Launch of new crowdfunding investments

If you feel you missed the cryptocurrency boom, never fear. One of Australia’s financial watchdogs may have just handed you the possibility of picking another winner.

The Australian Securities and Investments Commission (ASIC) has launched the crowdfunding market for investing in new companies with the announcement of the licensing of seven companies authorised to provide crowdfunding platforms.

But remember, investing in new companies is highly risky and not something you should be doing with money you cannot afford to lose.

The new crowdfunding market works like this. The platform providers will connect investors with companies that want to raise capital and individuals will be able to get exposure for as little as $50.

The first deal has already kicked off with Chris Gilbert, CEO of crowdfunding site Equitise, telling The New Daily: “We’ve raised $550,000 for neobank Xinja in the first 30 hours of a campaign with 300 investors participating.”

Those 300 investors have kicked in between $250 and $10,000 and Mr Gilbert expects to complete the $3 million target in a few weeks. Xinja plans to be a mobile app-only bank once it gains a license from regulators.

Companies wanting to raise money must be registered as public but not listed on the stock exchange, meaning they will be early-stage businesses.

They must be worth $25 million or less and can raise only $5 million in one year. Investors can put in a maximum of $10,000 into a company in one year but can invest in as many companies as they like. While Equitise has a limit of $250 per investment others will allow as little as $50.

Ben Bucknell, CEO of On-Market, another ASIC-approved platform, says the market will help new players kick off.

To read more about crowdfunding investments, please click on the link below….

Source: Launch of new crowdfunding investments | The New Daily