Minter Ellison partner Jeremy Muir

The platforms are getting more enquiries from companies that are interested in private or wholesale investor offers, rather than opening it to the public.

“Companies may prefer a private offer if they have a specific group of people that they want to invest, or they want to avoid the risk of an unsuccessful public offer, or they’re not yet ready to scale and want to keep their publicity powder dry,” Snowball co-founder Josh Daniell says.

Snowball is currently running a $4.97 million private offer for mortgage broker and peer-to-peer lender Squirrel.

PledgeMe has also recently started offering private equity crowdfunding campaigns, after seeing the demand was there.

“Just under half of the campaigns we’re currently working with are looking at locking down who can see their offer,” says founder Anna Guenther.

“Wider investor bases are good if you want to pull in more people but, if a company knows its crowd and knows the people who are going to be interested in investing, then a private round is a good option.”

Minter Ellison partner Jeremy Muir says it’s a case of the platforms developing their business models as they realise they’re good at dealing with lots of subscribers and handling funds electronically.

“They’ve gone out and decided they can market those services more broadly than just large scale public offers.”

He says there’s a potential for more deals to be marketed internationally, such is the case with the current deal for Switzerland-based Skins, which is raising money in New Zealand and Australia through Equitise and in Europe through Seedrs.

“The most exciting development at the moment is the potential for truly global deals. Doing cross-border deals is difficult, given securities laws are very nation-state-based, but if you start to combine cross-border platforms, with international law firms, with globally mobile capital, interesting things start to become possible.”

But while some parts of the equity crowdfunding market are booming, others are struggling – such as in the case of the My Angel Investment platform, which decided to shut its doors this week after failing to attract enough funding.

It is certainly a crowded market and, with the Financial Markets Authority currently assessing three applications for new platforms, about to get hotter.

“What we’ve seen to date is a number of platforms trying to do similar things in trying to capture the growth start-up market and they’re all obviously looking for deals. Those that are late to the party have found it more difficult, and of course, the capital needed to run the business – unless you’re privately funded – follows success,” Mr Muir says.

“We’re at the stage where platforms are looking to do different things and I think targeting areas such as property is probably what we’re going to see going ahead.”

NBR