An overview of the Australian investor funding landscape and options.
Who are my investors?
There are various categories of investors.
These people are defined by law in Australia but as a rule of thumb they invest more than $500,000 in any one opportunity. These can be individuals, family offices, superannuation funds including self-managed superannuation funds, institutional investors and the like. Watch the program ‘Shark Tank’ for a great representation of sophisticated investors, their approach and thinking.
– One or two of these investors can fund into the $millions.
– Often provide value outside funding such as mentoring and guidance.
– Liberal regulations regarding marketing and advertising to these investors .
– Valuation sensitive particularly with pre-revenue new starts.
– Often won’t invest in early start-up businesses.
Everyone else. Affectionately referred to as ‘mums and dads.’ These investors invest at lower amounts – in theory up to $500,000 but in reality typically under $100,000. Angel Investor is a common term used and in fact can be either type of investor.
There are very strict regulatory guidelines in Australia that dictate when, how and if you can market to retail investors so always seek professional guidance.
Also retail investors but worth of its own heading. Crowd Funding platforms have been established in Australia in recent years and provide a compliant framework within which to market to retail investors. These investments can be bit size up to low $’000s.
– Suited to funding an early round of capital requirements.
– Generally not focused on valuation.
– Can leverage the strength of social media (Crowd Funding only).
– Highly regulated activity with potential fines and criminal conviction where regulations are contravened.
This is the focus of our Investor Marketing & Communications Strategy service.
The answer is not dissimilar from what it would be regarding any product or service. Investors are typically everyday people who make investments based on the value they ascribe to the investment. Much in the way most people make any purchasing decision. The principals align with general marketing practices.
Our tagline is Compliance meets Creativity. The following explains the two step approach.
Step 1 – Compliance
This step is about preparation. What is the investment strategy? Who are your potential investors? Who can I legally approach? How much of the business do I offer them? We help determine your legal options and the pathway that best fits your particular circumstances.
What do I show investors? Following on, we will help prepare a compelling investor offer and supporting investor collateral; information memorandum, pitch decks, investor briefs, etc. These are used at various stages of the marketing campaign and sales cycle.
Step 2 – Creativity
This step involves marketing to investors. Identify the target investors and what makes you unique to them– Identify the marketing activities to reach investors– Execute marketing activities – Measure results.
These days marketing requires specialists who are current on all the rapidly evolving marketing practices. That is why we have engaged leading edge marketing specialists who understand the investor funding market and best practice marketing.
This is this is the ‘Creativity’ step in our tagline – Compliance meets Creativity.
If you’re thinking about investor funding, we’d love to talk to you and provide some general guidance. We are always excited to hear about aspiring new business ventures and will happily share our knowledge. Use the Quick Contact form or give us a call.