Crowd Sourced Funding is a ‘funding opportunity’ for SMEs
Business Advisory Services Update
Accountants and Bookkeepers servicing the SME market need to have an awareness of the ‘fund raising opportunities’ that Crowd Sourced Funding Equity Raising presents for SMEs.
An ASIC appointed Crowd Sourced Funding Intermediary, Birchal, released the “Crowd Sourced Funding Yearbook for 2023” this week. The yearbook indicated that over 380 companies have raised a total of $289M since the Crowd Sourced Funding Regime commenced in 2018.
The industry sectors which related to the capital raising were:
Food and beverage
Healthcare
Sustainability
Consumer goods
Manufacturing
Agriculture and farming
Transportation
Financial services
Clothing and apparel
Apps
Travel and tourism
Real estate
Media and entertainment
Software
The Birchal report indicates that the ‘total market cap 2023’ was $1.1B. This was the total value of all companies that completed successful Crowd Sourced Funding Offers in 2023.
At this stage, the market is dominated by two of the 16 Crowd Sourced Funding Intermediaries (Birchal and Equitise). This indicates that there are opportunities for increased deal flow if you have clients who are interested in engaging your firm to assist them to achieve ‘Investment Ready Status’ to enable them to submit an application to a CSF Intermediary.
Besides the discussions on the business plan, budgets, cash flow forecasts etc one tactic that seems to be working very well for the companies that have successfully raised capital is they have established a website prior to approaching a CSF Intermediary.
On the website, they have included details about the company, its products, vision and profiles of the directors and leadership team members.
The aim should be to create people who have an ‘understanding of the company’ and what the company is attempting to achieve.
When the company has satisfied the Crowd Sourced Funding Intermediary and the marketing for investors commences, some of these people may decide to invest and become shareholders because they have an understanding of the company’s vision.
The ESS BIZTOOLS’ Crowd Sourced Funding Equity Raising Product Package empowers Accountants/Bookkeepers to offer the services that your SME clients need.
