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Early Stage Innovation Company Capital Raising

Companies which have developed new technologies and qualified as an ESIC will be very attractive to investors.

About This Poduct

  • Young companies which have developed a new product, process or service can qualify as an ESIC, thus enabling the company to raise capital from shareholders who will then be eligible to claim a tax offset of 20% of their investment and potentially able to claim an exemption from capital gains tax, if they hold those shares for longer than one year and less than ten years.

  • The ESS BIZTOOLS’ Early Stage Innovation Company (ESIC) Product will assist accountants/business advisers to offer a comprehensive service to clients who believe they can qualify as an ESIC.

Webinar Recording

This Product Comes With...

Product Content

The Product Includes: Procedure Control Form, papers, templates, webinar transcript and videos for businesses and investors.
  • Procedure Control Form
  • Papers:
    • Early Stage Innovation Company (Paper 570-051)
    • Early Stage Innovation Companies (Paper 003-045)
    • Self-Assessment for Early Stage Innovation Company (Paper 003-046)
    • Investment Readiness for Early Stage Innovation Companies (Paper 040-010)
    • Investment Pitches for Early Stage Innovation Companies (Paper 040-096)
  • ESIC - Eligibility Calculator, including:
    • Provisional Test
    • Gateway Test
    • Principles Based Test
    • Templates for supporting information for the test questions
    • Self-assessment as an Early Stage Innovation Company - Gateway Test Statement
    • Self-assessment as an Early Stage Innovation Company - The Principles Based Test Statement
  • Investment Readiness Items
  • Investment Pitch Items
  • Marketing Material:
    • Seminar for promotion to clients and prospects
    • Promotional material for communication with clients and prospects
    • Video - "Why is ESIC Exciting for Businesses?" (BAS9400)
    • Template - "Why is ESIC Exciting for Businesses?" - to assist you to develop your own video (BAS9401)
    • Seminar Package for promotion to clients and prospects
  • Investors:
    • Checklist on Early Stage Innovation Company (ESIC) for Investors (BAS9501)
    • Tax Incentives for Early Stage Investors (Paper 012-058)
    • Video - "Why will Investors be interested in an ESIC?"
    • Template "Why will Investors be interested in an ESIC?" - to assist you to develop your own video (BAS9552)

Want To Know More?

Read More Information on Package

Early Stage Innovation Companies – a great opportunity for young innovative companies.

The government expects a large number of companies will attempt to be classified as an “Early Stage Innovation Company” (ESIC) to assist in capital raising.

Early Stage Innovation Company Capital Raising – Eligibility Requirements

  • Company has developed new products, processes or services and wishes to raise capital.

There are three tests.  To be an Early Stage Innovation Company, the company must pass the first test and then either Test 2 (Gateway Test) or Test 3 (The Principles Test).

Test No 1 – Test Time Determination

  • Company under 3 years of age.
  • Company and its 100% subsidiaries expenditure under $1 million in the previous 12 months.
  • Company and its 100% subsidiaries income under $200,000 in the previous 12 months (not including any grant income from accelerating commercialisation grant)
OR
  • A company under 6 years of age can also qualify in some circumstances.
OR
  • A company under 6 years of age can also qualify in some circumstances.

Test No 2 – Gateway Test

The company has to earn at least 100 points that are available if the company has undertaken some specified activities relating to:
  • Research and Development Expenditure.
  • Participant in the “Accelerating Commercialisation Grant Program”.
  • Already raised $50,000 plus in capital from “non-arms-length investors”.
  • Has registered a patent.
  • Has registered a plant breeder’s patent.
  • Has registered an innovation patent.
  • Has registered a “registered design”.
  • Has completed, or is undertaking an “Accelerator Program”.
  • Has a written agreement with an institution listed in the schedule to the Higher Education Funding Act or the Industry, Research and Development Act relative to the development of a product?

Test No 3 – The Principles Based Test

  • Applies if the company does not qualify under the Gateway Test. There are 5 tests which are subjective:
  1. Is the company genuinely focused on developing for commercialisation one or more new, or significantly improved products, processes, services or marketing or organisational methods?
  2. Does the business, in relation to these items, have a “high growth potential”?
  3. Can the company demonstrate that it has the potential to be able to successfully “scale that business”?
  4. Can the company demonstrate that it is the potential to be able to “access a broader than local market”?
  5. Can the company demonstrate that it will have a “competitive advantage”?

Early Stage Innovation Companies are not restrained by S708 of the Corporations Code (restricts capital raising to $2M from up to 20 investors each 12 months) and investors can be eligible for a significant bonus:

  • 20% tax offset on the investment in the year of investment;
  • sophisticated investors maximum tax offset of $200,000;
  • retail investors maximum tax offset $10,000 ($50,000 maximum investment); and
  • a Capital Gains Tax exemption on the investment from the end of year one to the end of year nine.

A key component of the legislation is that companies can “self-assess“.

It’s expected that investors will wish to closely review the basis for self-assessment prior to making an investment in a company.

If the “self-assessment” process is conducted with strong professionalism, this should substantially assist a company being able to raise capital at an earlier time than waiting for a self-assessment application being made to the Australian Taxation Office/AusIndustry.

Most of these companies will be keen to get started on the capital raising at the earliest opportunity.

The ESS BIZTOOLS Product Package for “Early Stage Innovation Companies” has been designed to assist accountants/advisors to use the ESS ESIC Calculator to answer each question and to ensure that satisfactory supporting evidence has been procured and filed to substantiate the answers submitted.

This process will facilitate negotiations with potential investors and ultimately the Australian Taxation Office when the taxation return is lodged after the capital has been raised.

Subscribers automatically are sent any edited or new material produced for Early Stage Innovation Company Product Package in the next 12 months.

Potential other consulting work that might be required for the ESIC assessment:
  • Negotiations with Australian Taxation Office/AusIndustry in relation to assessment as an ESIC
  • Business Plan
  • Budgets and Cashflow Forecasts
  • Company Valuation
  • Share Pricing Report
  • Information Memorandum
  • Mentoring in investment pitch presentation
Potential other consulting assignments for the accountancy/business advisory form:
  • Chief Financial Officer Services
  • Finance Director Role
  • Audit Services
  • Will You Have an ESIC Story? (BAS9000)
  • Introducing the Early Stage Innovation Company Package (BAS9300)
  • New Type of Companies (BAS9301)
  • Blog Articles/Accountants Minute:
  • Accountants Don’t Forget Early Stage Innovation Companies (Click here)
  • Accountants, Capital Raising Opportunities Give You a New Income Stream (Click here)

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Price: $1,500 (incl GST)
(Yearly)
Also included in the...
- Financial Forecasting Package
- Advanced Business Advisory Package
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If, after 60 days, you are not completely satisfied with ESS BIZTOOLS, we will gladly refund your subscription.

Primary Packages

Early Stage Innovation Company Capital Raising is also included when you subscribe to any of the following packages.

Special! (Monthly Rate)
WAS $798
NOW: $399 (incl GST)
(12 x Monthly)
Special! (Yearly Rate)
WAS $7,980
NOW: $3,990 (incl GST)
(Yearly)
Learn more
Book a Demo
Subscribe Now
Special! (Monthly Rate)
WAS $594
NOW: $297 (incl GST)
(12 x Monthly)
Special! (Yearly Rate)
WAS $5,940
NOW: $2,970 (incl GST)
(Yearly)
Learn more
Book a Demo
Subscribe Now