equity-crowdfunding-raise

This checklist will help make sure your equity crowdfunding raise is successful. Source: Unsplash/Visual Stories Micheile.

Finance
Tim Eisenhauer

How to successfully complete an equity crowdfunding raise

Authors
Tim Eisenhauer
Startup Advice
4 minute Read

Are you looking to raise capital? Like any startup, to scale your operations and become the unicorn that you could be, you will need growth capital. While SMEs do have a few options to decide between in terms of raising capital, there’s one that’s becoming increasingly popular in the Australian startup community — equity crowdfunding (ECF).

What is equity crowdfunding? Unlike rewards or donations-based crowdfunding, an equity crowdfunding raise invites the crowd to become shareholders in your business. Following the massive trend of the US and UK, in just three years the Australian ECF market has continued to grow on a year-to-year basis, having raised a total of $128,454,206 over 176 raises.

ECF is a unique method of raising capital as it is available to anybody and everybody, democratising investing and supporting startups. Equity crowdfunding enables you to take investment from sophisticated and high net worth investors, as well as the everyday ‘man on the street’… Everyone is part of the crowd.

As you may know, private companies can only have 50 non-employee shareholders, with equity crowdfunding any investor that becomes a shareholder in your company is exempt from this 50-shareholder rule. Instead of attempting to appeal to venture capitals and angel investors, you can now target like-minded individuals who relate to the purpose and initiatives of your business. For this reason, there are many direct and indirect benefits of participating in an ECF campaign.

Become a SmartCompany Plus subscriber to keep reading

Get your first 30 days FREE
Subscribe now
Already a Plus member?