The Gold Coast start-up scene has moved beyond infancy and is finally hitting its stride, according to venture capitalist and crowd funding specialist Erez Rachamim.
The head of fundraising at Equitise is well placed to make that call. He works closely with Gold Coast companies seeking equity funding to grow their businesses.
“Like the rest of Australia, the start-up scene on the Gold Coast is not in its infancy; it’s totally starting to run,” says Rachamim, who was among an elite group of entrepreneurs speaking at Gold Coast Business Week’s signature Way Ahead event on Friday 12 July.
Rachamim says apart from the natural assets the city has to offer, the Gold Coast start-up sector is well supported by strong government initiatives that are helping bring more businesses to the city.
However, he believes an easing of Australian crowd-funding regulation will accelerate the pace of growth as more start-ups and established companies gain access to vital equity funding.
The Sydney-based venture capitalist is a regular visitor to the Gold Coast, running the ruler over balance sheets, financial models and business plans and then assessing a range of soft skills such as leadership of various companies.
His recommendations help determine whether entrepreneurs secure the funds their start-ups need to grow. It’s a numbers game that Rachamim and Equitise take seriously.
“Last year we went through 700 companies and represented about 10; this year we will probably do about 30,” says Rachamim.
Equitise began operations in New Zealand but its portfolio has expanded since federal parliament eased the crowd-funding rules in January 2018 to allow Australians over 18 years of age to invest in early-stage companies.
Although it was primarily founded on the principles of crowd funding, Equitise also has a depth of sophisticated and institutional investor contacts.
“I have a very challenging role, but I also have a lot of fun,” says Rachamim.
“What I care about is whether I can help to get a good outcome, and is it a good business. That’s a highly subjective thing. We don’t just deal with start-ups; we also deal with companies that already pay dividends. They could be turning over $100 million.
“We certainly work with companies on the Gold Coast, all over Australia and New Zealand.”
Rachamim says Equitise itself is in the early stages of growing its business to open the gates for more start-ups to readily access working capital.
“If we can create a profitable intermediary, a sustainable one that’s doing it with integrity, you will see hundreds and thousands of businesses stand to benefit from this capital market,” he says.
However, before entrepreneurs even consider sharing their budding business with capital partners, Rachamim has a word of advice.
“There’s a big fallacy around capital raising with entrepreneurs,” he says.
“You find time and time again that people say they need money. There are a lot of things you can do without money and ideally if you don’t need it you will retain the entire equity of your business.
“To me that’s the most valuable thing you have as an entrepreneur, the equity percentage you hold in your business.”