Why Assob For Capital Raising?

By Author: Kate Ingham
Total Articles: 162
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Early stage capital is what so many innovative companies require, however, it is the hardest to attract when raising capital in Australia.

Angels and Venture Capital, often want to see the company showing the potential to generate profit, to have unique patent protection and the technologies can be described as “break-through”.

With many companies falling outside this criteria, but still offering excellent growth potential, it is for this reason our company has chosen the Australian Small Scale Offerings Board (ASSOB) path for many of our clients when raising capital in Australia.

ASSOB’s capital raising service provides a “peer to peer” platform that connects companies looking to raise equity capital and investors. With over 18,000 subscribers who receive ASSOB’s monthly communication about investment opportunities, we often find business opportunities, links to other service providers as well as investors, who engage with our client companies. Building these links is essential for early stage companies.

How does ASSOB work?

The ASSOB sponsor creates an appropriate share ...
... capital structure for the company and writes a class order compliant offer document based on the company’s business plan and other information submitted by the issuer. Then as a team, the issuer and the sponsor, market the offer through a well structured and proven campaign methodology.

- Features that make the marketing of the offer effective include:
- breaking up the offer into rounds with escalating share prices between the rounds,
- the ability to create impending events such as a listing date,
- ability to offer a discount to networks of the issuers prior to a listing,
- prospectus-quality offer documents,
- validation achieved by having an external sponsor (corporate advisor) that is approachable & responsive to investors,
- social proof and transparency provided by the ASSOB listing of the offer,
- collaterals including a company video on the issuer page and regular communication with current and potential investors
- 18,000 subscribers on the ASSOB platform receiving monthly issuer updates along with the further 1000 on the Alchemy list.

Compliance features that increase investor confidence and differentiate an ASSOB-style capital raising from a private offer include:

- the requirement that the issuer be a public unlisted company,
- that the company use a corporate advisor to sponsor the listing of the offer,
- vetting of the company directors through the ASSOB application process,
- the use of a third party trustee with offer minimum subscription amounts and cooling off periods,
- review and approval of the offer document by the ASSOB listing committee at final draft stage,
- prospectus quality offer documents with the appropriate legal disclaimers and statements,
- professionally prepared share applications and share certificates,
- presentation of audited accounts at an annual general meeting of shareholders and compliance with ASSOB listing rules such - as regular communications with investors which include a quarterly solvency statement.

All of these elements give an investor confidence in the matter and the equity capital raising process.

ASSOB’s platform is compliant, affordable and effective. It has operated in its current form for over 6 years with a high level of transparency, consistency and rigour, making it a useful alternative to emerging high growth companies without the cost and ongoing administrative burden of a listing on an exchange.

Capital raising services remain cost effective through delivering results via the ASSOB platform.

Kate Ingham is the Managing Director of Alchemy Equities, a boutique corporate advisory firm which provides capital raising services to growth businesses in Australia.For more information on capital raising australia please visit: http://alchemyequities.com.au/