STOCKBROKER Andy Semple has successfully set up a funds management company by way of private equity after raising $900,000 in two months.

Managing director of Gold Coast stockbrokers ANDIKA, Mr Semple established Xcelerator Capital Ltd, a funds management firm, with three other directors after raising the required funds through existing clientele.

The directors created an unlisted public company - to allow a 'cleaner process' and offer greater transparency for potential investors - and set out to raise $900,000 without the help of a private equity firm.

"We, as investors, thought we could debt fund, but decided to raise the capital required through private equity to eliminate debt," says Mr Semple, who wrote his own information memorandum (IM) and saved about $40,000.

"In my case, I wrote 99 per cent of the IM and got the lawyers to dot the Is and cross the Ts.

"If someone did it my way, they could save plenty. But that's assuming they know what they are doing - and that's the important part. Anyone who is seeking capital must be able to demonstrate why they need it. You need to have a business plan and be able to communicate that to potential investors," he says.

"I had a flow of potential investors to tap into straight away and was able to raise the funds through my own network.

"The only real cost was legal fees to check the IM. The first people you should approach are your friends. Use your own networks first and get a law firm to double-check everything," says Mr Semple.

Of the $900,000 raised, $500,000 will be immediately invested into the company's first financial product, to be launched in September. The remaining $400,000 was used
for working capital.

With 20 per cent of the company sold upfront, Mr Semple says the remaining 80 per cent was divided between the four directors.

"I encourage any company looking to raise under $2 million to have a go at raising the capital themselves - although, don't ignore the fact you need to consult with the professionals," he says.