The Crowd Welcomes A New Era For Capital Raising

The first intake of small businesses trialling Australia’s first equity crowdfunding hope for a financial shot in the arm.

Friday 29 September 2017 was a watershed moment for capital raising in Australia.

The new crowd-sourced funding regime in Australia, which started on Friday, will:

• expand the investment universe;
• change the way small and medium-sized businesses raise capital and interact with investors; and
• make it easier for Australians to start great businesses, or get involved in them.

Birchal was launched as a spin-off platform of Pozible last month after a bill recently passed by the senate to allow unlisted public companies to seek up to $5 million in funds per year from so called ‘mum and dad investors’.

Birchal co-founer Alan Crabbe has confirmed that Sample Brew and recent Shark Tank participants Over the Moo and Sleeping Duck are among the first group of small businesses to trial equity crowdfunding in Australia.

The platform enables unlisted public companies with annual turnover and gross assets up to $25 million to issue shares to the public, opening up new opportunities for ‘mum and dad’ investors to take equity in small businesses. Investors are limited to no more than $10,000 investment per company each year.

Crabbe says the platform will provide a much-needed shot in the arm for small businesses looking to achieve that next level of growth.

“Unlike other equity platforms, Birchal provides a company profile and pitch service to help businesses growth their stakeholder community, whether they’re ready for funding or are considering it in the future”, Birchal’s co-founder Alan Crabbe says.

“Birchal also enables potential investors and existing investors to stay up-to-date with all company news and traction and be alerted to capital raises.”

Sleeping Duck

Sleeping Duck co-founder Selvam Sinnappan has confirmed he’s actively pursuing external investment from a number of sources for the first time since the company launched in January 2014.

Funds raised on Birchal will be channelled into marketing and also the next stage of product evolution, Sinnappan reveals.

“We’re open to all options for funding, including equity crowdfunding right now. From what we’ve seen of Birchal so far, we do think it’s got quite a bit of promise for small businesses like ours,” he says.

“Our concept has been validated. We’ve proven that there’s strong product-market fit and we’re now focused on scaling the business. We believe that equity crowdfunding and external investment will turbo charge our growth for us.”

Despite a hunger for funding, Sleeping Duck knocked back a deal on Shark Tank in recent weeks. Internet entrepreneur Steve Baxter offered the pair $500,000 for 15 per cent of their online mattress business, but the pair weren’t willing to part with that much equity, walking away empty handed.

Sinnappan initially asked for $500,000 for 5 per cent of the business, giving it a valuation of $10 million.

However, prime time television exposure had a positive impact on sales and traffic, bringing eyeballs to the Sleeping Duck platform. “Sales nearly doubled in the weeks after the episode aired and continue to rise,” Sinnappan says.

Over The Moo

Dairy-free ice cream brand Over the Moo also hopes that equity crowdfunding could also fund growth toward achieving a national footprint.

Despite achieving strong growth since its inception two years ago, founder Alex Houseman admits the company is now running into cash flow issues, hampering the potential for growth.

“Small business operators can’t do it alone. We need investors and passionate support from our fans to be able to get our products into new outlets right across the country and get over the next growth hump standing in our way right now.”

Over the Moo is available in 1,000 outlets across the country. “With the right financial support, we could double that within a year.”

During the 2015/16 year, Over The Moo sold 230,000 tubs and this year projections for the financial year are 650,000. Revenue grew to $1.2 million last financial year.

Birchal applied to the Australian Securities and Investment Commission (ASIC) for the newly created crowdfunding service license on the 29th September, and hopes to be operational with live offers later in 2017.

To check out the brands already using Birchal click here.

Investors, for more information email: investors@birchal.com

Companies, for more information email: company@birchal.com