Equity crowdfunding will fill a fund-raising gap in Australia, says expert
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Equity crowd-funding can support innovative products that might be slightly “too small” for traditional capital raising says Geoff Reilly, founder of equity crowd-funding platform Sharequity.
There is a lot of excitement around the strength of ASX-listed small caps, how has that translated to capital raisings?
Conditions are certainly getting better, we’ve recently seen a lot of fintech and mining IPOs that were over-subscribed and it’s a pleasing sign to see.
It’s certainly not like the days gone by where you had to push very hard to get the minimum subscriptions.
There seems to be a change in personal sentiment — finally it’s the year for IPOs. The second half of 2017 was certainly more positive — I am hoping that leads us to a reasonable 2018.
What is driving the increased involvement, especially by retail investors?
I think a lot of people have been sitting on the sidelines and now they have got to the stage where they are ready.
A few IPOs of late have been supported fully by retail investors and I think that shows just how strong the push is.
Sentiment towards resources is certainly more promising and investors are looking for opportunities. They see disruptive type business doing well and they want to get in on the next big thing.
How does equity crowd funding fit in the mix?
Changes in regulation have allowed players like Sharequity to emerge and we simply provide a platform for transparency.
I think a lot of deals get done without people seeing them and this opens up the transactions more completely.
In terms of value, there has always been a need for something in between seed funding or an institutional raise. We want to hit that sweet spot of $1-3 million to support the innovative products that might be slightly “too small” to garner the attention of brokers.
That being said, we look to syndicate or partner up with traditional players instead of competing with them.
How has technology played a part in the evolution of investing or raising capital?
Technology has enabled the changes in the market.
Now clients want to make decisions for themselves where previously advisors were largely deciding what is right and wrong.
This will be similar to what online broking did 15 years ago, and just as we adapted then I think digital equity crowd funding will slot in smoothly.
For us it’s steady as she goes in the evolution of the platform, we will look to bolt on projects where necessary for the client — whether corporate or retail.
Sharequity is an Australian equity crowdfunding platform that connects investors with companies seeking to raise capital. More information: sharequity.com.au