17 October 2017 @ 9:00AM Equity Crowdfunding Issuers
With the media and investors fascinated with finding the next business ‘unicorn’ (companies with valuations greater than a billion dollars), it is easy to think that raising investment dollars for innovative, disruptive and growing small companies should be easy. However, according to Macquarie Equities, Australian entrepreneurs want to borrow up to $60 billion (that is billion with a ‘b’) a year more than they are currently allowed. It is estimated that 200,000 small and medium sized Australian businesses have difficulty growing because banks won’t lend them money.
Equity crowdfunding is an exciting new alternative to the more traditional sources of capital and one that has been proven in other markets like the US and UK, where it has been in operation for a number of years, to have the power to change the economic landscape in favour of small business. Equity crowdfunding provides small businesses with the ability to source capital from the ‘crowd’, bringing entrepreneurs and consumer investors together for the first time.
Here are 3 reasons why you should raise money for your growing business via equity crowdfunding.
Equity crowdfunding allows you to place your capital raising offer online and communicate your vision to tens of thousands of potential investors – all at once. Traditionally, business founders have had to devote a lot of their time when capital raising to meeting, pitching and then following up potential investors. Instead, equity crowdfunding allows businesses to use their valuable time to progress and develop their business.
Equity crowdfunding definitely suits businesses with a loyal and growing customer base, and it is perfectly tailored for businesses wanting to grow their brand awareness. Placing your offer on a platform with a large crowd will help spread the word about your business. As opposed to relying solely on press coverage or advertising to get your business known, the crowd will talk to their friends, or share your offer on social media ensuring more recognition and awareness of your brand and product. The beauty of the crowd is that these investors become your endorsers, your influencers and your advocates.
Your new shareholders acquired through equity crowdfunding are now your most loyal and engaged customers. They will want to review your product, offer feedback, ask questions and suggest new ideas. Some business owners may be put off by this, but this is a ready-made database that you can leverage. You both have ‘skin in the game’ and you want the same thing, that is, that the company grows and generate profitable returns. It is critical for a growing businesses to get key feedback from users of their products. Where better to get ideas from than your shareholders! In fact, it’s not too far-fetched that the company’s next big idea could actually come from someone not even on your payroll.
OnMarket makes investing and capital raising an efficient, simple and transparent process that is accessible to everyday investors and businesses making a change in the world. OnMarket has recently applied for an equity crowdfunding licence and will soon enable equity crowdfunding, connecting investors with businesses that are making a change for the better. By investing in companies offering equity via OnMarket, everyday investors can share in the upside in businesses that ultimately will make a better, smarter, more sustainable world.
To read our comprehensive guidebooks showing you how to raise capital for your business go to www.onmarket.com.au.