Crowd-Sourced Funding (CSF) is a fantastic new way for companies to pursue alternative funding for their business. It allows for businesses to advertise and raise capital for their enterprise through a licensed intermediary (like Birchal) and build a base of brand ambassadors to help them achieve their next phase of growth.
Since the first licenses were granted in January 2018 to be able to conduct CSF raises in Australia, we've hosted 35 successful capital raises and raised $20 million dollars for Australian Companies (at Jan 2020).
How is Birchal Different?
Our philosophy is that Equity / CSF crowdfunding is the perfect funding pathway for companies with a strong consumer proposition - we consider this our niche - as the Birchal team has a mixed combination of commercial, communications and promotional backgrounds that helps augment the efforts of companies we support.
Simply put, CSF is well suited to strong brands that are close with their customers and are already regular communicators with their audience. A CSF raise doesn't simply generate funds for businesses, but builds brands further and helps to establish communities of long-term brand advocates.
When to do a CSF Round?
We often say that to run the most effective and efficient CSF campaign, companies should ideally be past a family and friends round and seeking pre-seed or seed funding. However, there are exceptions where companies at a more developed stage choose to undertake a CSF raise if it aligns more closely with their brand than traditional funding avenues.
As the average raise across the Australian CSF industry sits at about $600,000, we see a large amount of raises between $300,000-$600,000 but our platform is also designed to facilitate raises of over $1 million (we've done 5 to date) and even up to $3 million and beyond (our Shebah Rideshare Campaign, the largest CSF raise in Australia so far, raised $3 million). The limit for CSF raises in Australia currently is $5 million per company per 12 months.
It's also important to consider that you will need to provide a company constitution, subscription agreement and an offer document as part of your raise that will include information about your business model, strategy, the market you operate in, and financial performance (typically your most recently completed financial year). For companies that are just starting up, you may not yet have these frameworks in place - this simply means that equity crowdfunding might be an avenue to explore further down the track.
I think I'm a good fit...what next?
If you feel we 'get you' could be a fit for what your company is trying to achieve - or you'd like to learn more - please submit our eligibility form so we can get in touch.
Maybe this isn't for me... where to now?
If you're still keen on the idea of crowdfunding to grow a customer base and launch your product to market, check out our sister platform, the rewards-based Pozible.com. This is a perfect place to get pre-sales or to launch your product to market!