Investing 

Entrepreneurs 

Stefan Zurflueh

<p>The fund will co-invest with the Stride Equity digital investment platform, and will unlock many of the benefits associated with our community of investors and founders.</p><p>Why would you do that in this environment, you might ask?</p><p style="text-align: start">In the face of a challenging macroeconomic backdrop and recent upheavals in the venture capital landscape, the decision to launch a venture fund and invest in growth companies might seem counterintuitive to some. However, upon closer examination of the prevailing market dynamics, it becomes evident that now is perhaps one of the most opportune moments in recent history to embark on this. Let's delve deeper into three key areas where significant shifts are occurring, each presenting exciting opportunities for investment:</p><h3><strong>1. Change in consumer and investment behaviour</strong></h3><p style="text-align: start">The emergence of the digital native generation, exemplified by Gen Z, marks a profound shift in consumer and investor behaviour and preferences. As highlighted in various studies and reports, including the 2020 First Insight Report and the 2023 Cigna Survey, Gen Z constitutes the largest demographic cohort globally, commanding substantial spending power. Notably, their spending power has seen a staggering 36% compound annual growth rate, reaching $360 billion, up from $143 billion just four years ago. These statistics underscore the immense potential for startups to tap into this demographic's unique preferences and values, which are increasingly shaped by their experiences in a cyber-infused world. Gen Z investors rely on their community to find investment opportunities and make investment decisions on information available on their trusted platforms. Digital investment platforms with strong communities are the obvious source for investments for this new, powerful investor generation.</p><p style="text-align: start">Other specific trends such as the migration to self-directed, flexible online work further highlight the evolving landscape that startups can capitalize on. By aligning their offerings with these shifting behaviours, startups stand poised to capture significant market share and drive innovation across various sectors.</p><h3><strong>2. Rapid change in technology and rate of adaptation</strong></h3><p style="text-align: start">While mobile and cloud technologies have dominated startup growth over the past decade, the emergence of new technological paradigms such as artificial intelligence (AI) and mixed reality heralds a new era of innovation. The exponential advancements in AI demonstrate its transformative potential across a myriad of applications. From surpassing human capabilities in image recognition to</p><p style="text-align: start">augmenting human creativity, AI presents unprecedented opportunities for startups to develop cutting-edge solutions that address pressing societal challenges.</p><p style="text-align: start">Beyond AI, the increasing adoption of mixed reality, such as Apple's Vision Pro, indicates a paradigm shift in digital experiences. As highlighted by industry experts like Tim Sweeney, the move towards fully immersive digital experiences is inevitable, opening up new avenues for startups to pioneer innovative products and services. By leveraging these emerging technologies, startups can differentiate themselves in the market and gain a competitive edge over incumbents relatively rapidly.</p><h3><strong>3. Availability of talent</strong></h3><p style="text-align: start">The recent market downturn, exacerbated by factors such as rising interest rates and reduced risk appetite, has led to the availability of talent within the tech sector. Startups that raised too much money too fast and over-hired are now facing the consequences, with flat or down rounds with mass lay-offs at even the largest tech companies. However, this availability of talent presents a unique opportunity for early-stage investing, as skilled professionals seek new avenues for innovation amidst the changing landscape.</p><p style="text-align: start">It is well documented that periods of economic uncertainty have historically served as a fertile ground for iconic startups, such as the emergence of companies like Google, Amazon, and Expedia during the tech crash. Similarly, the current market downturn, coupled with the convergence of consumer and investor behaviour as well as rapid technological evolution, sets the stage for a surge in high-quality early-stage investment opportunities. By identifying and nurturing promising startups during these tumultuous times, venture funds can position themselves for significant returns in the long term.</p><p style="text-align: start">The confluence of change in investor and consumer behaviour, technology advancements, and the availability of talent presents a compelling case for starting a venture fund and investing in growth companies. By leveraging the statistics and insights available across these areas, investors can navigate the current landscape with confidence and seize the abundant opportunities for innovation and growth.</p>

Right now at Stride we are in the middle of getting ready to raise capital for our first venture fund, Stride Lead.

Now is the time to start investing is high growth companies

<p>Founded by Nir Davidson, a serial entrepreneur and experienced property investor with a profound understanding of the property market's complexities, <a target="_blank" rel="noopener noreferrer nofollow" href="https://mymondus.com/">Mondus Capital</a> aims to assist 50,000 Australians in achieving home ownership. With a unique lending model that blends ambition with empathy, Mondus Capital not only seeks to address the financial barriers to buying a home but also to empower Australians to "Own Your Future” by lending up to 25% of the property purchase price for deposit and fees to qualified buyers in exchange for interest payments and a share in the value uplift of the properties.</p><p>This interview delves into the motivations, challenges, and aspirations behind this innovative venture, offering insights into how Mondus Capital will assist Australians in achieving their dream of owning a home.</p><h3><em>Who is Nir Davidson and what motivated you to found Mondus Capital Pty Ltd?</em></h3><p>I’m a father of two, a husband, and an entrepreneur at heart. The property market has always been one of my main interests, having been involved in it from every possible point of view: I’ve rented, owned, let, Airbnb’s, invested in, and sold properties for the last almost 30 years.</p><p>This means I’ve experienced not only the benefits but also every pain point the market has to offer, and in my experience, the biggest challenge there is to overcome in the property journey, is to be able to fund your first home.</p><p>I’ve spent years trying to identify a solution to this main obstacle for most Australians, and that’s how Mondus and the Own Your Future program were born.</p><p>When everything is said and done, I want to look back and say I’ve helped 50,000 Australians start their property journey - that will be a legacy to be proud of, fully knowing I’ve made a huge difference to my country and generations to come.</p><h3><em>What does the name Mondus signify?</em></h3><p>Mondus means “the world” in Latin, and the reason we chose it is the understanding that a house is not necessarily a home. A home is a special place, filled with happiness and love, where families grow, and share unforgettable moments. A home means the world for families who have such a place they can call home - and for those who don’t have the luck or luxury of being able to call a place a home, it would mean the world to them if there was a helping hand getting them closer to that dream. Mondus is that helping hand.</p><h3><em>Reflecting on your own home purchasing experiences, how did the challenges of securing a home influence Mondus’ journey and development?</em></h3><p>Massively. I come from a humble background having to start from scratch, without being able to lean on the bank of mum and dad, the giant gap between the average household income and the first big barrier to home ownership became ever so apparent: That first deposit for our first home was a mountain almost impossible to climb. So much so that it was sometimes easier to think about giving up than to try pushing forward, and I wouldn’t blame anyone for doing that when inflation, ever-growing interest rates, and property prices ongoing increase keep moving the finish line further and further away from you every year that goes by.</p><h3><em>What market opportunity did you and the team identify for Mondus, and why is now the optimal time for its launch?</em></h3><p>We are currently in the perfect storm for a product like the Own Your Future program to emerge: Property prices just went or are currently going through a small recession, which always acts as a springboard for prices to start going up, meaning the timing is right to start investing in the market, interest rates are the highest they’ve been since 2012, and the increased cost of living since COVID makes it ever increasingly difficult for first-time buyers to save the funds required for a 20% deposit on a property - even more, Australian inflation rate is currently the highest its been in the last 30 years, which means that any savings are likely to depreciate over time - it’s a battle very few people can win.</p><p>This is why Mondus and the Own Your Future program MUST exist.</p><h3><em>Who is the ideal customer and where can they find more information about Mondus or check their eligibility?</em></h3><p>Young professionals and families with a good credit score who are able to afford to service the mortgage but simply don’t have the savings to afford the initial 20% deposit.</p><p>For more information and to check your eligibility you can find a contact form either at the bottom of this page or on <a target="_blank" rel="noopener noreferrer nofollow" href="http://mymondus.com/#contactus">mymondus.com/#contactus</a></p><h3><em>Could you explain Mondus’ approach to home loans and how it diverges from traditional models?</em></h3><p>At Mondus, we redefine home loans as a partnership rather than a transaction. Unlike traditional banks, we accompany you every step of the way, sharing both the journey and the rewards. Our goal is to help as many people as possible, creating a win-win scenario for all involved.</p><h3><em>Some might argue that other teams already tackling similar market segments, why is Mondus’ team uniquely positioned to succeed?</em></h3><p>We embrace a different perspective on competition. We welcome more companies like us, as the market is vast and there's an abundance of people to assist. What sets us apart is our commitment to genuine partnership, not just a transaction. Our unique approach ensures we stand out in our mission to collectively help as many individuals as possible.</p><h3><em>Why did you choose Stride Equity as the platform for Mondus’ equity crowdfunding campaign?</em></h3><p>We were fortunate to have numerous companies express interest in partnering with us for <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/offer/mondus-capital-pty-ltd/175">our equity crowdfunding campaign/fund raising</a>. This allowed us the flexibility to carefully choose our collaborator. Upon meeting Stride Equity CEO Maria Halasz, I was thoroughly impressed. Her vision and leadership resonated with me, and I saw not just a business partnership but a long-term collaboration. Maria and her team are more than just financial partners; they bring immense value, connections, and inspiration to our business.</p><h3><em>What is your elevator pitch and how can investors get in touch with you?</em></h3><p>Mondus Capital is the straightforward solution to the pressing issue of housing affordability. With the daunting challenge Australians face in saving for a home deposit, we step in as the definitive answer. We not only provide the deposit but also assist in securing the primary loan for our clients. In return, clients service the loan, and we earn our fees along with a share in the property's growth profits. Much better solution then renting and trying to save for deposit.</p><p>Our approach is not just a financial transaction; it's a solution that must exist to make a tangible impact. We believe in making a difference, and we're inviting investors to join us on this transformative journey. Contact me directly at <a target="_blank" rel="noopener noreferrer nofollow" href="mailto:nir@mymondus.com">nir@mymondus.com</a> to explore this opportunity further. This is more than an investment; it's a chance to be part of something significant from the outset.</p><p><a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/offer/mondus-capital-pty-ltd/175"><strong>Visit the Offer page to learn more.</strong></a></p>

In an era where the dream of homeownership seems
increasingly unreachable for many Australians, Mondus Capital (Mondus) emerges
to assist aspiring home buyers in purchasing their dream home. 

Meet Mondus Capital

<p>Family and friends are often the first source of capital for a new business venture. Yet, taking money from close friends and relatives is fraught with complexities. As Joe Moore said, "before borrowing money from a friend, decide which one is more important".</p><p>Yet, handled properly, there is nothing more satisfying than involving those we love in our success. Accessing funding from the two Fs should be approached with respect, transparency and accountability, even more so than from arm's length investors.</p><p>Amongst companies we have seen at Stride recently I have been surprised by the number of those funded by their loved ones. Perhaps not so surprising that most of them got this first investment dangerously wrong.</p><p>Here are some of my tips to help you raise money from family and friends (the two Fs) with the objective of maintaining good relationships.</p><h4>Be honest and clear</h4><p>You have to clearly explain why you need the money and avoid fudging or relying on their 'love' for you. Treat them like any other investor and outline your plan for how you will use the money, how far it will take you and when they can expect a return. What rights will be assigned to the investment or loan, how much equity it might represent, if any, in the company and what happens when you have to raise additional funding.</p><p>If it is a loan, be very specific about the terms and conditions, interest, repayment schedule and timetable. If it is an investment, it is likely to be illiquid for some time, and they may not be able to get their money back for some years. This should be discussed upfront.</p><p>Sometimes, you might get pushback on discussing the terms upfront; your relatives may not want to appear as though they are in it for the money. So, you will have to explain that clarifying everything upfront is for the protection of both parties. Even more importantly, it is for the protection of the relationship.</p><h4>Respect their decision</h4><p>Many people believe that the best way to ruin a friendship is to bring money into it. You should not try to change their mind. People's finances are private, and they may not be in a position to support your venture even though they are not comfortable sharing this.</p><p>Even if your loved ones have the money, people have different risk tolerance, and a start-up venture may not be what they feel comfortable with. It is their money, their decision, and they do not owe you anything, not even an explanation. Respect their position, don’t take it personally and don't let financial matters strain your relationship.</p><h4>Have a written agreement</h4><p>Especially with family and friends, it is best to have a simple written agreement to prevent misunderstandings later. Memories can fail, and we tend to remember things differently.</p><p>Your agreement does not have to be prepared by a lawyer but should record the important terms. If the money is a gift, this should be recorded as much as if it is a loan or investment.</p><p>Other things you should include are the amount, rights associated with the investment, and interest (if any) if it is a loan. Any repayment and the frequency should also be added. Finally, don't forget to have it signed by both parties.</p><p>A word about legal advice. It can be daunting to know who to speak to, as not all lawyers are equal. Preferably, you want someone experienced in start-ups. You can connect with professionals specialising in start-ups to access suitable advice through start-up events at <a target="_blank" rel="noopener noreferrer nofollow" href="https://fishburners.org/">Fishburners </a>or <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.tankstreamlabs.com/">Tank Stream Labs</a>, where early-stage founder communities thrive.&nbsp;</p><h4>Show responsibility</h4><p>Whether you got the money out of love or friendship, your investors will be super impressed if you show them how you will spend it, how far it will take you in the venture and what you will achieve with it. Share as much information as you can without overselling the future and make your investor/lender feel like they are part of the story.</p><h4>Maintain regular communication</h4><p>This is, of course, true for all of your investors, not just family and friends, but it is especially important here.</p><p>Keep communication open and be available for an update anytime they contact you. More than anyone, they will be ready to celebrate your successes, and will no doubt be support to lean on when things don't go well.</p><p>Regular updates, outside of family interactions, will also make your early investors your advocates. They can share news about your products, your campaigns, media, or social media wins. Whether they will disclose their investment or not, they will champion your business amongst their social networks. Their endorsement can be a powerful tool in your social media strategy.</p><h4>Express gratitude</h4><p>When a friend or relative invests in your business or provides you with a loan to get started, they show respect and trust. They do it to assist you, and it is appropriate that you thank them. Again, no need to go overboard, but there is nothing wrong with showing gratitude and acknowledging how important their support might be.</p><h4>Be fastidious when complying with the terms of your agreement</h4><p>This is perhaps the most important part of the investment or lending relationship with friends and family. Make sure that you comply with the terms of your agreement and don't miss scheduled payments if you have borrowed.</p><p>Keep the lines of communication open in case there are any issues with the business that prevent you from complying with the terms. If so, provide alternatives and be always open to amending the terms to ensure that your investors' interests are looked after.</p><h4>Involve your early backers in celebrating your success</h4><p>We all strive to succeed in a game that takes many years to bring to fruition. Overnight success is rare, and it is easy to forget who cut the first cheque after 7-10 years in the business building wilderness.</p><p>When family and friends are the early backers, it's not just about the money. They invest in our dreams, and it is an expression of their respect and trust. When we celebrate our business success with them, we'll have the ultimate success in life; stronger personal relationships.</p><p>Author: <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.linkedin.com/in/mariahalasz/">Maria Halasz</a>, CEO <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/">Stride Equity</a></p>

What nobody tells you until it’s too late

How to get funding from the two Fs

<h2><strong>LifeBid</strong></h2><p style="text-align: justify">LifeBid was set up by Brett Wright and his team to address the issues faced by customers and industry players alike when it comes to life insurance advice and cover. Currently the industry is characterised by excessive regulation, disparate systems and complex documentation that makes it uneconomical to assist those most in need of life insurance advice and cover, leaving a trillion-dollar underinsurance gap.</p><p style="text-align: justify">Addressing these challenges requires an industry-level technological transformation beyond individual stakeholders' capabilities. LifeBid was set out to develop an end-to-end solution connecting industry participants, streamlining compliance, and reducing the cost of servicing clients by up to 90%.</p><h2><strong>Questions from the audience</strong></h2><h4><strong>What is the business model?</strong></h4><p>LifeBid is planning to generate revenue through a B2B software-as-a-service (SaaS) business model. During the webinar, Brett hasprovided indicative pricing, which will be further market tested before product launch. The monthly subscription costs will be charged based on the user type and the organisation's size.</p><p>Given the scalability of software products like LifeBid, profitability is expected to increase as the customer base grows over time.</p><h4><strong>Will there also be a mechanism for shopping underwriting around to different providers?</strong></h4><p style="text-align: justify">The team is building in pre-assessments into LifeBid to help advisers assess the available options based on the clients’ health, financial position, occupation etc.</p><h4><strong>Am I right that LifeBid is simply a CRM that will help produce an SoA?</strong></h4><p style="text-align: justify">No, LifeBid is building an end-to-end solution to help advisers manage life insurance referrals, new business process, renewals, reviews, and claims.</p><h4><strong>Will there be data feeds from Insurers?</strong></h4><p style="text-align: justify">Yes.</p><h4><strong>Will LifeBid compare only the insurance partners listed?</strong></h4><p style="text-align: justify">Comparisons will be based on the adviser’s research settings.</p><h4><strong>Will the SOAs and ROAs generated via this software be approved by AFSL providers?</strong></h4><p style="text-align: justify">This matter was tested with licensees and we have found that the licensees in the LifeBid working group have been happy with the SOAs and ROAs LifeBid is &nbsp;producing. Given the QAR recommendation is to move to a fit for purpose advice document, we are solving for this in our advice and ongoing service journey documentation.</p><h4><strong>How does LifeBid handle the non-standard/loadings /exclusions offers? Will it be built into the process? Also, is there any functionality to assist with the underwriting process - any automation or help with UHG or paramedical providers?</strong></h4><p style="text-align: justify">LifeBid is being built to handle non-standard offers, and integrations with paramedical providers are part of our product roadmap.</p><h4><strong>Does this integrate with XPLAN or Midwinter (or other popular CRMS), or does it require moving to this CRM?</strong></h4><p style="text-align: justify">LifeBid will have an open API to allow connectivity between other CRM's.</p><h4><strong>Does the software include the insurer commission processing and payment capability?</strong></h4><p style="text-align: justify">No, LifeBid is not trying to recreate commission processing systems, but we will have an open API to integrate with them for reporting and client segmenting.</p><h4><strong>Is this an alternative to existing solutions?</strong></h4><p style="text-align: justify">We are building LifeBid to be a single, end-to-end alternative to the many systems advisers currently use for life insurance advice and ongoing service.</p><h4><strong>Milestones and next steps</strong></h4><p style="text-align: justify">LifeBid has put together an <a target="_blank" rel="noopener noreferrer nofollow" href="https://lifebid.com.au/about/">Advisory Board</a> consisting of insurance advisers, licensees, and six out of nine life insurers. This board has played a critical role in designing and validating the platform, which has generated significant interest from the industry. The waitlist for LifeBid consists of 2,000 advisers awaiting the platforms launch, and this number continues to grow.</p><p style="text-align: justify">The LifeBid team predicts that it will take an additional six months of software development after the capital raising is completed before the platform is available to the life insurance industry. The majority of the capital will be used to hire additional software engineers and customer success staff required to finalise the platform on time and create a great onboarding experience for the advisers on their waitlist.</p><h4><strong>How does LifeBid plan to launch its product?</strong></h4><p style="text-align: justify">LifeBid plans to launch its platform in three stages. The pilot advice practices will be onboarded to the platform in the first stage. The second stage will see the waitlist, consisting of approximately 2,000 advisers, onboarded. Finally, in the third stage, LifeBid will open its platform to the entire industry, enabling all advisers to serve more clients. This strategic onboarding process ensures that LifeBid can continuously gather customer feedback, improve its capabilities and drive profitability.</p><p style="text-align: justify">Additionally, the working group participants have pledged to help with marketing, distribution, and onboarding of industry users, which is expected to speed up industry adoption.</p><p style="text-align: justify">LifeBid aims to integrate with other complementary industries such as mortgage broking, accounting, general insurance, estate planning, and more as the business grows and expands. These additional products and services will simplify the process for advisers to work with their professional referral partners.</p><h4><strong>How will LifeBid be using the money raised?</strong></h4><p>LifeBid is currently seeking funding between $1m and $2m, with strategic investors already investing $630,000, therefore we are seeking a minimum of $370,000 and a maximum of $1.37 million through this CSF offer, some of which has already been committed by the Stride Group.&nbsp;</p><p style="text-align: justify">The allocation of funds will depend on how much capital LifeBid can secure in total between the minimum and maximum amounts.</p><p style="text-align: justify">In all events, most of the funds will be allocated to finalising product development. If only minimum funding is secured, LifeBid will first focus on developing the renewals feature. If the maximum funding is secured, LifeBid will release the other modules based on customer needs and requirements.</p><p style="text-align: justify">Thanks to the commitment of LifeBid's working group in supporting the product launch only a smaller portion of the funding will be required for marketing and business development.</p><p style="text-align: justify">Once the capital raising is completed, LifeBid plans to hire additional talent to achieve its business goals. The company's primary focus will be hiring software engineers and customer success staff.</p><h2><strong>How you can become a shareholder of LifeBid</strong></h2><p style="text-align: justify">Brett and his team are crowdfunding because they want the advice community and Australians who benefit from their platform to be the owners, beneficiaries and driving force behind LifeBid.</p><p style="text-align: justify">Investing in LifeBid is as simple, just visit the Stride Equity platform from 19 September 2023 and follow the prompts.</p><p style="text-align: justify"><strong>Priority access to offer is provided for an exclusive four day period between 15th September and 18 September to those who have registered their inserts before that. If you are one of those, you should have received your email. If you haven’t received it, please contact us on </strong><a target="_blank" rel="noopener noreferrer nofollow" href="mailto:info@strideequity.com.au"><strong>info@strideequity.com.au</strong></a><strong>.</strong></p><p style="text-align: justify">Step by step instructions:</p><ol><li><p style="text-align: justify"><strong>Create an account</strong>. To invest in<strong> </strong>LifeBid<strong>,</strong> investors must create an account on the Stride Equity platform. Then, they can visit the LifeBid offer page and click on "Invest Now." It's important to read and acknowledge the CSF Risk Warning, Offer Document and Disclaimers before proceeding.</p></li><li><p style="text-align: justify"><strong>Verify identity</strong>. Investors must verify their identity. If investing through a company, self-managed superfund (SMSF), or trust, investors must follow the instructions accordingly and provide a signed PDF version of their trust deed.</p></li></ol><p style="text-align: justify">Investments over $10,000 will require an accountant's certificate. Investors must <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/wholesale"><strong>upload their certificates via the Stride Equity platform</strong></a> to confirm their sophisticated investor status. Trust deeds and accountant certificates will be reviewed as quickly as possible, but it may take up to 48 hours, depending on the level of interest.</p><ol start="3"><li><p style="text-align: justify"><strong>Complete subscription form and transfer funds</strong>. Once the ID, investment vehicle, and wholesale investor status (if applicable) are reviewed and approved, investors can finalise their investments.</p></li></ol><p style="text-align: justify">Stride Equity allows investors to transfer funds via bank transfer or direct debit for payments. It's essential that investors ensure that the nominated account has sufficient funds to avoid missing out on the co-investment opportunity due to insufficient funds.</p><p style="text-align: justify">Applications for investment will be accepted on a 'first come, first serve' basis. Once the allocation is filled, Stride Equity will be unable to accept additional applications.</p><p style="text-align: justify">If investors have any questions, they can <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/contact"><strong>contact us</strong></a> or refer to the <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/faq"><strong>FAQs section</strong></a> on the website.</p><p style="text-align: justify">The LifeBid's investor <a target="_blank" rel="noopener noreferrer nofollow" href="https://youtu.be/jY20rtOx29E"><strong>webinar recording can be accessed here</strong></a>.</p>

More than 150 potential investors attended LifeBid's investor
webinar to learn more about the company, its product, its funding, and growth objectives. 

Answers to questions from the
LifeBid webinar

<p>You have to be prepared to pursue different options and select the one that suits your type of business and your goals. </p><p>If you are about to embark on a capital raising mission and you are considering equity crowdfunding, I’ve compiled below five of the most effective ways to prepare your company for the best crowdfunding campaign possible.</p><ol><li><p><strong>Clarify your business and capital-raising objectives</strong><br>Ask yourself what you want to achieve with your campaign besides raising capital. Acquire new customers? Increase brand awareness and reach? Tap into the expert knowledge base of angels, VCs, or other investors? Clarify your goals before you start.</p><p>Build your business plan with sensible milestones; how much money do you need to raise and how far is this going to get your business? What will be your next value inflection point and how much do you need to get there?<br>Do you have the marketing and PR capabilities to run your campaign? Do you have the funding to hire support? Knowing when to outsource – and who to – can save you precious time and resources when it matters most.<br>Does a crowdfunding campaign support your long-term business goals? If more customers (as opposed to just more investors) is high on your agenda, crowdfunding is a great option to consider.</p></li><li><p><strong>Find the right crowd-sourced funding platform</strong><br>Different equity crowdfunding platforms have different characteristics; some focused on direct-to-consumer businesses, some collect smaller individual investments others focus on wholesale investors. Some platform managers provide extensive pre and post-capital raising support, others don’t. Identify what you need for your business and choose a platform that caters to your specific needs by talking to the different equity crowdfunding platform managers.</p></li><li><p><strong>Do your research on what works and the requirements, including time and resources</strong><br>Review campaigns of companies similar to your own; same industry, size of capital raising or customer profile. How did their campaigns perform? What worked for them and what didn’t? Take time to assess what will be required, how much time needed to spend on marketing, and respond to investors’ questions.<br><br>If you’re gravitating to a specific platform, gain some insight into the demographics and behaviour of its user base (specifically investors). Understanding your potential backers can help you tailor your campaign and communication strategies to most effectively engage with them.</p></li><li><p><strong>Communicate with your stakeholder base to ensure they will continue to back you and will support your fundraising campaign</strong><br>If you have existing backers or other important stakeholders, such as investors, suppliers and customers, communicate with them regularly and clearly about what you are doing, why and how this will benefit their interests. Approaching them with confident transparency and focus are likely to encourage them to support you. Preparing a clear pitch deck outlining these details will help existing investors in providing you their support.<br>Importantly, you should show how a crowdfunding campaign will align with your company’s growth plans, how it might enhance the value of their investment, and how it could provide opportunities for further market validation or expansion.</p></li><li><p><strong>Be prepared, get ready</strong><br>Ideally, in any capital raising, your business is in top shape at the time of seeking funding. Your revenue/profit should be maximised, your team dedicated and complete, and you should demonstrate plenty of opportunities for growth. Your board and management, your team, as well as your advisors must be fully aligned and on board with your campaign.</p></li></ol><p style="text-align: start">Once all of these are done, it’s time to start building momentum across your networks and on your favoured social platform/s. This is the time to bring in your experienced marketing team and fully engage with your crowdfunding platform managers to ensure that you maximise your company’s exposure. And finally, enjoy the ride!</p><p>Author: <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.linkedin.com/in/mariahalasz/">Maria Halasz</a>, CEO <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/">Stride Equity</a></p><p style="text-align: start">Published by <a target="_blank" rel="noopener noreferrer nofollow" href="https://insidesmallbusiness.com.au/finance/funding/how-to-prepare-your-company-for-the-best-crowdfunding-campaign-possible">Inside Small Business</a></p>

Having been involved in capital raising for several private and public companies in the past, I can say from experience, raising capital for your business is all-consuming.

How to prepare your company for the best crowdfunding campaign possible

<p>Crowdfunding, also known as crowd-sourced funding (CSF), has shown robust growth in Australia since its inception, especially during the pandemic, with approximately $250 million raised over five years.</p><p>It is estimated that the top four Australian crowdfunding platforms have around 250,000 registered users, or less than 1% of the population. In contrast, around seven million Australians, or 28% of the total population, own listed shares directly. The crowdfunding industry is maturing, and there is a significant untapped opportunity in the market.</p><p>Australian CSF intermediaries do not typically provide venture capital or lead investment, which may undermine not only the success of the capital raising, but the eventual success of the companies, as demonstrated by very few successful exits to date.</p><p>Stride Lead has been set up to bridge this gap. The fund will provide cornerstone investment with the aim of increasing the success rate of capital raising campaigns on the Stride Equity crowdfunding platform. Stride Lead also increases the chances of business success by funding only those companies that meet the stringent <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/post/stride-equity-investment-criteria-2"><strong>investment criteria</strong></a> put together by the fund’s <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/about"><strong>highly experienced team</strong></a>.</p><p>Stride Leads is managed by investment professionals with decades of investment experience in some of Australia’s best known high growth companies such as Airtasker, Medipay, Vocus and Resonance Health. As an industry-agnostic fund, Stride Lead will invest in companies that have outstanding founders, have differentiated products and services and demonstrate early traction in the market, preferably with global commercial potential.</p><p>The aim of the fund is to build and support a high conviction growth portfolio of emerging companies at various stages of the development cycle, that offer exits and returns to investors within a reasonable timeframe. Stride Lead has the experience, a team with a track record of investment success and focus to find and support emerging companies and achieve your investment aspirations.</p><p>If you are a sophisticated or professional investor looking for taking advantage of the opportunity in the Australian crowdfunding market <a target="_blank" rel="noopener noreferrer nofollow" href="https://forms.office.com/r/L6Nh3Cjb9y"><strong>register today and get notified once the fund opens for investment</strong></a>.</p>

We are excited to announce Stride Lead, a venture fund dedicated to providing cornerstone investments for companies that
successfully raise capital on Stride Equity crowdfunding platform. 

Coming Soon - Venture Fund Stride Lead

<p>So, it is fair to say I was interested in hearing what he had to say. I am always excited to meet founders with deep knowledge and long term experience in, and a passion for, their industry. Yes, passion for life insurance, which Brett seemed to have in abundance. His thorough understanding of the challenges faced by the life insurance industry, combined with his dedication to find a solution that benefits customers, agents, and insurers alike was evident and it meant that we could happily tick the founder box.</p><h4>Our second investment criteria, that a product or service should solve a real problem, took little to demonstrate to me after my own frustrations in acquiring my own life cover.</h4><p>It is no news to anyone following the royal commission into financial services that the life insurance industry is subject to complex regulations and opaque underwriting processes that lead to inefficiencies and costs that make writing these policies to those most in need uneconomical.</p><p style="text-align: start">As I experienced firsthand, traditional methods of policy creation involve manual assessments, paper-based compliance documentation, and lengthy application procedures. These barriers often deter potential policyholders, not to mention advisers, resulting in a significant portion of the population remaining uninsured, contributing to the estimated trillion dollar underinsurance issue in Australia. I must admit I was close to becoming part of this statistic as a result of sheer frustration during my own life insurance journey.</p><p style="text-align: start">Leveraging their experience and knowledge of the life insurance landscape, Brett and his team at Lifebid, together with senior industry advisers, have built a solution that streamlines the policy issuing process while ensuring that the needs of clients, advisers, and insurance companies are met. The Lifebid platform, a first of its kind, is a comprehensive solution that saves up to 90% of the costs of issuing a life insurance policy, improving accessibility and affordability of cover for everyone. Adding the fact that they have already secured strategic investment from industry experts means box number two was confidently ticked.</p><h4>The third requirement for us in any investment is market-fit. Can LifeBid sell their platform, and if so, who would the buyers be, and what will they be prepared to pay? For us, this validation was straightforward, as LifeBid created their platform together with the industry.</h4><p style="text-align: start">They set up a senior advisory board early on in the project with representatives from most of the insurance companies, licensees, and financial advisers. They have meticulously followed advice and used feedback to perfect the platform. They have also road tested their MVP (minimum viable product) with industry, which resulted in a waitlist of 2,000 advisers, many licensees and most insurance companies, all keen to start using the system.</p><h4>Finally, at Stride, we look for scalability in any business. Whilst LifeBid’s Australian business is expected to be large enough for it to become a billion dollar company, their platform can be tailored for life insurance in other countries. Furthermore, LifeBid is perfectly placed to develop their solution into a client-facing consumer app.&nbsp;</h4><p style="text-align: start">There are other reasons we have picked LifeBid from the hundred or so companies we have reviewed in the last five months. Firstly, they are genuine in their intent to make the world a better place through facilitating cover for those who need it most.</p><p style="text-align: start">Among the most underserved groups in terms of life insurance coverage are those most in need; young families with a single income. These families face the greatest risk should the sole income earner lose their job, become injured or die unexpectedly. However, due to the costs, complexities of the industry and application processes, and lack of awareness, they are often not protected, facing financial burden when they and/or their loved ones need support the most. LifeBid’s founders are passionate about making life, income, and disability coverage accessible to everyone.</p><p style="text-align: start">Finally, it is easy to get caught in the next wave of exciting technology companies. One day it’s crypto, then AI, or quantum computing. However, for every Amazon there is one (or ten) pets.com that went bankrupt shortly after its much hyped IPO. We love that the LifeBid team is innovating in an underserved industry many would consider boring. Warren Buffett followed the philosophy of ‘boring is beautiful’ when it comes to investing in industries providing products that most people should have over most of their lifetime. Life insurance is certainly one of those boring but beautiful sectors.</p><p style="text-align: start">For further information including <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/offer/lifebid-holdings-pty-limited"><strong>Expressions of Interest please click here</strong></a>.</p><p style="text-align: start">Author: <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.linkedin.com/in/mariahalasz/">Maria Halasz</a>, CEO <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/">Stride Equity</a></p>

Brett Wright, the founder of digital life insurance platform LifeBid, came to us about funding shortly after I went through my own frustrating experience of renewing my life insurance policy.

Why we invested in insurtech disruptor LifeBid

<p style="text-align: start">LifeBid is the first startup Stride Equity has backed with investment <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.startupdaily.net/topic/funding/vc-backed-crowdfunding-platform-stride-equity-is-offering-a-new-funding-model-for-startups/">since its launch earlier this year</a> and <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/offer/lifebid-holdings-pty-limited">is the first CSF campaign on the platform</a>. Stride’s crowdfunding platform only hosts companies it has pre-qualified as meet the criteria for co-investment by the VC side of the business.&nbsp;</p><p style="text-align: start">The insurtech startup is hoping to transform the way life insurance advice is provided and managed. LifeBid’s digital platform has been developed to enable the 16,000 financial advice providers and insurers nationally to engage, educate, advise and manage the life insurance needs of clients, while cutting the costs of servicing them by up to 90%.&nbsp;</p><p style="text-align: start">LifeBid currently has a waitlist of 2,000 Australian advisers for its platform and founder&nbsp;Brett Wright comes from that side of the industry, setting out to solve a familiar problem.</p><p style="text-align: start">&nbsp;“As advisers ourselves, and like many others in the life&nbsp; insurance sector, we have seen how expensive it has become for consumers to access good&nbsp; quality advice and cover, and experienced how hard, unprofitable and risky it has become for&nbsp; advisers, licensees and insurers to help more Australians,” he said.&nbsp;</p><p style="text-align: start">“We want our adviser and licensee industry colleagues to be owners, beneficiaries and the&nbsp; driving force behind LifeBid. Partnering with the Stride team in this crowdfunding offer will make&nbsp; this possible and we are excited to be their first portfolio company.”&nbsp;</p><p style="text-align: start">Stride Equity CEO Maria Halasz said they’re pleased that LifeBid if their first investment and the first portfolio company on their crowdfunding platform.</p><p style="text-align: start">“LifeBid is the perfect example of the type of businesses we look to fund; it has experienced and&nbsp; passionate founders who set out to solve an urgent unmet need in an underserved industry by providing an innovative technology solution that is highly scalable,” she said.</p><p style="text-align: start">“Their early engagement with the entire insurance ecosystem is a proof point for us, as they build on these strategic partnerships to facilitate rapid market penetration.</p><p style="text-align: start">“With a highly experienced founding team, track record of delivery, great product-market fit and strong industry support LifeBid ticks all the boxes for us for an investment and we are excited to&nbsp; bring investors this opportunity through our platform.”</p><p style="text-align: start">Details of the <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/offer/lifebid-holdings-pty-limited">CSF campaign are here</a>.<br><br>Published by <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.startupdaily.net/topic/funding/insurtech-startup-lifebid-launches-crowdfunding-campaign-with-co-investor-stride-equity-after-raising-700000/">Startup Daily</a></p>

with venture-backed platform Stride Equity, having already raised $700,000 in a strategic co-investment from industry partners and the Stride Group.

Insurtech startup LifeBid has launched a crowdfunding (CSF) campaign 

<p>In a statement announcing the launch of the campaign, and as previously reported in Riskinfo, LifeBid’s digital platform is being developed “…to enable financial advisers and insurers around the country to seamlessly engage, educate, advise and manage clients’ life insurance needs, while cutting costs to serve by up to 90%.” (See also: <a target="_blank" rel="noopener noreferrer nofollow" href="https://riskinfo.com.au/news/2023/08/08/lifebid-releases-update/">LifeBid Releases Update</a>).</p><p></p><h4>…accessing and providing life insurance advice in Australia …has long been plagued by complex regulations, inadequate technology and soaring costs</h4><p></p><p>The release notes the rationale for the development of the LifeBid offer is motivated by the the fact that accessing and providing life insurance advice in Australia “…has long been plagued by complex regulations, inadequate technology and soaring costs, leading to frustrated advisers, licensees, insurers and consumers alike.</p><p>It says LifeBid’s digital solution aims to connect all industry stakeholders and enable advisers to “…seamlessly manage their clients’ needs on a single platform, providing better value and experience for customers.”</p><p>With 2,000 currently advisers on a waitlist for the platform rollout, LifeBid co-founder, <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.linkedin.com/in/brett-wright-a9461430/"><strong>Brett Wright</strong></a>, says “As advisers ourselves, and like many others in the life insurance sector, we have seen how expensive it has become for consumers to access good quality advice and cover, and experienced how hard, unprofitable and risky it has become for advisers, licensees and insurers to help more Australians.”</p><h4>We want our adviser and licensee industry colleagues to be owners, beneficiaries and the driving force behind LifeBid</h4><h4></h4><p>Wright adds “We want our adviser and licensee industry colleagues to be owners, beneficiaries and the driving force behind LifeBid.”</p><p>From the equity partner perspective, Stride Equity CEO, <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.linkedin.com/in/mariahalasz/"><strong>Maria Halasz</strong></a>, notes&nbsp;“LifeBid is the perfect example of the type of businesses we look to fund; it has experienced and passionate founders who set out to solve an urgent unmet need in an underserved industry by providing an innovative technology solution that is highly scalable. Their early engagement with the entire insurance ecosystem is a proof point for us, as they build on these strategic partnerships to facilitate rapid market penetration.”</p><p style="text-align: start">Limited investment allocations in LifeBid Holdings are available from today to retail and wholesale investors on the Stride Equity crowdfunding platform. <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/offer/lifebid-holdings-pty-limited"><strong>Click here</strong></a> for more details.<br><br>Published by <a target="_blank" rel="noopener noreferrer nofollow" href="https://riskinfo.com.au/news/home/">riskinfo</a></p>

Insuretech firm, LifeBid, has launched a crowdfunding campaign following a strategic co-investment of $700K from industry partners in conjunction with equity crowd funding platform, Stride Equity.

Stride investee makes breaking news in
industry magazine

<p><strong>Modern crowdfunding dates back to 1997 when British rock band Marillion </strong><a target="_blank" rel="noopener noreferrer nofollow" href="https://en.wikipedia.org/wiki/Crowdfunding#:~:text=The%20first%20noteworthy%20instance%20of,to%20fund%20their%20studio%20albums."><strong>raised $60,000 to underwrite an entire tour of the U.S</strong></a><strong>, an early-internet campaign that was so successful they used this method to fund the recording of studio albums again and again.&nbsp;</strong></p><p>At least in its earliest days, though, crowdfunding was viewed through a fairly narrow lens as an avenue for artists and creatives who were invariably rejected by traditional lenders, turning instead to their followers and fans to support them.</p><p style="text-align: start">Fast forward to FY2022 when <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.businessnewsaustralia.com/articles/fy22-was-the-biggest-financial-year-for-equity-crowdfunding-yet--with--86m-raised-across-the-board.html"><strong>equity crowdfunding raked in $86 million</strong></a> in Australia alone. While many people still view angel or venture capital (VC) investment as a more attractive or lucrative option, securing VC funding can be extraordinarily time-consuming and complex. Also, most companies do not reach venture stage, or maybe they are operating in an industry that precludes them from qualifying for VC funding. This doesn’t mean they’re not good businesses or aren’t worth investing in, only that alternative funding options like crowdfunding are more viable.</p><p style="text-align: start">For founders, crowdfunding streamlines the process and allows them to put their pitches in front of a much larger audience of motivated potential investors. Yet even though crowdfunding is often an extremely successful avenue to raising equity, myths and misconceptions persist. Let’s take a look at some of the most common ones.</p><h3><strong>Myth No 1 – Crowdfunding is only for small investments</strong></h3><p style="text-align: start">Many founders still think of crowdfunding as a viable option to only raise small amounts.</p><p style="text-align: start">However, currently it is increasingly common for companies to raise $2-3 million (and more) through crowd-sourced funding (CSF) platforms. Cannaponics, a Western-Australia-based medicinal cannabis company, recently <a target="_blank" rel="noopener noreferrer nofollow" href="https://thewest.com.au/business/health/collie-based-medicinal-cannabis-firm-cannaponics-sets-equity-crowdfunding-record-after-raising-5m-c-10688194"><strong>raised $5 million from 2,750 investors in a fortnight</strong></a> through equity crowdsourced funding, an impressive 10x on its original minimum fundraising target.</p><p style="text-align: start">Our current portfolio of potential investee companies are looking to raise anywhere between $1 million to $5 million in their first round and are expecting to reach significant value inflection points with the funds to be raised.</p><h3><strong>Myth No 2 – Crowdfunding is only suitable for early-stage companies</strong></h3><p style="text-align: start">Crowdfunding isn’t just for startups! It can also be an attractive route to raising capital for established businesses getting ready for an initial public offering (IPO) on the Australian Stock Exchange (ASX). The IPO window is well and truly closed for smaller companies and it is not expected to open until mid 2025. In the interim, many businesses that have been planning an IPO may not suit VC investment, while could successfully fund themselves through equity crowdfunding until such time as the IPO window reopens. This is a specific sweet spot for Stride Equity as we are currently working with a number of companies that missed out on an IPO, but are getting ready in the next 18 to 24 months to list on the public markets.</p><p style="text-align: start">Other opportunities that have been successfully funded through equity crowdfunding are property development syndicates and even those profitable businesses that seek capital for international expansion.&nbsp;</p><h3><strong>Myth No 3 – Crowdfunding is a one-time funding solution</strong></h3><p style="text-align: start">Crowdfunding does not necessarily need to be a one-off injection of capital.</p><p style="text-align: start">Companies can raise multiple rounds through crowdfunding platforms and are <a target="_blank" rel="noopener noreferrer nofollow" href="https://download.asic.gov.au/media/5702668/rg261-published-19-june-2020-20200727.pdf"><strong>legally entitled to raise up to $5 million in any 12 month period.</strong></a> Often these transpire as follow-on capital raisings that are executed at a higher valuation, providing investors with a clear indication of how the value of their investment is progressing.&nbsp;In <a target="_blank" rel="noopener noreferrer nofollow" href="https://static.birchal.com/yearbook-2022.pdf"><strong>Birchal’s 2022 report on the crowdfunding sector</strong></a> follow-on CSF offers had on average a 140% increase in valuation. This confirms not only the ability to raise additional capital but also the quality of the companies participating in equity crowdfunding.</p><p style="text-align: start">We, at Stride Equity, invest our funds together with the investors on the crowdfunding platform and are committed to the success of our companies. To that extent we are here to ensure that they are adequately funded and raise follow-on capital if and when needed, ensuring that they can execute on their business plan.</p><h3><strong>Myth No 4 – Crowdfunding provides companies only with dumb money</strong></h3><p style="text-align: start">There’s often a misguided belief that VCs add more value to a business long-term. Many founders believe that crowdfunding is ‘dumb money’ because the funds are raised from individuals who don’t necessarily have vast investment experience or knowledge.&nbsp;</p><p style="text-align: start">In many instances this could not be further from the truth. A great example is Heliogen, the renewable energy business funded by the SeedInvest platform in the US in addition to major investors including Bill Gates. Heliogen went on to list on the Nasdaq and became one of the first crowdfunded unicorns. Whilst not all crowdfunding investors are the caliber of Bill Gates, many are highly successful business people or well informed professionals who do their research.&nbsp;</p><p style="text-align: start">Also, these investors often become customers of the crowdfunded companies, using and championing their technologies, products and services. This can add significant tailwind and facilitate the growth and success of companies that are looking for market expansion or scale up.</p><p style="text-align: start">At Stride, we use our founders’ 100 years of collective experience of investing in and operating businesses to assist our platform companies, without the onerous VC investment terms.</p><h3><strong>Myth No 5 – Crowdfunding is a company’s ‘last resort’ for funding</strong></h3><p style="text-align: start">Some founders think companies that raise or intend to raise capital through CSF are only doing so because they weren’t able to secure funding from angels or VCs. This might have been true in the past, but I’m seeing more founders making plans to raise capital through crowdfunding once they see the strategic value of it (customer acquisition, marketing/PR, capital, networks). Plus, there is a growing segment in the founder community that actually does not want to raise capital from VCs.&nbsp;</p><p style="text-align: start">In many cases, crowdfunding is likely the quicker option.&nbsp; Depending on how well-prepared a company is, a CSF capital raise could take as little as 4-6 months, whereas raising capital from angels and VCs may take up to 24 months in the current environment.</p><p style="text-align: start">VCs and crowdfunding needn’t be mutually exclusive options for companies seeking funding either. Some VCs, like Flying Fox ventures, support their portfolio companies when they have an equity crowdfunding campaign. Others only invest as part of a syndicated campaign including crowdfunding. This is how Stride works; we co-invest with retail investors in campaigns on the Stride Equity crowdfunding platform.&nbsp;</p><p style="text-align: start">Companies today have more options for funding than ever before and they should seriously consider equity crowdfunding in that mix. With obvious advantages and a generational shift in the way people invest in venture, equity crowdfunding is not only here to stay but here to grow.</p><p style="text-align: start">Author: <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.linkedin.com/in/mariahalasz/">Maria Halasz</a>, CEO <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/">Stride Equity</a></p><p style="text-align: start">Published by <a target="_blank" rel="noopener noreferrer nofollow" href="https://dynamicbusiness.com/leadership-2/expert/breaking-down-five-common-crowdfunding-myths-and-misconceptions.html">Dynamic Business</a></p>

Breaking down five common crowdfunding myths and misconceptions 

Dynamic Business - 14/07/2023

<p>As was rightly pointed out recently by Birchal Co-Founder Matt Vitale, that Australian crowdsourced funding (CSF) platforms have raised $240 million for 320 start-up companies over the past five years is an unqualified success.</p><p>Accessing otherwise unavailable investment opportunities in high growth companies has proven to be attractive to retail investors who, irrespective of the lack of tax benefits enjoyed by wholesale investors, have been increasingly participating in equity crowdfunding campaigns.&nbsp;</p><p style="text-align: start">In Australia, around 10 million people own shares directly in ASX-listed companies, more of them do so indirectly through their super funds. In contrast, the number of Australians having invested in equity crowdfunding campaigns is estimated to be under 200,000.&nbsp;</p><p style="text-align: start">There is a strong argument that implementing tax benefits available to professional venture investors and allowing more flexibility around the type of investment securities would increase participation. Some argue that creating a secondary market in crowdfunding shares would also draw increased participation.</p><p style="text-align: start">Whilst there is little doubt that more investors would participate in crowdfunding campaigns with increased secondary trading opportunities, any change to liquidity measures should benefit the entire crowdfunding ecosystem, not just the investors.&nbsp;</p><p style="text-align: start">Here are four areas for consideration when it comes to creating a secondary trading market for equity crowdfunding shares.</p><h3><strong>A medium to long-term investment horizon</strong></h3><p style="text-align: start">When investing in early stage or growth companies, venture investors expect to hold their shares for a period of 5+ years. This timeframe normally allows for the company to fail or reach a significant value inflection point and create a liquidity event for investors, either in the form of dividends, sale of the business, or listing its shares on a stock exchange. Professional venture investors are provided with tax incentives such as the Early Stage Venture Capital Limited Partnership (ESVCLP) regime to compensate for the higher risks and longer time horizons of these investments.&nbsp;</p><p style="text-align: start">Companies raising funds through equity crowdfunding are not too dissimilar in nature to those funded by professional venture capital, and often require several years of development and growth before they reach their next value uplift. It is therefore important to the company’s growth and stability that investors fund these companies with the intention to hold their shares medium to long term.&nbsp;</p><p style="text-align: start">Not only does this provide for stability of ownership and predictability of control of the company, it also allows management to focus on growing the business, without distractions around secondary trading of their shares.</p><h3 style="text-align: start"><strong>Growth companies are difficult to value</strong></h3><p style="text-align: start">When venture investments are traded through secondary funds, the transactions happen between two professional investors with expertise and experience in valuing growth companies.&nbsp;</p><p style="text-align: start">There are a large number of unknowns in growth companies and even professionals can get it wrong sometimes. Trading the shares of crowdfunded companies would invariably occur with at least one of the parties (the original retail investor) not having the expertise to properly assess the value of the company. An inequitable transaction could negatively impact the retail investor together with the company.&nbsp;</p><p style="text-align: start">If investors liquidate for personal reasons independent from company performance, their primary consideration will not be valuation and they may trade their shares at significantly below the underlying value of the business.&nbsp;</p><h3 style="text-align: start"><strong>Crystallising valuation too early could be detrimental&nbsp;</strong></h3><p style="text-align: start">Once a portion of the company’s shares are traded, its entire valuation is crystallised. This could be great if there is a buoyant market with a lot of demand for the company’s shares. However, it could be detrimental if trading occurs in a thin market by distressed sellers.</p><p style="text-align: start">The founder’s ability to raise future rounds of capital could be impaired and fund raisings may take longer, at less favourable terms, and by surrendering additional equity.&nbsp;</p><p style="text-align: start">Trading of the company’s shares in a thin market is likely to be incongruous from its performance. Irrespective of meeting customer acquisition, revenue, and/or profitability targets, shares may trade at a significant discount to their calculable value. The ASX microcap index is a very good proxy for what can happen to startups in a thin market.</p><p style="text-align: start">Of course the opposite may also happen where shares get traded at a significant premium to the company’s underlying value, a scenario that is just as perilous to the ecosystem in the long term.&nbsp;</p><h3 style="text-align: start"><strong>Crowdfunded companies often provide additional benefits</strong></h3><p style="text-align: start">The rarely discussed benefit of investing through equity crowdfunding is that shareholders may become entitled to discounts or free products pursuant to making an investment. Investors are often customers of the companies’ products or services already, and special discounts or product giveaways often accompany an equity crowdfunding campaign. How you value these rights when trading shares, if at all, lands the ecosystem with an additional complication.</p><p style="text-align: start">Whilst proposals to tokenise crowdfunding investments, thereby allowing them to be freely traded on the blockchain, might go some way to address the issue of liquidity, this will require a significant shift in investor mindset and regulation, neither of which is likely in the immediate term.&nbsp;</p><p style="text-align: start">In the meantime, we must think globally and consider the best interests of the entire start-up ecosystem including investors, companies, advisors and intermediaries. Emerging businesses must be given the opportunity to succeed (or fail) in a timeframe that is realistic and not be put under the type of pressure that companies on stock exchanges are exposed to.</p><p style="text-align: start">Secondary trading of shares acquired through crowdfunding should be limited to buy-backs or handled by regulated secondary funds similarly to the venture capital industry.&nbsp;</p><p style="text-align: start">The broader venture market exists to provide patient capital to companies that need time as well as money to grow.&nbsp;</p><p style="text-align: start">This is why professional venture investors enjoy tax benefits and more flexible investment terms.</p><p style="text-align: start">If we want the same tax benefits and flexible terms made available to crowdfunding investors, we must be prepared to be similarly patient.</p><p style="text-align: start">Author: <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.linkedin.com/in/mariahalasz/">Maria Halasz</a>, CEO <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/">Stride Equity</a></p><p style="text-align: start">Published by <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.startupdaily.net/">Startup Daily</a></p>

After an admittedly late start, crowdfunding is certainly coming of age in Australia.

Startup Daily - 05/07/2023

<p>This article provides a concise overview of Maria's speech, highlighting key points and offering valuable takeaways for investors and entrepreneurs alike.</p><h4>Video</h4><p>Watch Maria's keynote speech<strong> </strong><a target="_blank" rel="noopener noreferrer nofollow" href="https://www.youtube.com/watch?v=0uR3xfi3Zd0"><strong>here</strong></a><strong>.</strong></p><h4><strong>Understanding Equity Crowdfunding and Venture Backing</strong></h4><p>Maria began her speech by distinguishing between equity crowdfunding platforms and venture-backed platforms. At Stride, we combine venture capital with equity crowdfunding.</p><p>We have set up Stride Lead, a venture fund that co-invests with the Stride Equity crowdfunding platform. Stride Lead co-investing up to 20% of the round, while retail and wholesale investors contribute the remaining 80%. Stride Equity is the first venture-backed equity crowdfunding platform in Australia.</p><h4><strong>Unlocking Opportunities in the Pre-IPO Bridge Funding Market</strong></h4><p>Stride Equity's focus lies in supporting pre-IPO companies. Maria explained that due to the current state of the IPO market, many well-established private companies with revenues, profits, and dividends are not going public. At Stride Equity, we believe that this situation presents an exceptional opportunity for investors to explore these companies, given their attractive valuations and favourable terms.</p><h4><strong>The Importance of Exit Strategies</strong></h4><p>Maria emphasised the significance of considering exit strategies before investing. She highlighted that we prioritise exit plans at Stride Equity when evaluating potential investments. She discussed the main opportunities for exiting a company: IPOs and mergers and acquisitions (M&amp;A). and the current challenging market environment, which we last saw in the late 90s.</p><h4><strong>Factors Affecting the Market Environment</strong></h4><p>In her speech, Maria discussed various factors impacting the investment landscape. She highlighted geopolitical tensions, such as the war between Russia and Ukraine. Additionally, she addressed the shifting power balance between China and the US, along with inflation concerns and potential interest rate hikes. These factors, coupled with technological advancements and the potential displacement of jobs by AI, contribute to an environment of uncertainty but simultaneously create many opportunities for investors. Maria predicted that this environment would persist until around 2025, making it an attractive space for investors.</p><h4><strong>Optimising Exits: Key Considerations</strong></h4><p>Maria provided essential insights on optimising exits for both founders and investors. The timing was identified as a critical factor, taking into account macroeconomic conditions and the company's growth cycle. The ideal scenario for an exit involves maximum valuation, peak revenues and profits, a robust human resources base, and a balanced board. She also emphasised the importance of demonstrating future growth potential and aligning interests between shareholders and the company.</p><p>Other considerations discussed included keeping relationships open and maintaining clear communication with shareholders, investors, and potential acquirers. Building these relationships and exploring regulatory considerations should begin early in the business's life cycle to maximise exit opportunities.</p><h4><strong>Examples of Potential Exit Strategies</strong></h4><p>While Maria emphasised that her examples were not investment recommendations, she showcased two notable cases to illustrate the criteria for successful IPOs and M&amp;A deals.</p><p>The first example highlighted Redox, a family-owned company with consistent growth in revenue and profits over the past decades. Redox’s IPO is a good case study for a well-prepared and executed liquidity event.</p><p>The second example showcased the Newmont/Newcrest acquisitions. This deal highlighted the execution of a long-awaited transaction with substantial synergies. Though it was not a complete exit for shareholders, it can be viewed as a partial exit due to the special dividend shareholders received.</p>

In her recent keynote speech at the Capital 2023
Investor Conference organised by Wholesale Investor, Maria Halasz, CEO of
Stride Equity, shared her insights on optimising exits for investors. 

Capital 2023

<h2>Summary</h2><p>Crowdfunding allows entrepreneurs to tap into a diverse pool of backers through online platforms such as Stride Equity. The four primary crowdfunding types are donation-based, reward-based, debt-based and equity crowdfunding. The four types can also be combined.</p><p>In our previous article, we provide an overview of <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/post/equity-crowdfunding-a-guide-for-startup-founders">how equity crowdfunding works in Australia.</a> In this post, we dive deeper into the nuances of crowdfunding, its various forms, and how startups and scaleups can leverage them to secure funding.</p><p>Crowdfunding has emerged as a popular alternative to traditional startup financing, allowing entrepreneurs to pool resources from a large number of backers via online platforms. While commonly associated with artistic and personal projects, crowdfunding has also proved a viable option for emerging businesses.</p><p>The four primary types of crowdfunding are donation-based, reward-based, debt, and equity crowdfunding. With an increasing number of hybrid models and emerging trends, distinguishing between them can be a challenging. We, therefore, offer a breakdown of each type, along with its respective advantages and disadvantages for founders and investors alike.</p><h2><strong>Donation-based crowdfunding</strong></h2><p>Donation-based crowdfunding is a form of crowdfunding where supporters contribute funds to a project or cause purely out of altruistic motives. Rather than seeking a financial return on their investment, backers donate funds to express their support for a particular individual, organisation, or social issue. Typically, this type of crowdfunding is used to raise money for non-profit initiatives, charitable causes, or personal needs such as medical expenses or community projects. Backers may receive non-monetary rewards, such as public recognition or tokens of appreciation. However, the primary incentive for donating remains the satisfaction of contributing to a worthwhile cause.</p><h2><strong>Reward-based crowdfunding</strong></h2><p>Reward-based crowdfunding is a type of crowdfunding in which backers contribute funds to a venture or project in exchange for a non-monetary reward. Rewards can take many forms, such as product samples, exclusive access to the project, or a personalised thank you note. The value of the contribution typically corresponds to the size of the contribution, with larger contributions receiving more substantial rewards. So, backers receive a tangible reward in exchange for their contribution but not in the form of ownership of the project or venture. Reward-based crowdfunding allows founders to test the demand for their product and get early feedback from backers. Therefore, reward-based crowdfunding can be an effective way for emerging companies to build a customer community around their venture.</p><h2><strong>Debt-based crowdfunding</strong></h2><p>Debt-based crowdfunding allows investors to lend money to a borrower or a business in return for repayment with interest. Investors do not receive ownership of the project or venture. This form of crowdfunding offers a more accessible financing option than traditional bank loans, which can have stricter eligibility requirements. For investors, it provides an opportunity to earn a fixed return on their investment at a higher rate than traditional savings accounts or bonds.</p><h2><strong>Equity crowdfunding</strong></h2><p>Equity crowdfunding presents a compelling opportunity for founders to raise capital by offering equity in their business to a diverse group of retail and wholesale investors. Investors receive partial ownership of the business in exchange for their funds. Equity crowdfunding platforms, such as Stride Equity, allow entrepreneurs to promote their investment opportunity publicly and provide prospective investors with an overview of their business through a dedicated offer page on the platform. Investors who invest in emerging companies through equity crowdfunding may gain financial returns in the forms of dividends or capital gains if the venture is successful. However, early-stage investments are risky. Therefore, investors should read all provided information carefully, and seek independent financial advice before committing to any investment.</p><h3><strong>Stride Equity – Combining the resources of venture capital with the power of equity crowdfunding</strong></h3><p>At Stride we combine the resources of venture capital with the power of equity crowdfunding. We invest our own capital alongside wholesale and retail investors and use our experience and expertise in investing, building and operating businesses to unlock the growth potential of our investee companies. We mentor and advise our investee company founders and provide access to our networks and connection to facilitate the growth and scale up of the businesses we invest in.</p><p>Our process consists of three main steps:</p><p><strong>1. Co-investment</strong></p><p>Our venture fund, Stride Lead, invests in companies that are successful in raising capital on the Stride Equity crowdfunding platform. We invest up to 20% of the total offer in highly vetted emerging businesses, together with wholesale and retail investors on the Stride Equity platform. We conduct rigours due diligence before presenting an investment opportunity to other investors. Our <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/post/stride-equity-investment-criteria-2">investment criteria</a> ensure a comprehensive assessment of the people involved in the venture, the product or service, the market and the company’s potential for growth and scalability.</p><p><strong>2. Expression of Interest campaign</strong></p><p>We collaborate closely with our investee companies and promote their business initially through an expression of interest (EOI) campaign. Potential investors can review the investment summary, which is made available on the Stride Equity website and they may express their interest in participating in the capital raising round. This is an important step and is highly instructive on the level of investor interest, the type of offer that might be successful and the amount of capital that might be raised by the company through equity crowdfunding.</p><p><strong>3. Offer campaign</strong></p><p>Companies that generate sufficient interest during the EOI campaign are invited to launch their investment offer campaign. During the offer period, investors can make their investment via the Stride Equity platform. We work hand-in-hand with investee companies to ensure that investors have all the necessary information to make an investment decision and companies comply with all legal and regulatory requirements.</p><p>We encourage founders of emerging businesses wishing to raise capital and investors who want to benefit from an investment in high growth companies to <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.strideequity.com.au/contact">contact us</a> for further information.</p>

This guide provides an overview of the dynamics of crowdfunding,
focusing on its various forms and how startups and scaleups can leverage them
for funding. 

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