What is Equity

All businesses need capital

Capital is the blood of business truth is that the money you spend some -. And to implement it you have it. Without capital you can not buy the equipment you need, hire the company / store / office or you need to hire the people needed to help you do everything you do. New Capital underwrites innovations and take up new technologies and develop new ideas.

It is commonly believed that the lack of capital is one of the main reasons for small business failure in Australia, but access to capital has always been difficult for small and medium enterprises (SMEs), a limiting factor for their growth.

What is capital?

capital is money, time and other assets that contribute to business owners. General business founders put in what they can, they borrow against personal property and are working very hard to build a business over a long period of reinvestment of profit as they go. The idea of bringing others into the business to provide a stronger asset base (more money) is the majority.

a large percentage of Australian companies are set up under the advice of accountants and lawyers to save taxes and protect assets, but the issue of share ownership and management division is rarely discussed.

use share issues and management (capital) is an important business strategy for growth that is understood and used by a listed company. Most thought it was out of MSA, but that's not it is a powerful tool that can provide significant benefits for small and medium enterprises, as well as -. If you get the right advice and the process is managed properly

Why raise equity capital?

Your company has the potential for growth?

What can you do with another $ 500K? What is $ 1 or $ 2million? Would that give your business the ability to get to the next level? Would it be enough to double the business? Maybe more than that? If this is a possibility, you should be thinking about how to bring new investors can help to make it happen. You may be able to develop a new product, the ability to add production lines, to open more stores, expand interstate or overseas, and build a prototype of you thought about it.

capital is not repaid, requires the provision of security (except shares issued) and bears no interest. In essence, the company could print its own currency by issuing shares is not unlike the way Barack Obama and Kevin Rudd printing money. In one sense you can even think of it as the other product lines that you create and sell.

where you get it?

early stage financing is a "relationship" with the seat and usually comes from family, friends, relatives or clients and / or supplier who want the company to their relationship with the issuing company.

Even among these groups has traditionally been difficult to attract investors as there is little or no liquidity, the returns are uncertain and there is often little transparency in how the business is operated.

well-structured offer, however, can address all these issues and provide potential investors with proven capital gains, the planned exit strategy, the company regularly reporting and communications. Couple this with the secondary market platform, and many obstacles to finding investors away.

Corporations Act limits

It is unlawful for any person (or company) to ask people to invest in joint business venture, property or other investment without following the fundraising rules has been reduced for the companies Act 2001, or used without exemptive relief as it provides an independent ASSOB sponsors.