Access to Capital

The Commercialising Emerging Technologies (COMET) program may be able to help.

COMET has been extended until June 2011 as part of the Australian Government ’s Innovation Statement, Backing Australia’s Ability – Building Our Future through Science and Innovation. This will provide an additional $100 million in funding providing assistance to more than 1,000 firms.

COMET helps customers commercialise innovation in a number of different ways.

Today Andrew Winter talks to Ian Crebbin a highly experienced adviser and consultant at AusIndustry who is constantly working to bridge the funding gap for companies looking to take a new product or service to the market.

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Few Business Owners/Managing Directors of SME’s in Australia have a great deal of understanding of structure, form and layout of an organisation. Often we hear the words “investor ready” and this is very true and is a critical component. But so is Investor Friendly.

There is no “failure to provide a market” at the SME level, merely a failure to educate the entrepreneurial public of its existence. In addition Business Owners need to understand how they could use shares as a type of ‘currency’ for their business being able to swap them for financial capital, intellectual capital or human capital.

We are often told in Australia that there are no investors available to pursue equity capital for the SME sector. In reality it is the opposite. The investors are out there waiting to be educated and waiting to be given an investment opportunity that has the makings of a successful growth business. In order to find them however takes hard work and a solid marketing plan. If you dont believe me then look at these figures for the Newcastle Stock Exchange over the last two years:

In November 2003 there were 13 Listed Securities on the NSX with a market capitalisation of $97.2M. Not quite two years later in September 2005 there were 45 Listed Securities with a market capitalisation of $321.6M. Now this doesn’t happen without investors so the fact is the opportunity exists.

Australia is a nation of gamblers. We are also a nation of investors. You dont need to have the hottest thing on the market to attract business investors but you do need to be able to take good advice. If you cant then stick to what you are doing and do it well and you may just get lucky. However if you want your business to grow and be bigger than you are then start to think about how you will differentiate it from all of the other business investment opportunities you are competing against.

In closing let me put it this way: If I were an investor and I had two different types of businesses wanting my capital investment and one said: “I just want to get some money to get started in business and then I would be happy to just progress from there. I really dont want to share my ownership or control beyond that. ” and the other said: “I have a 3-5 year business plan to continue growing, raising capital for expansion and ultimately listing on the Newcastle Stock Exchange or even the ASX.” As an investor I am immediately attracted to the second option because I have a growth plan and exit strategy to sell down my initial investment once the company is listed.

Now neither scenario may succeed. That is the nature of business investment. But regardless of the product or business model I am investing in the latter of the two offerings is more attractive to me because it will be supported by a structure and layout that is Investor Friendly. This is a key failure in the business community when trying to enter the private equity market for the first time.

If you want to know more about the Newcastle Stock Exchange go to the free resources section where you can access some valuable information about the NSX.

Andrew Winter is an Experienced Business Development Consultant specialising in helping companies grow through establishing and implementing sound capital raising strategies.

AccessToCapital has a range of experts available in Capital Raising and Business Development to assist growing businesses.

“I cannot say whether things will get better if we change. What I can say is they MUST change if they are to get better.”
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