SME Funding is currently 95% Debt & 5% Equity. This imbalance leaves businesses without choice, flexibility, constrained to poor outcomes, and often without access to funding to grow and employ more Australian workers.
Lellco believes the ratio can be 70% Debt : 30% Equity.
After 20 years of experience directly advising SME clients on funding matters and having raised over $1 billion of equity and $5 billion of debt funding we have realised that our place is no longer to provide the direct advice, but to further empower SME owners and managers, their advisers and their investors.
That is why Lellco no longer provides direct SME Funding advice and instead has created Self Managed VC Funds and AuSMEquity.
Collaboration creates Scale
Lellco is a professional advisory and administration business providing services in investment monitoring, decision making, and reporting.
Our diverse management and the investment panel of Purpose Driven Capital provides a wealth of supplemented knowledge and networks in addition to that of the investor’s own.
We seek to fill the Sustainable Enterprise Fund and subsequent funds so as to achieve scale benefits in operating costs and in the services we can provide, for example in dedicated economic research and analysis of macro and micro economic factors impacting investees. There is also a significant focus on our technology platform and how it will be able to deliver even more value to all stakeholders.
Lellco operates on social principles, meaning executive income and owner returns are capped so as to ensure benefits are flowing more evenly to all stakeholders, thus the willingness and ability to direct more of net revenue into the development and delivery of stakeholder services and our Purposes.
Collaborations
Along with the many expert direct SME investors across Australia there are also some excellent groups, networks and platforms that already provide invaluable direct SME equity investment services.
Lellco, AuSMEquity, and Self Managed VC Funds are complimentary to those groups, networks and platforms and we offer services to assist them in maximising the benefits we can collaboratively provide to Australian SMEs.
Investors
We want to encourage as much SME Equity funding as possible, including from as many investors as possible, which is why AuSMEquity is available for any potential investor to view and directly receive enquiries.
However, not all investment opportunities will be open to all investors. AuSMEquity listings will detail when an investment is restricted to certain investor types. Similarly, Self Managed VC Funds currently have to be restricted to Corporations Act defined ‘sophisticated’ or ‘wholesale’ investors.
It is unfortunate that we need to restrict SMVCFs in this way but the compliance costs associated with dealing with other investor levels is too prohibitive at this time.