Obtaining equity through crowdfunding.
We know that equity crowdfunding might be new to some Wanderers, so let’s shed some light on what equity crowdfunding is, and what it isn’t.
Where can I find the details on Wander’s equity crowdfunding offer?
Check out our campaign profile here
What is equity crowdfunding?
So you’ve heard of Kickstarter, right? That’s reward-based crowdfunding, where you make a ‘pledge’ to help get something off the ground in return for a nominal reward, like a t-shirt or a product pre-order. In equity crowdfunding, you are investing in a private, Australian business (Wander) and receive a shareholding—essentially becoming a part-owner.
Who is Birchal?
In Australia, companies run their campaigns through an ASIC- approved platform, like Birchal. We’ve partnered with them so the investment process is safe, secure, and (almost) as easy as enjoying Australia from the comfort of a WanderPod.
Given the exciting trajectory of Wander so far, we have a proven business model, a product Australians love, and a strategic plan to scale up. More importantly, however, we feel a keen obligation to bring our most loyal Wanderers along on this journey, offering an opportunity to engage more meaningfully with our mission while sharing in the fruits of our labours.
What is the expression of interest campaign?
Each crowd-sourced funding campaign on Birchal begins with an expression of interest, where companies ask for non-binding indications of interest from the public. It gives potential investors the chance to review the company’s pitch profile and video, attend a webinar, get updates from the founders and gain information on results-to-date and the plans for raising. It also gives investors the chance to receive priority access when the offer goes live, and avoid possibly missing out should the offer reach its max target during the priority access period. Other benefits may also be offered by individual companies.
What is a CSF offer campaign?
A crowd-sourced funding offer campaign follows the expression of interest campaign. It is when companies make an offer of fully-paid ordinary shares in the company via Birchal’s platform. During the Offer campaign potential investors get to review the details of the CSF offer document, and ask questions directly to the founders. There are usually two parts to every CSF offer campaign — a ‘priority access’ phase given to those that submitted an expression of interest, and a public phase, when anyone can gain access to the deal.
Why ‘express interest’ now?
Our 3-week Expression of Interest (EOI) campaign is an exclusive opportunity to be among the first to invest. By expressing interest early, you’ll gain access to our offer before it goes live to the public. Join us on our Birchal page, and be part of this groundbreaking journey.
How much can I invest?
Anyone over the age of 18 years can invest from as little as $250 and up to $5m, depending on the terms of the offer. To invest over $10k, you need to be a wholesale client, which you commonly qualify for by having at least $2.5m+ in assets or $250k+ gross income for the past two financial years, evidenced by your accountant.
Where does my money go?
During our Offer Campaign (where you can invest), Birchal will hold all investor funds in a trust account until our capital raise is successful and past the closing date. From there we’ll work to issue your shares and Birchal will transfer the money to us to use in our future business plans (outlined in the Offer Document).
How does ROI work with equity crowdfunding?
Equity crowdfunding investment is a little like planting an avocado tree. You plant it, and then wait 10 years for it to bear fruit. Crowd-sourced funding is risky by nature, as issuers (companies) using this facility are usually new or rapidly growing ventures.
Investing in private and unlisted companies is typically a medium to long-term investment. Shares in the companies who raise through Birchal cannot be easily transferred or sold as they are not traded through public exchanges (i.e. the ASX). Due to this, your shares are generally considered to be ‘illiquid’ so you may not be able to sell your shares quickly if you need the money or decide that this investment is not right for you.
However, there are numerous possible circumstances that may create an opportunity for you to “exit” your investment (i.e. sell your shares) or otherwise receive returns. Such as:
- a trade sale of the company to another company
- the company proceeds with an Initial Public Offering (IPO) and listing on a registered stock exchange (e.g. the ASX)
- the company organises a buyback of the shares
- a private sale of your shares to another person
- the company pays shareholder dividends.
The options available to shareholders will be mentioned in our company Offer Document at the time of investment, but we can’t guarantee that any of the above options will occur. Our vision and plan is that our company value will have increased in the event of an ‘exit’, so when that time comes your shares will have gone up significantly in value.
The obligatory legal disclaimer
You may lose your entire investment, and you should be in a position to bear this risk without undue hardship. Even if the company is successful, the value of your investment and any return on the investment could be reduced if the company issues more shares. Ask questions, read all information given carefully, and seek independent financial advice before committing yourself to any investment.
What entity can I invest under?
You can invest as an individual, trust, or company (including SMSF).
What is the difference between a retail and wholesale investor?
Depending on whether you’re a retail investor or wholesale investor, it will determine how much you’re able to invest in the equity crowdsourced funding campaign. See more here.
What rules and legislation governs equity crowdfunding?
- Crowdsourced Equity Funding (also known as Equity Crowdfunding) is governed by legislation that is covered by ASIC (RG 261) and can only be facilitated through licensed intermediaries (ie. birchal.com).
When and how will I get my shareholder certificate?
You’ll get your share certificates about two weeks after the campaign finishes, once funds are collected. The company you’ve invested issues the shares using a share registry provider, so you’ll get an email about it following the close of the campaign.
Are there tax implications with an equity crowdfunding investment? What about if I want to invest from a country outside Australia?
The normal rules apply to your investment in a company via CSF when tax time comes, and we recommend investors consult with an accountant depending on their unique circumstances. If the company on Birchal offering the shares is an E.S.I.C (early-stage innovation company), there may be tax incentives for you as an investor.
Investing from outside Australia? Read this first.
We’re genuinely excited about offering you this opportunity as we continue our mission to change the way Australians live and work in the world—beginning with how we travel.