06 Dec “Scaling Up” – Crowd Sourced Funding Could Help!
Doesn’t it really “frost your cookies” that medium-sized businesses always seem to get left out of the most important decisions?
Well, as it turns out, the medium-sized business sector has finally scored a big win!
Many medium-sized companies will be perfect candidates for the concept that is going to revolutionise capital raising for Australian business and it’s already underway.
This is not a gimmick!
Last month we discussed the effect that Crowd Sourced Funding Equity Raising will have on small companies – this concept also applies to medium sized companies – companies with turnovers $2 million to $25 million are ideally placed to utilise Crowd Sourced Funding Equity Raising to raise capital.
“Scaling up” to the next level or even 2 or 3 higher levels requires:
- People – management needs to identify core values and then engage people who can implement those values for the benefit of every person within the business.
- A strategy – the company needs to identify what the plan is and document how this will be achieved:
- Will this strategy appeal to your present and future customers?
- Will your business be able to differentiate itself from competitors?
- Driving execution – companies committed to “scaling up” need to implement policies which will:
- identify priorities
- identify meeting schedules – daily, weekly, monthly
- keep everyone in the loop
- Managing cash – it is very important for a company that is “scaling up”:
- to ensure that the company doesn’t run out of cash
- cashflow management is vital for company’s “scaling up”
- directors and management need to be very aware that “growth sucks cash” – inventory, debtors, capital expenditure, training, research and development, protecting intellectual property, people, premises – all cost money.
The other key requirements for medium sized companies to raise capital as Crowd Sourced Funding Companies are:
- group gross assets valued at less than $25 million
- the company and no associated company is listed on a stock exchange anywhere in the world
- neither the company nor any associate is registered on a financial market outside of Australia
Implementing capital raising as a Crowd Sourced Funding Company could prove to be an “apprenticeship” for a subsequent Initial Public Offer (IPO) for a listing on a stock exchange if that is what the company directors are interested in doing.
The experience of participating in the Crowd Sourced Funding Capital Raising process, working with a Crowd Sourced Funding Intermediary, accepting that a group of external shareholders own a percentage of your company, gaining from the experience of having some external directors on your board of directors, potentially dealing with auditors, is all valuable corporate governance experience if your company ever decides to proceed with an IPO or just wants to double the company’s turnover over the next 3 to 4 years.
If you would like to discuss your vision for your company, please don’t hesitate to contact Tony or Josh for a discussion.