Key Points:
The new crowd-funding regime will be a large step forward for Australian investment and will bring Australia into line with crowd-funding regimes in New Zealand, the United States and the United Kingdom.
The good news: crowd-sourced equity funding may soon be legal in Australia.
The not-so-good news: most small companies will not be able to use it.
After a long period of discussion and debate, a Bill to allow crowd-sourced equity funding is now before the Australian Parliament. The Bill will allow unlisted public companies to raise up to $5m pa through crowd-funding.
Significantly, crowd-funding will not be available to proprietary companies. Most start-ups currently begin life as proprietary companies and would, therefore, not be able to access crowd-funding. The Bill tries to compensate for this by allowing start-ups to incorporate as public companies with reduced corporate governance requirements (such as relief from the need to hold an AGM
