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VentureCrowd CEO Steve Maarbani expects three or four companies out of the crowdfunding platform's 150-plus deal portfolio to achieve a liquidity event in 2025, claiming "both sides of the equation are very buoyant" with good signs of growth.
"The last two years have obviously been well recognised as difficult for and challenging for the listed markets, but what we're seeing right now is a lot of those companies begin to reposition an exit," he tells Business News Australia.
"I think one of the most exciting things about this year is we're seeing a lot more investors coming into the space, and at a macro level what we’re seeing is the public markets are on the decline.
"A lot of value being created in the market, in the corporate securities space, is happening in private companies. Where you once went to the stock exchange for a diversified view of a national economy, that’s not the case anymore, because fewer and fewer companies are listing."
Maarbani's comments come after VentureCrowd reported a 137 per cent return on its investment in founder-led emergency management software provider CriticalArc following its sale to Five V Capital.
Known for its flagship emergency management platform SafeZone, Sydney-founded CriticalArc helps security and safety teams efficiently manage daily operations and respond rapidly to critical incidents, covering sectors including higher education, healthcare, infrastructure and government.
In 2015 VentureCrowd raised around $1 million for the startup from 15 investors, two years prior to crowdsourced funding (CSF) regulations that enabled broader, retail investor-based crowdfunding raises.
"This wasn’t on a deal that involved mums and dads putting 50 bucks into a brewery or investing in a T-shirt company or something else typically associated with crowdfunding," Maarbani quips.
"What that shows is that crowdfunding today is becoming more and more a part of the holistic private capital mix, and CriticalArc is a really good example. CriticalArc had a syndicate of Sydney angels, it had one of the Artesian funds, and then it went through VentureCrowd.
"What it highlights is is the importance to the crowd having access to this kind of innovation because founders will have ultimately more choice – they’ll have more access to money for more people, with decision-making much more diversified."
He points to a broad spectrum of investors wanting to participate in private capital markets, and not just institutional investors, high net worths and family offices.
"I think that the key trend is really the movement away from crowdfunding being a marketing exercise for companies looked at as a reward-based investment, and more the trend that millions of newly minted angel investors are using the digital investment platforms like ours, crowdfunding, to diversify their portfolios into quite significant and important value-generating private assets," Maarbani explains.
"We’ve seen this coming for a long time. We've built the business based on that; not just retail crowd funding."
He says that VentureCrowd's brand "has always stood alone" in the Australian crowdfunding space, occupying a different space to Birchal which has a stronger consumer retail bent.
"Equitise was focused probably a little bit more broad than that, but still very much focused on the retail crowd funding space," he says of the platform which went into administration late last year.
"VentureCrowd has never believed that retail crowdfunding for consumer-based businesses alone is a significant enough value proposition for either the founders or the investors.
"If you’re an investor, what you’re looking for is access to good, solid, private deal flow – you’re not just looking for taking a punt into a brewery."
He says VentureCrowd has been developed on the basis that it would provide "solid quality deal flow".
"That might be retail, but it might also be wholesale; it might be ordinary shares, but it might be preference shares, convertible notes and safes," he says.
"Anything that you can get at venture capital first, you can get through us, and that’s how we built it.
"The administration of Equitise has had no impact on us, really, because our focus has always been significantly different. Possibly that’s why we’re still here."
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