You can use this for raising equity, mezzanine funds. You can use it for acquiring land, doing permits, construction, sales etc. In short there is ample flexibility in terms of what and how you use fundraising service as long as it is well documented and disclosed. Which is where we come in.
It can also be applied for Business funding as well.
How much money can I raise using this?
In theory you can raise an unlimited amount of money using this. It boils down to how many people are looking at your offer.
Can anyone including small investors invest in the offers?
Yes, we issue a Prospectus with full disclosure. So it is open to all Retail investors across Australia.
Can I offer a different rate of return based on how much people invest?
Yes, you can staircase the return based on how much people invest. So for instance someone who invests a million dollars can be offered a higher rate of return than someone who invests $5000
How much time does this take?
It takes us 2 to 3 weeks to draft the offer and get your website up. Typically if you provide us with the information needed on time we can move faster. After that ASIC takes 7 to 14 days as part of its exposure period during which the offer can be promoted but no money can be accepted. After this you can start accepting funds.
How much does this cost and what do I get in return?
We charge a one time fee of $15,000 ex GST for the tech setup and drafting of one prospectus and getting it cleared from ASIC for the per project offer and $20,000 ex GST for the tech setup and prospectus drafting for the fund style offering.
We also charge a 5% fundraising fee for any investors that we bring to the offer, but there are no fees if all investors come from your side. There are no ongoing fees.
You should be aware of the following additional costs. We setup a Public Unlisted Company which costs $650 and prospectus lodging fee with ASIC is $2350. There is also a yearly audit which we estimate at around $2500 for per project offers and around $5000 for pooled offers but you can engage your own auditors if you wish. These are not included in our price and paid separately.
Who has done this before?
Since launch in early 2017 we have been engaged by several Developer clients, some of whose offers you can see on estatebaron home page.
What rate of return is expected by investors?
Typically we recommend offering mezzanine or pref equity at around 10 to 12% annum. But what we also do is fix the return to an upper ceiling. For instance 20% over 18 months. But if the project extends beyond 18 months it is still 20%. This helps protect the Developer in case of delays and is safer than debt. As a Developer you should do your best to give the projected returns to investors as only then they are likely to reinvest and recommend to others.
How is this regulated?
We structure this as a Public Unlisted Company and Prospectus and provide full disclosure meeting all the requirements as needed for fundraising in Australia. If you approach a lawyer to do this you will probably spend hundreds of thousands for the same thing. We have reduced the costs by using templates and cookie cutter structures that we have done before. The team has been involved in several public ASX listings, drafting of Prospectuses and Product Disclosure Statements. We take our obligations under regulatory requirements seriously and help you understand and navigate and them well.