Social Enterprises Making the Most of Equity Crowdfunding
2 October 2018 at 5:13 pm
Equity crowdfunding has been labelled the way of the future for social enterprise, with one community-owned renewable energy retailer raising over $500,000 to expand across Australia.
Enova Community Energy’s equity crowdfunding campaign on Crowd88 has raised $512,499 one day before it’s due to wrap up on 4 October.
While it has fallen short of its target of $600,000 to $3 million, Enova chair Alison Crook AO said this was not surprising, adding that the board would consider extending the campaign.
“As with all campaigns it’s dependent on publicity and it’s taken us a while to ramp this up,” Crook told Pro Bono News.
“So this is actually par for the course for the first leg of any sort of fundraising campaign, and it was the same for our previous capital raise.
“The board will make a decision on the completion date. But we do have the right to extend it by 45 days.”
Crook said equity crowdfunding – which allowed businesses to raise funds from the public, in return for equity in the company – offered Enova the chance to reach more of the community and Australians the opportunity to own a part of their own retailer.
“It’s now possible for people not just to own the power on their own roof but also a chunk of their own retailer, and that’s what we’re trying to do with a minimum investment of only $100 for 100 shares,” she said.
Enova Community Energy has taken part in the 1st online crowdfunding campaign whereby you can become a shareholder in our unique social enterprise. Always consider offer doc before applying for shares & general risk warning for Crowdfunding: https://t.co/zMDKMumwTN pic.twitter.com/BUkZHYokYE
— Enova Energy (@EnovaEnergy) October 1, 2018
While equity crowdfunding has existed in the UK since 2011, it was only last month extended to private companies in Australia.
This form of funding is expected to remove barriers to growth in the social enterprise scene and Crook said it had a lot of potential for social enterprises in Australia.
Enova managing director Tony Pfeiffer went a step further, telling Pro Bono News it was the way of the future.
“It’s an excellent way to raise funds. Besides advertising it’s quite low-cost and the risk for the investor is minimised through online platforms. In the future, it will be the way forward for social enterprises,” Pfeiffer said.
“But the challenges we’ve faced and others will face is actually getting the message to cut through to the crowd effectively, and attracting people who are interested in what you’re putting out there.”