Only Unlisted Public Companies can use Crowd Sourced Funding Equity Raising?
Towers Business Development News
This is a MYTH!
Whilst it is true that eligible ‘Unlisted Public Companies’ are able to utilise ‘Crowd Sourced Funding Equity Raising’ to raise capital, but very importantly, so can ‘Private Companies’.
When the legislation Corporations Amendment Act was introduced (September 2017), only ‘Unlisted Public Companies’ were able to utilise this process for raising capital from the public.
However, the Government soon realised that the overwhelming number of companies wanting to raise capital, without incurring the significant costs of undertaking an ‘Initial Public Offer’ (IPO) were ‘Private Companies’. Amendments to the legislation were passed in September 2018, enabling qualifying ‘Private Companies’ to utilise ‘Crowd Sourced Funding Equity Raising’ to raise capital.
Private Companies are now the largest users of ‘Crowd Sourced Funding Equity Raising’, with over $248M having been raised for companies with annual turnovers less than $25M since 2018.
If your company has a worldwide turnover of less than $25M and gross value of assets of less than $25M, and you need funds for the ongoing ‘scaling up’ of your company, then ‘Crowd Sourced Funding Equity Raising’ presents an opportunity to raise capital without incurring the significant costs involved with an IPO.
This week, we will present a series of observations discussing the preparation that Companies need to undertake if you wish to raise capital in this manner.
Towers Business Development can assist Company Directors and leadership team members on the ‘Crowd Sourced Funding Equity Raising’ journey.