Unlisted public companies are the winners in new equity crowd funding laws which passed the Senate today.
Those with less than $25 million in assets and turnover can raise up to $5 million via crowdfunding.
However, small proprietary companies, those more likely to contain early stage startups, still can’t get access to crowd funded equity.
Jonny Wilkinson, the co-founder of online equity crowdfunding platform Equitise, says his company will launch offers as soon the crowdfunding framework is in place and licensing begins in about six months.
“There’s going to be huge demand,” he says.
“We’ve been approached by hundreds of companies over the past two years that we were unable to help and we’re looking forward to working with all the suitable companies to use equity crowdfunding to harness the crowd.”
Wilkinson says Equitise is continuing to work closely with government and Treasury to come up with a framework for proprietary companies to access equity crowdfunding as well.
The peak body for Australia’s fintech industry welcomed approval of the Corporations Amendment (Crowd-Sourced Funding) Bill 2016, saying the changes provide a major avenue for companies to grow and create jobs.
“This new legislation represents an important step to open up early-stage capital markets, which will ultimately help businesses to grow and therefore create new employment opportunities,” says FinTech Australia CEO Danielle Szetho.
“It also represents a substantial step forward in making the Australian regulatory environment internationally competitive, given concerns that Australia is falling behind the rest of the world when it comes to equity crowdfunding (ECF).”
She says there’s strong pent-up demand from Australia’s investment community to utilise the provisions in this legislation.
“Also, some of the companies interested in taking advantage of equity crowdfunding are family run enterprises, so this doesn’t just benefit the startup community, it’s about everyday mum-and-dad SMEs as well,” she says.
Like Equitise, CrowdfundUP has been approached by a large number of companies wanting to crowdfund.
“Unfortunately, it’s been a 15-month marathon to get this legislation across the line but nevertheless we are excited that it is now in place,” says CEO Jack Quigley.