Aeronavics Ltd, a company making remotely piloted aerial systems (RPAS) or more commonly known as drones, has broken records in the speed and quantum in which it has pulled investors using the Snowball Effect crowdfunding platform.
The company has reached its maximum funding target of $1.5 million in less than a week after hitting the basic target of $750,000 within days of its offer being launched. The offer’s was to have run till March 14.
A day earlier (Feb 16) a total of 179 investors had put money in the company. About 7% of the investment has been from overseas. The average investment size was $5,500, the largest at $250,000 and many new shareholders who have invested $1000. By Tuesday (Feb 17) afternoon, over $1.48 million had been committed, and the campaign has reached its full target.
Linda Bulk, co-founder of the company says the management was pleasantly surprised by the whole experience. “We had an open mind about this form of capital raising, and didn’t have any expectation. This experience has been so enriching, it is so much more than just about raising the capital.”
She says the company has had such a warm reception from the flood of contact made by customers, suppliers and investors. “People have been emailing us and contacting us on the phone, that’s been really encouraging for us.”
The whole capital raising exercise has been a year-long experience for the company which finally opted to go with crowdfunding platform Snowball Effect. Yet, up until 6 months ago, the company had been preparing information to gather funding from angel or private investors to fund its growth, Bulk adds.
“We have been preparing information, to raise money the traditional way, until we got approached by Snowball Effect.”
She adds: “There is a perception that crowdfunding is high risk. But these people (Snowball Effect), have been very thorough in how we present out information document. They really challenge you to be thorough, that you present a realistic picture for potential investors.”
The financial numbers
Shaun Edlin, head of Snowball Effect’s company pipeline and services, say the speed which investors took up the offer was amazing. “We have had our largest investment to date and we have seen serious, large investors in this process.”
He reckons part of the reason is the high level of disclosures made by Aeronavics. “We have made sure, in all of the offers, that investors are provided with enough information.”
In Aerovanics’ case, the company has an existing revenue stream, an active customer base, and a ready following, he says.
Investors have also been asking Aerovanics questions on the Snowball Effect forum, some related to its strategy, some on its revenue pattern, and whether shareholders had any liability.
Aerovanics has said in its offer document that it will reinvest future profits in the company but “once the company starts to generate significant cash flows it will determine an appropriate dividend strategy.”