Winerytale Move on Equity Capital Raise Leaves Venture Capital Firms Seething
Embargo: 8:00am March 4, 2020
The investment community has been left stunned by a tech startup’s decision to leave professional investors out of its much-anticipated equity capital raise.
Winerytale, a platform delivering augmented reality for the wine industry, has limited its share issue to only those within the wine industry, leaving venture capital firms and portfolio investors seething.
According to founding partner, Dave Chaffey, the team has drawn the ire of the investment community, “There’s a tremendous opportunity here, and we feel that it’s critical for us to have the industry involved in this first round, rather than to be driven by the short-term dollar-focus of investment bankers.”
Understanding the Hype
The equity capital raise, which opened in February 2020, seeks to raise $1.25 Million – a minuscule amount in professional investment circles.
However, the concept, which is first-to-market with a scalable solution, is widely expected to deliver big things.
“I understand that frustration, particularly for investment firms who have followed our journey for a while now,” says Chaffey, “this is the pick of a large bunch, with the potential of big returns, and yet it’s been taken off the table”
The frustration comes on the back of recent company announcements outlining aggressive rollouts to capture the Australian & US wine industries, as well as continued development of its self-translating content prototypes.
Early opportunity frustration
The calculated product strategy, which includes offering the technology to wineries for free, is drawing strong comparisons to the early days of internet juggernaut YouTube, whose strategic approach to market saw its acquisition by Google for $1.65 Billion, in less than two years.
Despite the close out, Chaffey says that Venture Capital has a role to play further into the future “Venture Capital is better suited to the next round of fund raising, which we are hoping to undertake a the end of 2020.”
“The risk is almost zero at that stage, and returns are pretty much guaranteed. But of course, the cost of the investment is likely to be a lot higher, probably 8 to 10 times the current value, which is what VC’s are unhappy about.”
“It hasn’t been an easy stance to take,” said Chaffey, “we’ve said no to two approaches already, both tech giants, and both within the first week of opening”
“The last thing we want to do is confuse anyone” says Chaffey, who adds “the Winerytale equity capital raise is open to anyone or any entity in the wine industry or from the wider food and beverage industry.”
“Minimum investment is $US125,000 which is within reach of a lot of people. We’re quietly confident that we’ll be able to close the offer in March, if not sooner – but there’s a lot of conversations to have in that time”
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About the Equity Capital Raise
The Equity Capital Raise opened on February 10, 2020 – Download the Equity Capital Offer Document.
Aggregate capital raise is $US1.25Million, with a maximum of 10 x investor share parcels of $US125,000
For more information, please download the Offer Document