In recent history, we have seen an advent of digitised technologies, shedding light on a different means of providing traditional services. The most distinguished examples of this movement have meant that the world’s largest taxi company owns no cars and the world’s largest accommodation provider owns no real estate. This was a dominant theme throughout the Singularity University conference held in Christchurch last month, indicating that these profound industry changes are likely to continue into the future. This blog will briefly describe how we can apply some of the learnings from the SingularityU conference to the capital raising process and where equity crowdfunding fits into this paradigm shift.
A common theme at the SingularityU was the application of the “Six Ds” of exponential technologies. This described the transition from becoming a digitised technology to a democratised service which we have articulated below:
- Digitisation – once a technology can be represented digitally (ie. in binary code), the speed at which the technology grows becomes exponential due to improved accessibility and distribution
- Deception – once this technology is digitised, its growth rate is deceptive given that exponential growth appears negligible at first. 3D printing is an example of this, having been around for some 35 years before it was popularised amongst the general public
- Disruption – once the new technology begins to outperform the existing market on cost and effectiveness, consumers are incentivised to use the new market that the exponential technology has created
- Demonetisation – as the cost of making the exponential technology available to consumers approaches zero, money is gradually removed from the equation
- Dematerialisation – once the software improves and becomes readily available, the consumer is not required to use particular pieces of hardware (for instance, music devices such as the iPod have since been transitioned to the iPhone, a cellular phone)
- Democratisation – the service is made readily available to all at a significantly reduced price as both the services’ software and hardware costs move closer to zero
Traditionally, the capital raising process has required significant processing cost and time commitments, in large part due to the execution and distribution of legal documents with potential investors. Equity crowdfunding creates a digital platform to organise the logistics of these documents, which we hope will have a significant impact in reducing these costs for the investing public and entrepreneurs globally. Equity crowdfunding is only one example of the many global platforms exploring the digital potential of the internet.
Equitise has been part of the journey in creating a digitised platform for equity financing and we will continue to drive down the costs of raising capital for New Zealand and Australian economies into the future.