Brutal honesty and collaboration: Life after an equity crowdfund raise

Manrags co-founder Michael Elias has spent the past week preparing to welcome 177 investors on board his business.

The Melbourne-based underwear subscription business, which Elias founded with his wife Tina, successfully raised $363,000 two weeks ago through an equity crowdfunding campaign.

The raise elevates Manrags into a small cohort of businesses that have successfully closed off this type of fundraising since licences were issued to equity crowdfunding platforms in January.

“We hadn’t even run a capital raise to begin with, and just going down the path of a capital raise is quite full on,” Elias says.

A new type of investor

Now the process is complete, Manrags will be one of the first companies to grow a business with this new type of investor on board.

The company wanted to raise at least $300,000 by selling shares at 50c each. The business turns over more than $500,000 a year and now has more than 100 individuals on board owning equity stakes of as little as $250.

At minimum, Manrags now has to provide these investors with access to annual financials, but Elias says the plan is to form a much closer relationship with them.

“We want to leave it in their hands but say, hey, if you think there’s collaboration opportunity, that’s the whole reason we are going have been going down this path – so they [can] be advocates of the brand,” he says.

“We said, please don’t give us money you can’t afford to lose… that was the only way I could sleep at night.” Eric Wilson

Already, a number of Manrags’ crowdfund investors have reached out to discuss how they can work with the business to help boost brand awareness, he says.

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