Connecting For Investment
Are you a Tech Startup? By this we mean early stage business in mobile, internet trying to find equity investors or other funding to grow a potentially scalable (ideally global) product.
List yourself on sell/borrow side of the registry.
Are you an equity Investor or Lender? By this we mean you have experience (e.g. professional investor) and typically a small part of your portfolio that is looking for diversity into high risk and potentially high return opportunities in disruptive tech startups as an equity investor or as a lender?
List yourself on buy/lend side of the registry.
Intermediaries, facilitation platforms (e.g. crowd funding), exchanges, banks, brokers, advisors and the like are also welcome to list here. The form above is the same for all stakeholders (buy side, sell side, intermediaries), it is just completed with different perspectives.
There is still an enduring unmet need for small companies to fund early stage growth. Here at StartSoc we are asked to help all the time. So we created StartReg a register of buyers (or lenders) and sellers (or borrowers).
Traditional mans of reaching capital markets are effective for larger firms but not for tech startups in the very early stages. This disadvantages both the startups themselves and the potential returns for investors prepared to take high risks.
History & Modern Context
From 1285, the Dutch organised trading location Huis ter Beurze helped merchants exchange valued goods. The derivative name Bourse was used from 1550 to 1775 in England eventually becoming known instead as the Royal Exchange.
With a rich history dating back to 1861 the ASX (now the Australian Securities Exchange) has been the centre of capital markets for well over a century, and our team was glad to be part of their innovation back in the day. But over 150 years later (and despite regulators attempting to encourage competition) disruptive innovators and suitable investors still need a much simpler, faster and cost effective way to help create (and benefit from investing in) the next tech unicorns way before they reach anything vaguely recognisable as a potential securities exchange listable business.
The Start Registry (also known as StartReg or The Start Register) at R414 Royal Exchange Sydney NSW 2000 is a service created in 2015 by The Start Society to help investors find potentially global tech startups and to help early stage tech startups find investors.
We are not a matching mechanism, we are not an advisory service and we are not a stock exchange but we do intend longer term to become a meaningful simplified marketplace for early stage investment for anyone anywhere over the internet starting right here but with a focus on disruptive innovation tech startups because they are the most leveraged way to create wealth and social impact.
For now we just help you help yourself for free or nearly free (certainly fees we are contemplating imposing will be around one tenth of alternatives). Later we might grow into an actual marketplace.
What Does StartReg Do?
We are a register (or list) of counter parties to facilitate self-service.
- Discover (companies, individuals, buyers, sellers, investors, investments, bids, offers)
- Transact (agreement and settlement) between counter parties that buy / sell and
- Publish (current or future state transparency) current holdings, bids, offers and trades
How Much Money Is Involved?
For a single raise (or loan), as a guide, we expect enterprise value and total transactions in one entity (for example a tech startup raising seed capital, A round or B round) to range from –
- $50K to $5m (Seed stage, A rounds, B rounds) in the short term (to 2015-2016)
- $5m to $50m (B rounds, C rounds, D rounds) longer term (2016-2017)
- $100m+ (late rounds and IPOs) to eventually (say 2017+) to meet the full range of needs
But of course later stages are hard to predict and clearly traditional capital markets are meaningful but rare options for IPO (initial public offerings) right now … yet there are still ‘broken’ parts of the capital markets where Australia which ranks 3rd or 4th in funds admin globally (with over $2 Trillion in super and related funds) but still does not generally invest materially directly into tech startups, instead we invest via overseas facilitators or not at all.
Individual transactions have no hard lower limit but in practical terms we expect investors to trade infrequently (say 10-100 times per annum) and typically higher stakes ($20K to $20m) although small investments ($1-2K) are possible.
Who Can Use Registry Services?
Typical stakeholders or participants will be buyers and or sellers who will be –
- BUY SIDE: buy / bid / supply / offer funding capability directly or indirectly (e.g. financial institutions, superannuation funds or angel investors with funds for equity investment or unsecured lending) currently only experienced larger investors/lenders because they understand the risks are extremely high with this type of investment
- SELL SIDE: sell / offer / equity for purchase / demand for funding / need for funding – funding capability directly or indirectly (e.g. an early stage tech startup founder entrepreneur looking to fund their next stage of product development and/or business growth) currently only early stage tech startups because they are able to target global niche markets and are hence high risk (less than 5% chance of positive exit) and high reward (often highly leveraged impact on thousands or millions of users/customers) which makes traditional methods ineffective for their needs
- LIFE CYCLE AGNOSTIC: either side may operate in the primary (initial offering) market or the secondary (ongoing) market, the register does not discriminate (other than in the fee structure) but does track primary vs secondary for reasons of understanding liquidity by stage
- DIRECT: Intermediaries are welcome to add value but are not mandatory, unlike traditional stock exchanges.
There is no endorsement of any counter-party or stakeholder implied at any time and all participants should conduct their own due diligence appropriate to their risk appetite. There is generally no obligation to participate, discover, disclose, transact or publish at any time for any party with the exception of minor fee variations (unbundling charges) if you choose to not use the entire end-to-end service.
However if a participant does agree to do one or more of the above there may be fee based obligations imposed to cover unbundling (e.g. you can’t automatically transact here at the best price if you don’t do electronic self-service discovery here and you can’t do automatic electronic publishing here at the best price if you don’t transact here).
Basically, the more you use the register, the better value it becomes. We reward ongoing involvement.
The Start Registry follows simple steps, we call it a ‘circular value chain’ that is conducted end-to-end and then repeated. You can get off the merry-go-round at any step without obligation. It is best described –
Register > Validate > Publish > Discover > Transact > Settle > Validate > Publish > Repeat
Try StartReg free now using the links above or contact us.
Our pricing is exceptional due to –
- lean approach
- end-to-end integration planned
- self-service (and automation planned)
- limited (striving for zero) exception management
- internet delivery
Fees are 0.0% although during the six month MVP/beta phase however there is a 0.1% suggested donation from each counter-party for a successful outcome (raise or loan or third party service provision). Longer term at a later date (2016+) this is likely to be closer to 1% from each counter-party as a fee levied at transaction time.
Worked example: So, for a startup that is raising 300K and ends up being oversubscribed with 500K evenly from 5 investors (100K each) the fees payable are zero and the suggested donation is $500 from the startup and a further $500 ($100 each) from the investors all ($1000 total) payable by the startup (as recipient of the funds (for simplicity) and it is paid entirely from their side (for simplicity).
Try StartReg free now using the links above or contact us.
Next Steps for StartReg?
Assuming we can raise $10m over the 6 month MVP/beta period this would be $100K revenue towards a StartReg on StartReg campaign to raise $2m to build the real platform.