Crowdfunding reforms bolster investment pool for Aussie businesses

“It’s almost creating Shark Tank for the public, or be your own Shark Tank, which is phenomenal from an innovation perspective in Australia,” says Crowdfunding.com.au founder Chaz Prezident.

Private Australian businesses will soon no longer need to become public companies if they want to access crowdfunding to raise equity, following reforms to the Corporations Act passed this week by the federal Parliament.

Under the current law businesses can only raise money from retail investors through equity crowdfunding if they convert to an unlisted public company structure, but that will change as of 7 October.

Crowdfunding.com.au founder and CEO Chaz Prezident says small and medium-sized businesses are already embracing the expansion of the crowdfunding model, and with the new legislative change they will be able to raise up to $5 million each year from retail investors.

“Australian businesses have been waiting for this legislative change since the initial introduction of equity crowdfunding in Australia in late 2017,” Prezident says.

“Equity crowdfunding is the most powerful legislative change in the capital raising space in recent times as it gives us the ability to amalgamate micro investments (as little as $100) into meaningful capital contributions to businesses.

“We agree with the Federal Government’s approach to balance the funding needs of businesses with the need for appropriate oversight of companies raising funds from the public.”

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Source: Crowdfunding reforms bolster investment pool for Aussie businesses