What is Equity Crowd Funding?

 

Equity crowdfunding is a way of raising money from many individuals in return for shares in your company via our Swarmer Platform.

Equity crowdfunding is an opportunity to finance your future growth vision, through the support of a greater volume of shareholders compared to traditional sources such as banks, venture capital firms, and angel investors.

Get Started

• What type of Companies raise capital via Equity Crowdfunding on Swarmer? 

  The Equity Crowdfunding regime aims to facilitate flexible and low-cost access to capital for small to medium sized Companies by reducing the regulatory requirements for raising capital.  Under this regime, unlisted public Companies and private Companies with less than $25 million in assets and annual revenue can make offers of ordinary shares to retail clients, through an Australian Financial Services (AFS) licensed intermediary’s platform, using an Equity Crowdfunding offer document. Eligible Companies can raise up to $5 million in any 12 month period under the regime. See our Raise Capital, How it Works page if you want to find out more.   

  Swarmer expects that companies which are innovative, and which have expansion plans, and where existing shareholders do not have the means or inclination to provide additional share capital, will be the most suitable companies which will wish to use Swarmer's services. 

• How do I sign up to raise capital?
  Sign up as a member of Swarmer after which you can request to Raise Capital under the Raise Capital section of the website. You will need to provide certain information about your Company when registering and submit the application to Swarmer for approval. Swarmer will contact you and assign a Lead Advisor to take you through the Swarmer process. 

Eligiblility

• Is my company eligible to raise equity with Swarmer?

  To be eligible to raise capital this way you need to be:

  • An unlisted public company and proprietary company (excluding investment companies)
  • Have less than $25 million in consolidated assets and annual revenue
  • Have your principal place of business and a majority of directors in Australia

   

   

  If you meet these criteria and would like to know if Equity Crowd Funding is right for you, then please get in touch here.

About Equity Crowdfunding

• What is Equity Crowdfunding?
  Equity crowdfunding is a way of raising money from many individuals in return for shares in your company via our Swarmer Platform. Equity crowdfunding is an opportunity to finance your future growth vision, through the support of a greater volume of shareholders compared to traditional sources such as banks, venture capital firms, and angel investors.
• Is Equity Crowdfunding legal in Australia?
  Yes, but only if one has the appropriate licences. In Australia you require an Australian Financial Services Licence to provide a Crowd-Sourced Funding Service granted by the Australian Securities and Investments Commission (ASIC).  Swarmer has this licence.
• How long has Equity Crowdfunding been around?
  While Equity Crowdfunding is well established in overseas markets (eg. US, UK, China), it is relatively new in Australia.   In recognition of the importance of helping small Companies obtain funding and assisting every adult Australian to easily invest in unlisted Companies, Federal Parliament passed the Crowd-sourced Funding Act in 2017.

About Swarmer

• Is Swarmer licensed and regulated?
  Yes. In Australia, Swarmer holds an Australian Financial Services Licence (AFSL 507867) issued ASIC and is a member of the Australian Financial Complaints Authority.
• Who is Swarmer?
  Swarmer is one of Australia’s latest equity crowd-sourced funding (CSF) platforms. We help founders wanting to raise equity funds to secure capital to grow their businesses . Our platform provides access to a wide range of potential investors, from everyday investors to high worth members. All are ready to invest in your business and become shareholders on your growth journey.
• Why Choose Swarmer?
  Swarmer is built on human relationships and connection. We strive to ensure companies who raise on our platform are nurtured through the process. Our experienced Team have a wealth of experience and connections they will bring to you and your raise.

Getting Raise Ready

• What is the minimum and maximum investment a company can ask for under Equity Crowdfunding?

  Under Australian Crowd-Sourced Funding (CSF) regulations, a company can raise up to $5 million in any 12-month period.

  There is no legislated minimum raise amount. However, a minimum target is set prior to launch and agreed with the founders based on:

  • Funding requirements
  • Campaign viability
  • The presence of cornerstone investors
  • Demand signals from the Expressions of Interest (EOI) phase
• What type of due diligence is completed?

  When lodging your request to raise capital you should complete the relevant information requested for your company.

  The investigations which Swarmer staff carry out on each such potential Company and its directors, officers, senior managers and shareholders (being major shareholders who own 25% or more of the equity in the relevant Company) will consist of (but is not limited to) the following:

  • A review of ASIC registers to ascertain any relevant information on the Company, its directors, officers, senior managers and shareholders.
  • Conducting Know Your Customer (KYC) checks on the Company and each relevant individual and shareholder.
  • Internet searches to determine whether any sanctions relate to the Company or relevant individuals and shareholders of the Company.
  • Bankruptcy checks on directors, officers, senior managers and shareholders.
  • Checking internal records of Swarmer to ascertain any previous involvement with Swarmer, including any prior capital raising.
  • Internet searches for evidence of any insolvency or criminal proceedings affecting the CSF Company or any of its directors, officers, senior managers and shareholders.
• What is pre-money and post-money valuations?
  If a company is worth $1,000,000 before raising capital through Swarmer (i.e. “pre‑money”) and investors invest share capital of $250,000, the new (“post‑money”) valuation of the company will be $1,250,000.  The investors will now own 20% of the shares in the company.
• How do I value my company?
  A suitably skilled and experienced person should be engaged to value your company prior to seeking money from investors. Swarmer can help you find a suitable valuer.
• What happens when my company has raised the funds requested?
  We will go through the documentation phase with you, your company and your investors.  Funds from investors will be held in a trust account with a Bank in Australia for companies until such time as all conditions required by the documentation have been met.  Once the conditions have been met shares will be issued to the investors in your company and the investor funds will be transferred to your nominated account. 

The Capital Raise

• How does a raise work?

  Before doing a fund-raise, it’s important to gauge interest from the Investor Community by running an ‘Expression of Interest’ (EOI) campaign. This is a marketing campaign that will help determine the level of interest for investment in your company. It also allows us to capture details of potential investors for you. Our expert marketing partners will help you position your business and get the best possible interest for your raise.

  It's also important here that you harness your own network of suppliers, customers, retailers, influencers, friends and family into this process. Their commitment to investing in your business will help build momentum once you take the offer to the general public.

• What is the maximum timeframe during which a company can raise capital?
  The maximum timeframe we are setting is 90 days from launch date, although Swarmer reserves the right to extend that period should that be appropriate. Typically, companies set a timeframe of between 30 and 60 days.
• Can you raise more than the original amount you intended to raise?
  You can set a minimum and maximum amount you want to raise. Once you have reached your maximum target you cannot raise any further capital in this round.
• Can I also launch my company’s request for capital on another crowdfunding website?
  No.
• What type of equity can my company offer?
  In Australia, the only equity that can be offered by law through Crowd-Sourced funding is in the form of ordinary shares. 
• What is the minimum/ maximum investment from an individual?
  The minimum and maximum investment from an individual is stipulated by your Company  
• What is the maximum number of investors I can offer equity to?
  Our platform allows the company to stipulate the maximum number of investors when raising capital.
• What happens if I don’t reach the investment amount the company is seeking?
  For companies which do not meet their minimum capital target no funds will be provided and your business will not receive any investment. All funds committed from investors will be returned to them.

Fees

• What are the fees?

  Our fees consist of:

  • An upfront fee of $4,000 (exclusive of GST)
  • 6.25% (exclusive of GST) of the total amount raised and collected through a successful campaign, where the Offer is closed and successful
• What happens if I don't proceed with a Raise?
  If for whatever reason the raise doesn’t happen, then any costs incurred up to that point by Swamer, or the partner supplier will be charged to the Founder.

Receiving Capital

• What happens when my company has raised the funds requested?
  Once reaching the maximum target set by the company no further investments can be made. You will then issue shares to the investors and for the funds will be released from the Swarmer trust account and paid to the Founder company.
• When are Funds Received?
  After the Cooling Off period (which is 5 Business Days after the Raise period ends) it typically takes about 7 days to transfer the capital raised to the company.
• From Start to End how long does the whole process take?
  It does depend on the readiness of the company going to raise. Minimum time frame would by 8 weeks start to end, and the maximum time is about 16 weeks.