Last week my startup Pelikin launched an equity crowdfunding with Birchal.
Since we went live at 11am last Wednesday, I’ve had friends, family, friends of friends, friends of family, interested Aussies and even a young gentleman on the 48 tram who caught a glimpse of my Pelikin tee approaching me wanting to know more about equity crowdfunding and how it works.
At Pelikin we’re pumped to get as many people involved in our journey as we can. We want our users to be as invested in our product and vision as we are and so what better way to do that than to let them own a piece of Pelikin . Although we’ve had an amazing response in the first 3–4 days of our campaign there still seems to be some murky-ness about CSF and how it works.
Here’s my my cheat sheet for those who are little unsure about the whole process…
CSF in a nutshell
Crowd Sourced Funding is a new investment initiative that enables a group of investors (aka the crowd) to supply funding to a Company in return for equity (ownership).
The maximum investment amount by any one person in any one company is $10,000 per year. The minimum is up to the company doing the raise — in our case we’re allowing Australian residents to invest as little as $100 in Pelikin.
Although crowdfunding can deal in small sums of money, it is still as risky as any other form of investment. You should do your research, on the company, the market and consider the resources available to you before making an investment. You’ll be provided with an Offer Document which provides a detailed insight in the company, read it carefully!
It all begins with an Expression of Interest (EOI) period — this is what we’ve just started at Pelikin and it’s basically a 3–4 week window that allows Aussies that are interested in our company to, as the name says, express their personal interest in making an investment into the company.
There is no obligation to part with any money at this point, nothing is binding you’re simply just showing interest.
The main purpose behind an EOI campaign is for the company to get a feel for the investment appetite the Australian public towards their product. Once the EOI has wrapped up, they take a step back, look at the data and then make a decision to either proceed with their raise or hold off for a bit.
So the company has thought long and hard about their EOI results and decided to go forward with their raise — what happens now? Well it’s pretty simple…
The crowdfunding platform (in our case the amazing Birchal) will send out payment instructions to people that have completed an EOI but investment is not limited to EOI registrants, anyone can now invest directly in the company.
Once an investment is made, a cooling off period of 5 business days kicks-off which allows the investor to change their mind at any time and have their investment returned.
After a successful raise, the company now has some extra working capital and a whole heap of new and diverse shareholders. What’s critical for Pelikin is the latter, the idea of getting as many Australians involved in what we’re building (for them!) is really exciting and motivates our team everyday to keep hustling, keep learning and keep building.
Expressions of interest for our equity crowdfunding launch are currently live so head over to our Birchal Profile if you want to get involved in the making of your banking alternative.
If you’ve got any questions about ECF or Pelikin then my door is always open so you can reach out on 0422 614 665 or email@example.com.
* Always consider the offer document and the general CSF risk warning before investing.
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