Crowd Sourced Funding Equity Raising – Is It For You?

If you can spare just a few minutes, I’d like you to consider a couple of questions.

The answers to these questions could help:

• reshape the way you do business;
• pave the way for more interesting and challenging work;
• produce some very happy clients; and most importantly;
• create a new sources of revenue.

Here’s a suggestion.

Why don’t you print out this article and note the answers next to the questions, so you can review them later.

Let’s start with an easy one first.

How many enquiries have you received so far this year about funding for a small or medium-sized business?

Were you able to help those clients who contacted you for funding advice?

If you were, that’s great, but did they have enough security for a loan?

Were they happy with those personal guarantee requirements?

Were they able to fund the monthly repayments to cover both principal and interest?

Did you refer them to:

• a bank
• a venture capitalist
• to another adviser outside your firm; or
• some other type of service provider?

What sort of fees did you generate from this client enquiry?

Would you say the fee you charged was high, medium or low, or did you just write off the time that you spent?

Let’s jump back a bit and look at the client who first came to mind.

If the answers to these questions checked all the right boxes, then your SME business client could be eligible to raise up to $5-million in capital in twelve months from the public through Crowd Sourced Funding Equity Raising.

Was that one of the suggestions you raised with them?

• Investors acquire shares in the company, but the current owners can retain controlling interest.
• There’s no requirement for anyone to put up security
• There are no personal guarantees needed.
• No monthly interest repayments or repayments of any sort.

Crowd Sourced Funding Equity Raising is a powerful form of capital funding for small and medium sized businesses, but it is still under-utilised here in Australia.

Nonetheless, it is showing some very positive signs:

• $157m has been raised by progressive SME companies to expand their business operations over the past three years.
• In the March quarter this year, $10m was raised directly from retail and sophisticated investors in Australia.
• This represents an 89% growth over the same period in 2021.
• Companies raising capital come from a diverse range of industries.

In three examples, a Gold Coast brewer, a hot sauce brand and an adventure apparel manufacture raised a cumulative $4,525,000.

Matt Vitale, the Managing Director of Crowd Sourced Funding Intermediary, Birchal, claims that Crowd Sourced Funding Industry continues to go from strength to strength.

“Total funding volumes for the financial year to date exceed $57m across 65 successful Crowd Sourced Funding offers” Matt says.  “That’s about double the total funding volume of $28.4m at this time last year”.

“Crowd Sourced Funding has fast become an efficient and effective mechanism for companies to raise capital from their most passionate customers and fans”.

Is Crowd Sourced Funding Equity Raising an opportunity that you’re letting pass by for both you and your clients?

Are you holding off having discussions with your SME clients because you don’t yet feel that you fully understand the details of the concept?

For a company to be able to raise capital utilising Crowd Sourced Funding Equity Raising they’ll require you, as their accountant, to produce some high level work for them, including:

• A Business Plan
• Predictive Accounting Reports – Budgets, Cash Flow Forecast and Projected Balance Sheets
• Business Valuation
• Determination of the number of shares to be offered for the capital raising, supported by the business valuation.
• Crowd Sourced Funding Offer Document.

This is the type of work many of your team members would love to be involved in.

“Accountants Daily” indicated in December that around 70% of accountants were looking around at other opportunities. That’s a scary prospect for any practice owner to face!

Andrew Geddes, the accounting industry coach and mentor, says the issue for accountancy firms is to provide younger accountants with enough interesting and challenging work to keep them satisfied.

Crowd Sourced Funding Equity Raising may provide that challenge in your firm.

Better still, offering this type of premium service to your SME clients can bring with it, ongoing premium fees.

ESS BIZTOOLS has been more than a keen supporter of Crowd Sourced Funding Equity Raising since it was legalised in Australia four years ago.

In fact, we’ve been helping professional accountants to better understand the concept.  We’ve also researched and provided the materials needed to streamline the application process to meet the stringent regulatory standards.

Our ESS BIZTOOLS Crowd Sourced Funding Equity Raising Product Package contains all of the forms and templates that you’ll need to give your clients the best advice and most efficient service.

Why not visit our website www.essbiztools.com.au to review the product packages that we have on offer. 

If you’d like to explore the benefits of Crowd Sourced Funding Equity Raising, have a talk to our Managing Director, Peter Towers.

Call 1800 232088 to arrange a no-obligation one-on-one Zoom call with Peter.  You’ll find it’s time well spent, as Peter can advise you on the best strategy options for your firm.

Crowd Sourced Funding Equity Raising may be your firm’s first step towards offering a wide range of Business Advisory Services to your clients.

Take that step now…. www.essbiztools.com.au

If you would like to know more about how you can help to steer your clients to greater success by providing Crowd Sourced Funding Equity Raising and Business Advisory Services advice please visit www.essbiztools.com.au where you can review the services that we, at ESS BIZTOOLS, provide to accountants all over Australia.

You could join us for our free webinar “Services That Small/Medium Sized Accountants Could Provide” on Wednesday, 20 April 2022 at 12 noon AEST.  To register please go to www.essbiztools.com.au/webinar registration .

You could also join us for our free webinar “Predictive Accounting – Why Your Clients Need These Services” on Wednesday, 27 April 2022 at 12 noon AEST.  To register please go to www.essbiztools.com.au/webinar registration.

If you would like to receive a complimentary copy of “Why Your Accounting Firm Must Begin to Offer Strategic Business Advisory Services to Clients” click here.

INTERESTED IN OUR SOCIAL MEDIA POSTS/VIDEOS?

• Developing Product Champions – click here to read the article or click here to watch the video.
• Crowd Sourced Funding Record – click here to read the article or click here to watch the video.
• Leadership Skills Help – click here to read the article or click here to watch the video.
• How Accountants Gain – click here to read the article or click here to watch the video.

KEEP UP-TO-DATE WITH OUR WEBINARS

• Setting a 50/50 Target – to access click here
• How Accountants Gain from Business Advisory Services – to access click here
• Academy of CPAS – Launch of Predictive Accounting in Australia – to access click here

If you would like to see how your accountancy firm can introduce Business Advisory Services and start generating additional revenue, go to our homepage and click on “Free Strategy and Demonstration Session”.

Alternatively, if you’d like to discuss your options, that’s fine too.

Please call us on 1800 232 088 so we can arrange a no obligation Zoom meeting to talk over the strategies and benefits for your firm.

Stay safe!  Have a great Easter weekend.