Stephen Crowe answers
your common ESIC questions
Early Stage Company
No. Being ESIC ready is open to all innovators, business creators and those looking to grow their existing business, not just your neighbour who spends each week dreaming up the next big game changer and telling you about its high growth potential.
An existing company selling products and/or services to customers, earning an income and even making a profit can qualify as an ESIC.
It is essential an Early Stage Innovation Company (“ESIC”) meets eligibility criteria under Australian tax laws. A company that satisfies the early-stage test and either the 100-point innovation test or principles based test will qualify as an ESIC.
The concept of investment risk is not used to qualify an ESIC.
ESIC benefits can flow to those who have spent time building a business from scratch, testing it in the market, saving costs wherever they can and eking out a living. ESIC benefits are open to all sectors of the economy, not only those with high-growth potential.
Being an ESIC unlocks new avenues to capital and accelerates your new funding. From 1 July 2016 being an ESIC is important because investors in your early stage company will receive government mandated tax incentives to invest new equity capital into your venture. This broadens your investor community beyond the angel and venture capital investors traditionally reserved for the privileged few. Your family, friends, employees and suppliers who invest in your early stage company can also obtain the tax incentives if your company qualifies as an ESIC.
Early Stage Investor
In essence the key concept here, the take-home message is, if you’re looking to raise capital, you need to be considering your ESIC status. What does that look like?
As we mention there’s three concepts. The key concept in terms of accelerated capital raising, the way to quickly raise capital, is to be ESIC ready. What we’ve done at ESIC Hub is created three concepts:
You’ll be ESIC ready that means that you’re ready to go and raise capital and engage in informed discussions with informed serious investors. We have investors connected at the hub that are looking for very good investment opportunities. The starting point is that they need companies that are ESIC compliant or ESIC ready….