Entrepreneurialism appears to be on the rise in Australia. Over the past two decades, the proportion of our labour force managing their own business has risen from less than four per cent to over seven per cent. Most recent Bureau of Statistics data from 2012 indicates the number of Australian’s owning and managing an incorporated enterprise was growing at a faster pace than any other form of employment.
To support this trend, the Federal Government operates an Entrepreneurs Program which provides reimbursement for eligible projects for up to half the cost of engaging external expertise (up to a maximum of $20,000) to make business improvements. Also significant is the Research and Development Tax Incentive, which reimburses up to 43.5cents in the Dollar for eligible expenditures.
By comparison, the Government of Singapore has instituted major funding initiatives to foster a more focused wave of innovation by start up technology companies. It has established an Early Stage Venture Fund which invests up to $10 million on a one-to-one basis with seed venture capital funds. For smaller and less advanced start ups, programs are in place to provide Proof-Of-Concept Grants of up to $250,000, and co investments for up to $500,000 alongside designated technology incubators. The coming listing of iBosses Corporation aims to capitalise on the favourable policy climate for start up ventures in Singapore by providing educational services to entrepreneurs.
Proceeds from its Initial Public Offer are ear marked for acquisitions of complimentary businesses, expansion of its learning centres and development of digital delivery capabilities. Incentive for new investors lay in the traction gained since its incorporation in August 2014. During the nine months to March 2015, iBosses has recorded revenue of $1.4million and procured licensees for its educational products in Malaysia and Singapore.
Primary risks surrounding the float relate to iBosses limited operating history. Its published accounts for the nine months ending March 2015 were not accompanied by cash flow records and are not representative of its sustainable financial performance. It is not clear whether the Company will remain reliant on external capital following its Initial Public Offer. Faced with limited competitive barriers and possibly cyclical demand, new investors should require very speculative appetite or a more sustained performance history.
Company: iBosses Corporation Ltd
ASX Code: IB8
Shares on Offer: 25million
Listing Price: $0.20
Market Capitalisation: $25million
Listing Date: August 5th
Author: Tim Morris
Jul 28, 2015
Having studied Commerce and Science at the University of New South Wales, Tim began his career in an analytical capacity with Wise-owl. Tim has conducted over 500 corporate valuations and appraisals, specialising in pre revenue assets and emerging markets. For the last five years, his Equity Capital Market insights have been featured as part of a weekly column in The Australian and regularly features on Sky News, CNBC, ABC and Bloomberg TV.