Where is Your Business Model at?

And where would you like to take it?

Depending on where your business model is at, we can tailor a program to assist you with your capital raising aspirations! From start-up business concepts requiring $100,000 or so, through to companies seeking $10,000,000 plus for expansion plans or even for those preparing to list on a stock exchange at some point in the future.

Examples of Capital Raising Scenarios

1. A Company that might seek a future stock exchange listing!
2. A Company seeking to become a take over target by a larger company!
3. A Small Company simply seeking some investment to take it to the next level.

1.) A Company that might seek a future stock exchange listing!

If for example, a company was seeking to raise $2,000,000 and that might (after raising that capital and implementing growth plans) achieve a NPAT (Net Profit After Tax) earnings target of say $3,000,000 in 2 to 3 years time, then the company might possibly list on a primary or secondary stock exchange with an assumed P:E valuation of say 10:1 or a capitalisation of $30,000,000. Not bad if the Founder's can manage to retain say 70% of the share holdings yes? Stock exchange listings can unlock a much higher P:E valuation for a company, even as high as 20 x Earnings or more, depending on the sector and the business model etc.

Article: Why Go Public? And What are the Advantages? 

Or

2.) A Company seeking to become a take over target by a larger listed company!

Not all companies wish to seek a listing on a stock exchange however, and often it makes sense to perhaps sell out to an existing listed company (a bigger fish).

In this example, RSVP 'an online dating website' was making about $4 Million per annum and Fairfax bought them for just under $40 Million.

RSVP could have listed on a stock exchange in it's own right, but opted for being bought out by an existing player that was already listed on a stock exchange "Fairfax".

So Fairfax paid close to 10 x Earnings for RSVP. This was a great deal for the Founders and shareholders in RSVP no doubt, and yes, they could have made more if they listed the company, but it was no doubt an easier option to sell out.

Had they sold RSVP as a normal business to a private owner, they may have only sold it for perhaps $12 to $16 Million at 3 to 4 x Earnings which is the going rate for private business sales.

$40 Million sounds like a lot yes? But when you couple that up with Fairfax's ability to cross merchandise and grow the RSVP business, as well as the fact that Fairfax was trading on the ASX at the time at 16.2 x Earnings in it's own right at the time.. The deal made perfect sense to Fairfax.

If Fairfax helped RSVP to make $6 Million in the following year and the profits flowed up to Fairfax, then it might be fare to assume that the deal would then be worth $96 million to them at 16 x Earnings.

Such a deal might be the target for fledgling companies.. Raise capital, expand the business, hit targets, threaten to list on an exchange and also field possible take over bids from larger fish..

We shall provide you with a copy of an article on this acquisition by email :-)

Or

3.) A Small Company simply seeking some investment to simply  take it to the next level.

Your aspirations may not be as grand as those listed in the above examples?

Perhaps you are just looking for one, or maybe a small handful of investors to take a stake in your business and take it to the next level?

Even private companies seeking small amounts of investment, still need to make their offer attractive to a potential investor, and any capital raising by a company of any size is still subject to adhering to ASIC regulations when seeking investment!

Smaller private companies can also benefit from equity injections from investors. And whilst private companies are only ever likely to be worth 3-5 times earnings or so; if the offer is structured right and you present an interesting and attractive proposition for investors, then you can often succeed in raising capital by offering prospective investors a return via a future share buy back, an offer of redeemable preference shares or many similar offer depending on your particular situation.

Whatever your requirements, we can assist you with a suitable plan to get things moving in the right direction!

Whichever way you decide to go, it is important to have an offer that is structured to suit the stage that your company is at, and that any offer to investors is ASIC compliant! The penalties for breaching ASIC regulations when seeking investors can be quite harsh, so don't risk it! We can assist you with all the processes, compliance and marketing plans for launching your investment offering!

It's one thing to simply have a great idea for a new business or expansion plans for an existing business, but when you are seeking investment, a compliant and structured offer is required if you expect investors to take your offer seriously.

What we like to do, is to help create an attractive scenario for you "The company Founders" and then to raise capital in a logical and staged manner that offers more leverage to early stage investors, hence, getting them off the fence and on board as shareholders. Please review this page for an example of a possible, staged capital raising model please Click Here!

Small Scale Offerings

Such offerings are often thought of as being restricted to $2 Million in capital raising per 12 months from as many as 20 investors. However, this is not the case. And who you target for investment and how, is just as important as how much you need to raise. In fact, you could raise anything from $100,000 to $10,000,000 or more under these regulations though a mixture of offers consisting of personal offers, and offers of investment to sophisticated investors and numerous other excluded offers suchh as those made under the ASIC Class Ordder 02-273 via our affiliated investor network!

How we can assist you with your own small scale offering?

We not only rely on the standard regulations of the Corporations Act 2001 for assisting you in capital raising, but also on an exemption afforded to Business and Investment Matching Services under the ASIC Class Order 02-273 via our affiliated "EquityAssist" Online, Business and Investment Matching Service!

So in addition to the standard "Small Scale Offerings Regulations", we can also provide an additional advantage in raising capital via exempt offering utilising an Online, Business & Investment Matching Service. Via this exemption, a number of the restrictions that apply to regular Small Scale Offerings, are lifted to some degree.

This added benefit also allows you exposure to our existing "Equity Assist" investment network of thousands of pre-registered subscribers/potential investors, as well as being able to advertise and market your investment offer under the law, without breaching share hawking or investment advertising restrictions normally imposed on companies seeking investors under the Corporations Act 2001.

A combination of these regulatory offerings, offers the best result for early stage capital raisings.

For further information on our Capital Raising Solutions, Please Click Here!