7 Facts Accountants Need To Know About Crowd Sourced Funding Equity Raising

Accountant's Minute 187

A sure way to be rewarded with new revenue streams is to be a progressive and innovative accountancy firm, always open to new business ideas which could help your clients build a future for their companies!

A number of accountancy firms are already benefiting from the introduction of Crowd Sourced Funding Equity Raising, which finally became legal here in Australia for small proprietary companies on 19th October last year.

The ASIC-appointed Intermediaries, who are now overseeing the new capital raising system for small and medium-sized businesses, have reported that $23.1 million has already been raised for 27 companies since the process was given ‘the green light’ just four months ago.

Crowd Sourced Funding Equity Raising offers a significant opportunity for accountants to diversify and generate new revenues, by helping your SME clients to reorganize their business finances and take advantage of new market opportunities.

The new SME capital-raising process is the biggest change in business finance for the small and medium-sized business sectors in 35 years.

Crowd Sourced Funding Equity Raising offers a number of distinct advantages for your accountancy firm, if you're prepared to become expert in the process, and in doing so, help your clients.

This form of capital-raising has international roots and is set to accrue widespread benefits amongst small and medium-sized accountancy practices.

Why do I believe the Crowd Sourced Funding Equity Raising process will be very successful for your accountancy firm, team and clients?

  1. The process has been thoroughly proven in the U.K., U.S.A., Canada and New Zealand over the past six to seven years and is now challenging Venture Capital, in some of those countries, as the preferred source of funding for small and medium-sized businesses.
  2. As of 19th October 2018, small and medium-sized businesses can now raise capital direct from the public here in Australia.
  3. Substantial new fees will be generated for your accountancy firm if your team learns to guide your clients through the various stages of capital raising. These stages include:
  • briefing and advising your clients on the crowd sourced funding process including the role and responsibilities of the Intermediary
  • assisting your client to negotiate with Intermediaries and to select an Intermediary to act for your client
  • preparing a Business Plan or a detailed list of the key attributes of the company
  • preparing Budgets and Cashflow Forecasts
  • assisting in the determination of an appropriate strategy for the capital raising process, including the amount of capital to be raised, shares to be issued, share price
  • preparing the Crowd Sourced Funding Offer Document; and
  • potentially acting as a Virtual CFO after the capital has been raised
  1. Most SMEs that are eligible to raise capital through Crowd Sourced Funding Equity Raising will be clients of firms like yours and it’s these clients who will need professional assistance on the crowd sourced funding equity raising journey.
  2. If your firm embraces the Crowd Sourced Funding Equity Raising process, your team will take on a new role as business advisors to your clients (not just tax) and the work that your firm undertakes will be more interesting and varied, resulting in greater professional satisfaction and team morale.
  3. Small and medium-sized business clients will come to have a greater appreciation of your accountancy firm’s worth to their company, because of the specialised, proactive solution you have been able to provide for them.
  4. By utilising Crowd Sourced Funding Equity Raising, your SME clients will now be able to raise capital:
  • without security
  • without personal guarantees, and
  • without monthly repayments

Crowd Sourced Funding Equity Raising is a ‘win-win’ situation for small and medium-sized business clients and your firm.

ESS BIZTOOLS provides a free information service on the basics of Crowd Sourced Funding Equity Raising on our website - ESS BIZTOOLS - Crowd Sourced Funding - Learn More.

We have also developed a product package specifically for accountants, which will quickly bring your team up to speed on the new SME capital-raising process and give your team access to all the pro-forma documents necessary to get your small and medium-sized business clients ready for funding.

You are invited to join accountants from all over Australia in a free webinar “7 Facts About Crowd Sourced Funding Equity Raising” on Wednesday, 27 February 2019 at 11:30am AEST, 12:30pm AEDT, 11.00am ACST, 12-noon ACDT, 9:30am AWST (Click here).

If you'd like to talk further about Crowd Sourced Funding give me a call on 1800 232 088 or email me - peter@essbiztools.com.au

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