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Explore, compare and contrast different sources of capital

Compare debt and equity sources of capital and consider private equity sources of capital including venture capital

One of the biggest challenges facing the majority of start-ups is the difficulty in securing sufficient capital to achieve the grand ambitions of the founders. Often, it is difficult for smaller companies, particularly if they are not cashflow positive, to be able to demonstrate a stable business model, and many investors consider this type of investment high risk, hence raising capital through debt funding is very difficult.  The majority of start-ups are often funded by the founders and close associates, and in the case of some larger start-ups, more risk-tolerant venture capital investors are likely to support the business by accepting equity, with the view that eventual listing of the company will provide an exit opportunity to hopefully monetise some capital gains.

During the current economic climate, even many larger organisations are finding it difficult to rollover short-term debt and are being forced to issue heavily discounted debt to shore up their balance sheets.

Debt vs. Equity – Advantages & Disadvantages
Determining the most appropriate source of capital for your organisation is often dependent on whether you are willing to give up a share of future profits of your company and potentially decision making authority by issuing equity. Whether your organisation would prefer not to dilute existing shareholders by issuing additional equity, with the trade-off being that your organisation will need to make regular interest payments to service debt-based financial loans.

How can Activated Logic help?

Activated Logic is experienced in assisting organisations develop attractive funding strategies to attract investments from financial institutions, capital markets in general and other potential sources of capital including exclusive private equity opportunities. Activated Logic maintains a portfolio of direct equity investments in numerous Australian, Asian and North American companies, and has formal investment agreements with a network of investment professionals including brokers, fund managers and investment banks.

Through the application of alsiam™, Activated Logic’s - Sequential Investment Assessment Matrix, the appropriateness of debt or equity derived capital sources or other hybrid structures such as convertible notes are independently assessed.

Through member directors, Activated Logic is actively involved with the Australian Private Equity & Venture Capital Association Limited (AVCAL), and work closely with the Australian Small Scale Offerings Board (ASSOB) to assist companies raise capital.

AVCALAustralian Private Equity &Venture Capital Association Limited
The Managing Director (Mr. Bahay Ozcakmak) along with other directors of Activated Logic, are active member of the Australian Private Equity & Venture Capital Association and maintain close working relationships with many of Australia’s most respected fund managers and private investors. Visit AVCAL www.avcal.com.au.

ASSOBAustralian Small Scale Offerings Board
ASSOB is Australia's largest unlisted securities platform that showcases investment opportunities in high growth unlisted companies. Currently the combined value of companies listed on ASSOB (based on last sale share prices) is in excess of $500M. Not only can you access early stage investment opportunities through the ASSOB platform, but you can buy and sell shares in other unlisted companies or buy and sell units in unlisted property trusts. Inside there are investment opportunities available across a range of sectors including mining, energy, education, entertainment, green technology, bio technology, ITC and more. All companies listed on ASSOB are independently audited and subject to listing and disclosure rules that ensure ongoing disclosure and communication with stakeholders. Visit ASSOB www.assob.com.au.

PRIVATE EQUITY – Activated Logic holds a portfolio of significant investments including strategic stakes in Australian, Asian and North American companies, through numerous investment vehicles including but not limited to investment by Activated Logic Pty Limited and the Activated Logic Superannuation Trust.

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