Accodex Partners, an Adelaide-based startup that provides a cloud-based freelance accounting platform, has been a Practice Ignition client business for some time and the latest news from their offices is that they’ve used PI for an alternate purpose.
In an earlier round of funding, Accodex Partners raised $180,000, attracting investors including Shawn Webster, Ben Longstaff, Harry Schiff, and Aaron Lepoidevin.
Today, Accodex Partners, has closed a round of funding that used PI to create, send, and sign contracts with investors, greatly reducing the amount of red tape involved in capital raising.
We tracked down Accodex Partners CEO Chris Hooper who filled us in on the exciting details of this innovative round of funding. Here’s what he had to say.
Practice Ignition: Why are you raising capital?
Chris Hooper: We're growing really fast; capital makes us grow faster. Moreover, we're building some pretty sophisticated technology to further drive automation in our business.
PI: Don't most accounting practices grow out of profits?
CH: They do, and that's how we've been self funding for the last four years. Considering the traction, we've been getting overseas, we wanted to pick it up a gear.
PI: What advantage will this new capital give your practice?
CH: It will enable us to further develop our technology and fuel our expansion overseas.
PI: Why did you use Practice Ignition to take care of your capital raising?
CH: Honestly the process of doing a private placement in Australia is an absolute nightmare. Traditionally you'd email a word document information memorandum or business plan. Then you'd get people emailing back saying, "Yeah I'm keen." You'd have to wait for all offers to come in before you can go to the lawyers to get documents prepared. Then those documents will be circulated via email. Investors would negotiate via emails. So many emails!
Finally, you'll get to a final copy that you'll circulate to investors. Some will sign execution panels electronically, some will print and post them. Then you've got to bring all those signatures into a final collation copy. And then there's the awkward bit about collecting cash. All the documents have been signed, you've done your part, but you need to end up playing debt collector asking, "Ummmm.... Where's that money you promised?" Once that's done you've got to post out share certificates, update your captable and notify ASIC. The whole process would take months to settle.
I had this idea one day, that we could create an online information memorandum and then use PI to generate all the contracts and collect payment. In doing so we will massively cut down the time to process the round and reduce the overall round size. Considering we opened 1 February and are closing 29 February, I would say it's mission accomplished.
PI: We heard rumours that you're going to use this R+D to help your clients with their raising in future and to track the prospective, converted + banking of investors. Care to explain?
CH: We assist as advisers on these types of deals a fair bit, that's why I've been so frustrated with the process. This isn't the first time we've taken a crazy idea, tested it internally then spun out a client use case afterwards. The feedback from clients has been great. It's always along the line of, "Damn, I wish I had this for my round..." So yeah, we'll be productizing the service.
PI: So, how much more are you looking to raise?
CH: We're raising $500,000 this round and we're laying ground work in Australian and USA for a proper series ‘a.’