What can you help me with?

We are experts in equity crowd funding and small scale share offers targeting $250,000 to $2,500,000 for companies that are emerging or in early stage expansion.

Can you introduce me to investors?


Where do the investors come from?

In the past, we have raised significant tranches of capital from the following sources:

  • Staff and managers
  • Suppliers
  • Professional colleagues of the directors
  • Customers and clients
  • Investors from our own list, which includes high net worths, angel investors, family offices, overseas investors and professional investors
  • People that know the industry and can look at your business plan and, because of their insider knowledge, determine your likelihood of success.

If you’re a start-up or early stage venture, you’re unlikely to have many staff and/or suppliers or customers. However, we believe there is a strong possibility that successful tradespeople, which we can identify, may be interested in investing their SMSF in your company as part of a small scale share offer.

How does a typical capital raising work?

This will depend on our level of involvement.

Our simplest offering is a series of workshops where you learn how to communicate the value of your offer yourself and we provide you with all the templates, documentation and mentoring to do this yourself.

Our preferred approach to a capital raising is to coach our clients through the process so they learn how to raise their own capital in the future and the investor list that is developed through this process then becomes an asset of the company that can be relied on for equity capital injections for many years to come. By coaching, we mean we provide you with the templates and coach you through the development and marketing of the offer, including the provision of an offer document, but you’re the one that will need to apply the shoe leather and conduct the majority of the meetings and presentations.

Lastly, we can do a full service capital raising for you where we do all the leg work as soon as you’ve given us the information that we need and all you need to do is present at the investor meetings.

What does it cost?

Again, this will depend on our level of involvement.

Our Capital Accelerator program is our most affordable option at $6,950 +GST for six one day workshops over 300 templates and access to our team of mentors, who have over $172m worth of capital raising experience.

Our preferred capital raising process includes fees of $9,875 +GST in up fronts and 6.9% of the capital raised. This entitles you to 40hrs of support from our firm and includes an offer document. Any additional support is billed at $250/hr + GST and we engage most clients on a 24 month mandate. Depending on the platform you choose, there’d be additional costs for design, videos and company conversion. We’d expect this to be less than $9,000.

The full service capital raising option is priced at $10,000 per month for four months and 9.9% of the capital raised plus platform distribution fees, trust account fees, design fees, legal fees, (you get the pictures) fees…

What is your experience in this industry?

The model that we use for capital raising doesn’t require us to know the specifics of your industry.

Do I need a business plan?

Whilst many companies have raised some equity capital from a single investor with just a pitch deck and/or a video, there is still no better to describe what your business is about and to give the investor an understanding of your capability than presenting a business plan. See our Resources section for the terms of reference of a business plan.

Will you assess our business plans?

  1. Alchemy will read your business plan and scrutinise the details but we are mainly interested in the financials, spending and growth plans of the business. It is important to portray the offer of what value investors are receiving. It is possible to put a good plan together in as little as 3 weeks, although they typically take longer than this depending on the experience of the founders. Alchemy can offer some assistance in this area, but the majority of the responsibility will be up to you. We assess you core values but our main role is in helping you create a business structure that is investor friendly.

How do I know that I'll raise the money?

You don’t. If we describe a successful capital raising as achieving minimum subscription, which depending on the offer can be anything from $100,000 to $500,000, our track record has ranged from as low as 50% success rate some years to as high as over 75% success in our best years.

What is minimum subscription?

This is the minimum amount of money that you need to have a reasonable chance of meeting your business goals as described in your offer document. It’s a really important number because funds will be held in trust until this amount is reached. If the amount is not reached within a four month period, funds are returned to investors. It is essentially a signal to investors that indicates that you will not commence spending investors funds until you have a sufficient amount of money to meet meaning milestones in your business plan.

What happens if we do not raise any funds? Are we still liable to pay you the fees?

No. If the capital raising is unsuccessful, no commissions are payable.

If no funds are raised at all by Alchemy or ourselves, can we terminate the agreement with no further cost or penalty?

  • If this were to happen, we would both agree and end the engagement by mutual termination. Any outstanding fees would be due but there would be no additional costs. Consequences of termination are that you agree not to continue to use the offer document we prepare and do not contact anyone we introduce you to for a 2 year period.

Based on your experience, what is a likely timeframe to work within raising the funds, e.g. funds are projected to be raised within 6 weeks, 6 months etc.?

  • The primary determinants of how long it takes to get an offer open is the quality and speed with which you provide us with information for the offer. A reasonable guide would be approx. 6 – 8 weeks to open an offer. How long it then takes to fill an offer is highly unpredictable. The fastest we have done is $990k in 2 days from approx. 8 investors and some more complicated offers have taken us 12 months to get to $600k. The key is very broad distribution, leveraging relationships and working the offer as a team (i.e. you cannot outsource an equity capital raising – we will drive the offer process but we need you engaged and proactive, working as many investor angles with us as possible).

We've tried to raise capital by ourselves and failed. How do we know you'll be more successful?

  • I’ll coach you on how to do this. The process is for our team to review your business plan and financial forecast, create a proposed share capital structure and then draft a convertible note. You would use this information to develop a pitch deck and then I will coach you on how to pitch it to people in your network. The fact you have tried is irrelevant, that is why you are in need of these services.

Will Alchemy assist in sales & marketing, in reference to introducing and promoting my company throughout their vast network?

  • On reaching minimum subscription, we would be happy to include the details of your company in our newsletter along with other clients and providers we sometimes promote. If we go with a distribution platform option, your company’s share offer will be distributed more widely.

Will Alchemy sign up as a re-seller? Will Alchemy buy our products and services?

We generally like to be users of the products and services of our client companies and the same would apply for a re-seller agreement. Put a proposition to us. It will depend on the deal.

I don't think I can afford your capital raising fee. Do you ever do anything else in regards to commissions for smaller raises?

Cost of capital discussions are only valid if you have other options i.e. debt. The fact is that for SMEs there is no better equity option than what we are proposing. If you go the angel route, chances of getting the cash are slim. You will spend some money, you will spend an enormous amount of time and will have to cede at least double the equity that we are proposing. Indicative CBA personal overdraft rate as of 2016 is 16.60% p.a. To me, when considered this way, 15% cost of capital seems pretty good not to mention a process that will make your business better and support business development.

Does Alchemy hold an AFSL?

No. Alchemy does not hold an AFSL. Alchemy has never undertaken the services that require an AFSL.

What type of company should I be to raise capital?

This will depend on your stage and capital raising strategy. We will make a recommendation.

Can you help me source directors?

Many people come to Alchemy because of the strength of our networks. So in general terms, yes we can introduce you to potential directors. More commonly though, we will introduce you to other organisations that specialise in this area, such as Women on Boards.

Can I promote the fact to the public that I'm seeking capital?

Alchemy can provide a Premium marketing package for $5000 + GST. This package includes a short corporate video that can be used as a sales and presentation tool. From experience, use of this tool increases the success of filling the offer by 56%. It is a business development tool that puts a face to your business and makes the investment real, enabling investors to see the potential and professional expertise of the company quickly.

PR is one of the best mechanisms for creating awareness of your company and offer to the general public. It is a difficult legal area to work in though so please get advice from Alchemy before anything goes to print. It is illegal to disclose to the public that you are looking for investment. Alchemy have significant experience in this area and can help you.

Will you value my company?

We are not registered valuers. Some clients will have their companies valued before a capital raising. More commonly though, we will work with your financial forecast and take an offer to market, which, if successful, indirectly values the business.

What sort of deals does Alchemy attract and what sort of deals have been backed?

We’ve got a history of success doing small scale share offers raising $250,000 to $2.5m for early stage expansion and emerging companies in technology, financial services and food industries. We believe that all great companies were small once and we loved to support and help the good guys in what is otherwise the wild west of finance.

How many deals have you done?

Have a look at our Capital Raised page to get a sense of this.

The duration of the whole project, in particular the time to first funds is of great concern. We would like to see what you propose to keep the time to funds within 6 weeks, preferably 4.

The duration is most affected by the quality and timeliness of information from the founders. There are also other outside influences, e.g. legal review, generate Accounts Reports, which cannot be avoided and are not in our control. This is a reality of the process and why we estimate 2 to 3 months. We also clearly need to expand on many of the actions that need to occur, there is much more to raising capital than just writing the offer document. No investor makes an instant decision to invest: you need to factor in time to present the offer, arrange meetings, follow up with calls, have meetings to provide further information, as required, then to process payments through the trust account.

The cost, in particular your fees, fees for 3rd parties and initial deposit are on the high side and if you intend to keep your fee at the current level, then we would like to see a payment schedule where your fee is covered from the raised funds.

Our consulting fees are charged separately to our success fees to engender commitment from the founders. Without a committed founder, the process will not work. There are ways we can help you cover the initial expense, say, by use of a convertible note, which we can discuss separately.

Exclusivity is of great concern. In particular, we have concerns about possibly missing on opportunities with international investors. We explained during past meetings that we have already had discussions with potential investors and they may be ready to invest if we achieve certain milestones with the company. We would like to see the agreement amended to non-exclusive.

A non-exclusive contract does not create any obligation for the matter to proceed. I would also remind you that we are using our IP to deliver you an offer that is attractive to investors, if you then take that work to sell equity outside the process, where is the benefit? We are willing to make exclusions for specific named investors with whom you have some other arrangement. I’d also like to reiterate that the exclusive arrangement in no way prevents any professional investor or interested party, international or otherwise, from taking part in the raise. In fact, by using our process your negotiating position with others is made much stronger.

My concern is that the investor population on the distribution platform appears to be very small. I would like clarification and assurance on the number of investors, outside the VIP list, that will have access to the offer document.

In addition to our own networks, we build an investor list for each offer. Subscribers of distribution platforms range from the thousands to the tens of thousands, depending on the platform. For obvious reasons, this number changes all the time.

What are the rules for overseas directors on public unlisted companies?

  • The minimum requirement is that at least two of the three directors in a public unlisted company are domiciled in Australia. Rest is OK.

Should independent directors invest in the company's offer, even if it's a small amount such as $5000? If we pay our directors in shares, does this affect the offer?

  • Generally, it doesn’t matter either way because they are counted towards the 20:12 whether they invest before or after the offer opens. Staff, blood relatives of the founder, sophisticated, professional and overseas are all excluded from the 20:12 rule but directors are in.  Have a think about whether losing 2-3 concessions at this stage is appropriate. For a small amount like this, I would probably get them in as founders pre-conversion.

How does repayment of a convertible note debt work?

Conversion is generally discretionary and can be varied by the parties. My preliminary thoughts are that If you do not want it to convert then the repayment process needs to be started. It would be commenced with a meeting to discuss the situation and get agreement on repayment. The worst case scenario if they fail to act or don’t agree to repayment is to issue a default letter demanding full payment, followed by the threat of legal action followed by actual legal action. Legal fees are added to their bill. At any point in this process a compromise repayment schedule on the two year term as discussed is possible.

If the minimum funds are not raised by Alchemy's network and/or through ASSOB, are you in any way accountable for the lack of capital raising success or is that $30k risk mine to wear?

With regard to not making minimum subscription, there is no refund on the upfront Consulting Fee. However, I should also point out that we do our utmost to ensure that you are successful. Alchemy does not operate on consulting fees alone, without the success fee, this business is not viable. We spend a lot of time and effort prior to the start of raising that is not recouped through the consulting fee alone. Then there is the opportunity cost, etc. Our process of only taking 1 in 14 applicants ensures that we believe in your matter as much as you do, it’s the only way to succeed. We take no benefit from moving forward with a matter that we are not sure will achieve, at least, minimum subscription.

What is the process re the constitution and an eventual sale of the business

Process is as follows (to be read with a copy of the constitution)

  1. Board meeting – Board to pass a motion to sell the business or to receive a delegation from shareholders to sell the business (clause 64)
  2. Call a general meeting (clause 32) by sending a notice with the proposed motion e.g. propose to sell the business or pass a delegation that allows the Board to sell the business 33.1.C.  Meeting can be an annual general meeting or an extraordinary annual meeting
  3. At general meeting – appoint a chairman (36) & confirm a quorum (clause 35)
  4. At general meeting – after sufficient discussion around the motion the chairman asks to vote on the motion by a poll (one share one vote) or show of hands (clause 39).  Outcome is decided by majority including proxies (clause 50) and minuted.
  5. Meeting is closed and minutes distributed
  6. Board progresses the sale and distribution of funds after the sale is completed.

Given the variation in issue price for myself and any early investors from the listed issue pricing, how will the register and level of raise proposed be balanced? To maintain the same quantity of shares on issue and relative level of equity and also anticipated level of raised capital, there will have to be a variation made, as any new share issue to make up for the shortfall will effectively dilute existing investors, will the difference of shares required to balance the current offer be transferred from the founders end or will the overall level of capital sought under the offer be reduced?

This is usually dealt with towards the end of the campaign by issuing more shares. If you want to maintain your percentage, the founders can agree via a letter to transfer more shares from their holdings to keep your percentage at its current rate but that such an undertaking expires for any new raisings or after a specified time period.