTOOLS has researched every aspect of Crowd Sourced Funding Equity Raising from the very early days, when it was being discussed and negotiated between industry groups and the Federal Government, until it finally became law.

Now up and running, we believe it is going to quickly become the ‘preferred option’ for qualified SMEs to raise capital, free from the constraints of personal guarantees and security.

Qualified SMEs are those turning over less than $25M per year, with combined assets of less than $25M and not listed on any stock exchange.

Crowd Sourced Funding Equity Raising is not only an opportunity for your SME clients to grow their business through access to capital, but also opens the door to new ongoing revenue streams for your accounting practice.

What’s in the CSF Product Package?

Our comprehensive product package is delivered online and contains information, articles, videos and copies of webinars to guide your team through every stage of the funding process.  This will arm you with all the information you’ll need to begin giving accurate advice to your clients.

We all know that clients can become overwhelmed and somewhat confused, when they’re confronted with an entirely new financial concept, like Crowd Sourced Funding Equity Raising.  It’s a lot to take in and it can take a while to fully appreciate all the benefits.

So, within the package, you’ll find easy-to-read takeaway information for you to give to your clients, so after your initial briefing, they can sit down in the comfort of their home or office and begin to take in all the benefits the process could possibly offer them.

New SME Capital Raising Scorecard

Crowd Sourced Funding Equity Raising is already beginning to generate momentum, with nearly $23.2 million raised by the various ASIC-appointed Intermediaries for 27 companies in the first four months of operation.

That’s a pretty impressive uptake and the figures are changing almost every day.

To keep accountants abreast of this emerging capital-raising marketplace, we have introduced our Crowd Sourced Funding Equity Raising Scorecard, as part of the product package.

Each month the Scorecard will be updated, giving accountants an insight into the performance of the various Intermediaries, an indication of which industry sectors are attracting the greatest investor interest, and how much capital has been raised.

This information will allow you to target the most appropriate Intermediary for your client’s needs.

Which Clients are a good fit for CSF?

Once you’re comfortable with how Crowd Sourced Funding Equity Raising works, I’m sure it won’t take you long to realise that you probably have a number of SME clients, who could really benefit.

They may be clients, who have existing bank loans or personal guarantees on the line, and they’d probably be very interested in coming in and talking over their options with you.

Alternatively, you may want to be more proactive and invite a number of clients to a presentation and put the idea to them.

All the information you need to stage an information night is contained in our package, including pro-forma documents into which you can electronically insert your own company’s details and logo.

Taking your Clients on the CSF Journey

Most accountants love clearly defined processes. It must be in our DNA!

At ESS BIZTOOLS, we like to visualise Crowd Sourced Funding Equity Raising as a journey.

We’ve broken this journey down into 12 Steps that will, hopefully, help simplify the process for you, and make running the Crowd Sourced Funding Equity Raising process for the first time, a little less daunting.

Step 1 – Is your client potentially eligible to be a CSF company?

Step 2 – Is your client interested in raising capital?

Step 3 – Level of Disclosure – Is your client ready to proceed?

Step 4 – Understand the various Investor categories.

Step 5 – Understand the role of the Intermediary.

Step 6 – Make contact with the Intermediaries and select the most appropriate Intermediary for your client.

Step 7 – Prepare the Crowd Sourced Funding Offer Document and supporting documentation

Step 8 – Forwarding the CSF Offer Document to the Intermediary.

Step 9 – Go Live on the Intermediary’s platform.

Step 10 – What to do if your Crowd Sourced Funding Offer Document is found to be defective.

Step 11 – Closing the Crowd Sourced Funding Offer.

Step 12 - Post Capital Raising processes.

Each of these steps will require input and expertise from your accountancy firm and members of your CSF team.  You will need to lead your client through this journey as a ‘trusted advisor’ to ensure their SME operation has the greatest possible chance of being fully funded by the Intermediary’s investor base.

One of the greatest benefits of this form of capital-raising is that your qualified SME client can go back to the investor marketplace, to raise up to $5-million every year …. year after year.  It’s a ‘win/win’ for accountants and SME clients alike.

The benefits for accountants come from developing:

  • a reputation for expertise in this new form of capital-raising for SME clients; and
  • new revenue streams for providing premium services.

Your SME clients also benefit greatly by having the ability to raise capital from the public without the need for:

  • security;
  • personal guarantees; or
  • monthly repayments.

Crowd Sourced Funding Equity Raising is a major innovation for small and medium sized businesses.  We, at ESS BIZTOOLS, aren’t in the business of raising capital, and we’re not an Intermediary.

Our interest is in providing proactive accountants, like you, with the information you’ll need to fully understand this new capital-raising process, and in providing all the pro-forma documents you’ll need to get your clients ready for funding.

Subscribe to our Crowd Sourced Funding Equity Raising Product Package today.  It’s backed by our Full Money Back Guarantee.  Click here to subscribe.

Why not join us for an in-depth webinar when we will demonstrate the Crowd Sourced Funding Equity Raising Product Package on Tuesday, 12 March 2019 at: 11.30am AEST; 12.30pm AEDT; 9.30amn AWST; 11.00am ACST; 12.00pm ACDT.  To register for this free webinar, please click here.

Have a great day!

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Episode 188 - 12 Steps To Successful SME Capital Raising

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