Support in numbers is something I have learnt a great deal about this week when I reflect on my trip to Canberra to meet with various government officials to discuss the current execution timeline of crowd sourced equity funding (CSEF) in Australia. All in all it was a very positive day for the development of the industry and Equitise looks forward to continuing to work with government officials into the future to expedite the process of CSEF in Australia. The day kicked off with a 5.30am alarm ringing in my ear, I was on the dual prop flying Kangaroo by 7.40am and landing in Canberra by 8.40am with fellow industry stakeholders by my side James Bond (Chief Economist of the Financial Services Council) and Ben Heap (CEO of AWI Limited). Treasury The first meeting was with Treasury at 9.30am where we met with the team that is driving the review process of researching, analysing and assessing CSEF globally. These guys have also been pulling apart the CAMAC paper over the past four months and considering its recommendations. After meeting with Treasury it was obvious that they are advocates for the rollout of CSEF in Australia. For those that are wondering, the role Treasury play in the process (apart from forming a position on the current state of play globally) is to essentially draft the regulation impact statement when the federal government decides to take a stance and press forward with expediting the legislation. It really was a pleasure meeting with the team driving this in Treasury and sharing our collective thoughts as key stakeholders in the process from both an intermediary (Equitise), an investor (Ben Heap/AWI Limited) and an industry representative’s perspective (James Bond). The great news is that it seems the stakeholders and Treasury are very much on the same page with thoughts on the CAMAC proposal and potential paths forward for this exciting new asset class that I am very confident will be developing in Australia sometime next year. We left Treasury at 10.30am and made our way to the front doors of Parliament House. Industry Our next meeting was with the senior advisers to Minister of Industry, Ian Macfarlane, where we discussed the “potential” release of an innovation paper, the same paper I was chatting to Malcolm Turnbull about just a couple of weeks ago that summarises ways to improve/innovate our digital economy (including the issues with employee share options – ESOP). I got the strong impression that this will be released any day now and am guessing it has been held up due to other important breaking news – completely fair enough. It was hugely productive chatting with Minister Macfarlane’s senior advisers and hearing the government’s positive position on CSEF. Without being able to divulge much information about the exact position of industry, it was obvious that CSEF is being embraced internally and is 100% supported by industry. Small business We wondered across the hallways of Parliament House to meet with the Small Business Minister Bruce Billson and one of his senior advisers to discuss his thoughts on CSEF and its importance to the Australian small and medium-sized enterprise community. Minister Billson is understandably a huge advocate for this method of alternative financing for businesses across Australia. With more than 30% of the two million SMEs operating across the country not having access to expansion financing for their businesses last financial year, Minister Billson certainly understands first-hand the difficulties faced by fledgling Australian enterprise. After meeting with Minister Billson it quickly became apparent the support for CSEF was strong in a number of facets of Parliament House. I guess the question on everyone’s mind is, if there is huge support, why isn’t it moving faster? Essentially, it is in retrospect. Just not as fast as key stakeholders would hope for. What we need to understand is that this is a new asset class, it is risky for investors and the government just wants to ensure that they do it properly the first time around. As opposed to having a quick and dirty shot at it, not getting it right and then having to disrupt an emerging industry with another change in policy one year down the track. A word of advice though, key stakeholders in the CSEF space need to band together to grow the number of voices in this space. As you will likely take away from this blog post, government is well aware and very supportive of CSEF; however, what we are lacking is absolute urgency to get it pushed along faster, but in a positive way. Chris Gilbert is co-founder at Equitise. This post originally appeared on LinkedIn.
A wealth management program and an app that helps newcomers make the right investment choices are among the startups selected by AWI Ventures to take part in its Fintech accelerator program. The company has invested $100,000 in each of the four startups and will allow them to spend six months at the AWI offices in Sydney’s CBD to further develop their products and business plans. AWI Ventures chief executive Ben Heap said in a statement he hoped Sydney would become a major centre for financial services technology. “Australia is a global player in financial services with the second largest banking system and the fourth largest savings pool in the world,” he says. “It makes perfect sense that we should be leading the world in the fin-tech space.” The startup founders were chosen from more than 80 applicants across the country. “We were pleased by the number of applicants for our first intake into the program and were thrilled to have so much interest from every state in Australia and several international locations,” Heap says. The four selected startups are: 1. Debt to 10k 2. Equitise 3. MacroVue 4. Simply Wall St Applications are currently open for the next accelerator program intake and close on September 20.
AWI Ventures’ financial technology fund has poured $250,000 into online investment startup Stockspot, in its first investment since launching last month. AWI Ventures is a subsidiary of ASX-listed Australasian Wealth Investments. They announced an accelerator program for financial tech startups, which will invest $100,000 in seed capital per company, last month. Stockspot will enable and advise people on creating a developed portfolio development available online. It will be Australia’s first entirely online investment offering. The offering is still in a private beta mode, but is set to launch to the public by the end of 2014. Stockspot founder and chief executive Chris Brycki told StartupSmart the fact it’s cleared many of the barriers to entry in the notoriously difficult to access financial services industry helped its investment case. “It’s a really hard industry for startups, with high barriers to entry such as legal hurdles and finding the right partners. We’ve done the ground work and are almost ready to go, which I suspect helped a lot,” Brycki says. Brycki, who quit his job as a hedge fund manager last year to develop his startup, says the $2 trillion Australian financial services industry is ripe for disruption. “The industry here is so large and hasn’t really been disrupted by technology to the extent it will and should be. Media, travel and retail are going online and changing how they’re structured, but financial services still streams through the say traditional paths.” According to Brycki, these traditional paths involved a range of players, each charging fees (a practice known as “clipping the ticket”), meaning direct tech solutions can be considerably cheaper and easier to manage. AWI Ventures chief executive Ben Heap says in a statement it expects Stockspot’s product to be well received, particularly by self-managed super fund trustees. Stockspot is currently a team of two, Brycki and a developer. The funds will go towards hiring and outsourcing engineering, marketing and social media management.
An accelerator with $1 million to invest in 10 financial tech start-ups has been launched in Sydney this week by Communications Minister Malcolm Turnbull. The AWI Ventures Accelerator Program is seeking 10 start-ups with teams of two or three in which to invest $100,000. The first intake will be selected in April and begin a 12 month program which includes office space and expert mentoring. AWI Limited chief executive Ben Heap told StartupSmart the financial services sector was ripe for disruption. “Our very strong conviction is there is a whole array of interesting ideas that should get going, but struggle to. This problem is especially acute in the financial services as it’s a heavily regulated market with complex business structures coordinated by an oligarchy of big banks so it’s problematic for new guys.” Heap says AWI Limited believes it is small enough to not be too constrained, but has sufficient size to gain access to expert and information networks start-ups need. Start-ups can apply armed only with an idea, but must be able to demonstrate their capacity to deliver the first iteration of their product to test the market within four months. “We’re up for seeing any kind of idea, but especially from people who are looking at the issues from a customer point of view, and can pitch a lay-down misere solution that customers will love,” Heap says. The teams are expected to raise a second round of capital in the first six months. AWI intends to support them to their series A round. “We have four of the ten largest banks in the world and an incredibly strong and globally powerful financial sector,” Heap says. “We’d like to think our initiative, together with what other people are doing, will provide a catalyst to allow a Silicon Valley-like hub to develop in this market,” Heap says. AWI Ventures is a subsidiary of ASX-listed investment company Australasian Wealth Investments Limited.