Please note, this article is historic and Xinja’s equity crowdfunding raise is no longer open.
It’s on….another chance to own a piece of Xinja! Giddy up!
We are delighted to be able to again offer our Australians the opportunity to invest & share in Xinja’s future success. We were overwhelmed with the response to our first equity crowdfund (Australia’s first and most successful in fact 🙂
We’ve got off to a ripper start with our second crowdfunding raise – a big thank you to all those who’ve registered interest so far!
Since our announcement, we’ve been getting lots of questions, so we’d thought we’d share the most common FAQs for now, in one place.
Here are 12 of the most important things you need to know, now
1. What is equity crowdfunding?
Equity Crowdfunding (ECF) or Crowd-Sourced funding (CSF) is where the crowd (you, your mum, dad, regular people) invests in an early-stage business and in return they get shares (a stake) in that company. Through equity crowdfunding, they can do this before the company goes through an IPO (initial public offering – after which it is ‘listed’ and its shares can be purchased directly from the ASX etc.) It’s a chance to get in early.
“We are very keen for smaller investors to own a piece of the action. We want them to be in this from the ground up. We want their feedback and input. We want people to be involved.”
– Eric Wilson, CEO Xinja
2. What types of company can you invest in through equity crowdfunding?
Regulatory changes in Australia and New Zealand, have meant that now all investors can access early stage investing in public unlisted companies – this change occurred in January of this year (when we ran our first round) . From Sep 2018, equity crowdfunding is now open for all startups as the government passed laws for Australian proprietary companies too.
“It’s time Australians had access to a new kind of bank. One that serves their interests.”
– Eric Wilson, CEO Xinja
3. Who is Equitise?
Equitise is the Trans-Tasman equity crowdfunding platform, offering global companies a way of raising capital in Australia and New Zealand. We’ve partnered with them again as they did a great job last time. The Equitise platform streamlines the investment process by facilitating the entire transaction from conception of the offer to funding, and makes it easier to distribute the offer to a much broader audience.
4. How much does it cost to invest in equity crowdfunding?
Shares in Xinja for this second round of crowdfunding will be priced at $2.04 each, with a minimum investment of $255 required to take part. There are no other costs involved (e.g. no brokerage fees). The ASX on the other hand requires a minimum investment of at least $500, plus brokerage fees will apply.
For Australian Retail Investors the maximum investment is $10,000. For Australian and New Zealand Sophisticated or Wholesale Investors there is no maximum. If you are interested, this article sets out the difference between retail and sophisticated investors and some of the different protections and restrictions that apply to them.
5. Can anyone invest?
As long as you’re an Australian resident who can meet the minimum investment requirement, you can invest in equity crowdfunding.
6. Are there risks that you should consider before you invest?
Yes. Like any investment, Crowd-Sourced Funding (CSF) is risky. Investors may lose their money and the business may not achieve its objectives. You should consider the CSF offer document and the general CSF risk warning contained in the offer document in deciding whether to apply under the offer. Information about this offer will be set out in our offer document which will be available as soon as the offer opens. You should read this to understand potential risks before deciding to invest in us. For more information click here
“You should only invest what you can afford to lose. It is a start-up, and – confident as we are – things could go wrong.”
– Eric Wilson, CEO Xinja
7. How do I make money via equity crowdfunding?
Shares have already increased in value over 60% from the first funding round, from $1.25 to $2.04 a share. However, this is ‘illiquid’ -that means you can’t sell the shares on the open market (as the company is not listed) and there is no secondary market. You can sell shares privately – if you can organise that – however this is a medium term investment.
“We hope that as the company performs, your shareholding will also perform. In the short term, when we do turn a profit, we will be looking to put some money back into the business to grow it.” – Eric Wilson, CEO Xinja
8. Are there any tax benefits?
If you invest in Xinja, you might be eligible for a tax benefit. Broadly, if you invest in a qualifying early stage innovation company (ESIC), you may be eligible for tax incentives. If you are eligible, you may be entitled to a non-refundable tax offset equal to 20% of your investment amount and a capital gains tax exemption (Yeh!)
We believe Xinja is an ESIC company, as defined under Division 360 of the Income Tax Assessment Act 1997. However, Xinja has not obtained a private ruling in this regard, and recommend that you undertake your own analysis and seek independent advice before claiming the incentive. More information can be found on the ATO website!
Just to be clear, this information does not constitute or convey advice. If you have any other specific tax questions please contact the ATO.
The most fascinating part of the whole exercise for us was learning just who it was joining us on our journey
9. How did Xinja do in its first crowdfund Jan-Mar 2018?
Total raising: – We raised $500k in 18 hours, $1m in one week and over $2.7m in total ($2.4m from retail investors and a further $0.3m from sophisticated investors via the platform).
Number of investors: 1,222
The average investment: $1876.54
Most common investment: $250 was still the most common investment with 26.5% of investors.
Investment range: 67.7% of investors invested $1000 or less. Investor snapshot: 37.8% of investors were 25-34 year olds, however 55-64 invested most overall. 82.4 % of investors were men.
We achieved $500k in 18 hours, $1m in one week and >$2.7m in total
10. What is Xinja hoping for in this crowdfund?
This time we’re targeting a raise between $500,000 and $5 million.
11. When will I be able to invest?
The actual offering will not be available for a few weeks, but please register your interest now and we’ll make sure you know the moment the ‘deal room’ is open. Previous investors, Xinja customers and those who register interest ahead of time will get early access to the deal room once it’s open.
12. Where can I get more information about Xinja’s crowdfunding?
When the ‘deal room’ opens on Equitise, the CSF offer document will be available containing lots of information about Xinja; if you are considering investing, read this document carefully.
Please note: Like any investment, Crowd-Sourced Funding (CSF) is risky. Investors may lose their money and the business may not achieve its objectives. You should consider the CSF offer document and the general CSF risk warning contained in the offer document in deciding whether to apply under the offer. Information about this offer will be set out in our offer document which will be available as soon as the offer opens. You should read this to understand potential risks before deciding to invest in us. For more information, click here.