Jack Quigley

Australia’s newest equity crowdfunding platform, Sharequity, is planning to work with the corporate fundraising sector rather than compete with it as the first companies get ready to raise capital through the crowd in Australia.

Founded by former GMP Securities Chief Operating Officer, Asia Pacific, Geoff Reilly and backed by leading crowdfunding figure Jack Quigley, Sharequity already has several  companies ready to raise capital by traditional routes, and then through equity crowdfunding when it’s license is approved.

Sharequity, which will also feature other complimentary products, has also already signed a partnership with share registry business Automic and expects to do deals with more corporate advisors, brokers and other traditional fundraising players.

Mr Reilly said the deal is emblematic of the different approach Sharequity is bringing to the sector.

“The new legislation is obviously a big deal for us and the capital raising industry,” said Mr Reilly. “There’s a large number of retail investors that have seen the opportunities available in equity crowdfunding in places like the UK and the US. They want exposure to these investment opportunities and to get in on the act here, right now.”

“But this is part of a broader trend of technology enabling self-directed investors to take greater charge of their investment making decisions. So while it might seem we’re just getting in on the act, we’ve been planning Sharequity based on trends that go well beyond the introduction of equity crowdfunding in Australia.”

Crowdfunding leader Quigley backs new play

Sharequity shareholder and Non-executive Director Jack Quigley is a leading voice of the Australian  crowdfunding industry as managing director of CrowdfundUP and founding director of FinTech Australia. He’s also a member of ASIC’s Digital Finance Advisory Committee.

“At the start of a new market, there’s always a mad dash for market share, while people wait for the value-add later,” said Mr Quigley. “As a Sharequity director, this platform has its eyes on the horizon. The important thing for any platform is to ask itself what is this market going to look like in five years’ time?”

“I believe that the crowdfunding market in Australia will be strongly interconnected with the broader fundraising industry both on the seller’s side and the buyer’s side. Equity crowdfunding is a gamechanger across multiple verticals, but make no mistake it won’t exist in a vacuum.”

Also amongst Sharequity’s major shareholders are Peter Wall, a partner at corporate law firm Steinepreis Paganin. He will serve as Sharequity’s first chairman. Dan Fraser of Ironside Capital is also a major shareholder.

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“Crowd-sourced equity funding has been extended to proprietary companies in an important step that is the cumulative result of extensive industry consultation with both government and regulatory stakeholders. This evolved legislation improves upon the earlier public framework for equity crowdfunding and is a significant milestone for both small businesses and start-ups in Australia.”

“From 29 September, platforms like Equitise can get their application to ASIC in for an AFSL and we can look at getting our licence as soon as physically possible. It means equity crowdfunding platforms (intermediaries) can operate in Australia and apply to get an AFSL under the new legislation.”

Igniteme Co-founder and Director Kristjan Geering said “it’s a big part of a government’s brief to sort out competing public interests. I think they did a pretty good job here balancing investor protection with the economic benefit this type of fund raising will bring. The government has elected to impose some heavy duty compliance obligations on us (the platforms) and those seeking funds and fair enough too, if you want to ask the public at large for money.”

Compliance and regulatory obligations

“In terms of compliance, ASIC has provided us with a template – a simplified version of the traditional prospectus – which is great for giving intermediaries like Equitise more knowledge of the format, structure and key areas that we need to focus on to meet our regulatory obligations,” Wilkinson said.

“An offer needs to be made using a set disclosure process. On licensed platforms, a company can raise up to $5 million and individual retail investors can invest up to a total of $10,000 in any particular company within any 12 month period.”

What it means for investors?

Sharequity chief executive Geoff Reilly said “if the overseas experience has taught us anything, it’s that retail investors will get more opportunity to get in on the ground floor. I think the government has struck the right balance between protecting investors and enabling the companies. You can never protect investors 100%, which is why the $10,000 limit is entirely appropriate. It’ll be interesting to see what impact it has on investor education. Fintech are obviously front and centre and I’d expect some attention for anyone with exposure to mining. Property tech companies could also get some attention, given Australia’s property obsession. But Australian retails investors are a lot more creative than they’re given credit for. So people should watch for surprises.”

Equitise co-founder and director Jonny Wilkinson said the announcement was important for retail investors because Australians can now invest in small private companies and get exposure to the venture capital investment space which they have not been able to reach until now.

“This is a new asset class that everyday investors haven’t been able to previously access,” Wilkinson said. “It’s a great way for businesses to go out to their networks and be supported by the people who know the business.”

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