Crowdfunding has become an increasingly popular way of promoting financing for innovative projects, allowing start-ups and rapidly growing companies to access diversified sources of capital.
There are already a range of successful crowdfunding platforms in Australia, such as Pozible. This week another online platform, OurCrowd, announced it would enter the market, offering yet another source of funding.
Jon Medved, who I met last November, this week spoke about the importance globally of crowd-funding initiatives and lessons we can learn from more established markets, such as the U.S. His company last year helped raise $30 million for early stage technology companies around the world.
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A recent study by the World Bank showed the proliferation of crowd-funding sites globally – with Australia trailing like-countries such as the U.S. and Canada.
My trip to Silicon Valley in January highlighted how valuable crowdsourced equity funding can be to the startup sector.
Currently, however, regulatory arrangements in Australia are not particularly tailored to this type of capital raising. The Government is determined to see if we can match the regulatory environment that’s present in the US, here in Australia.
The process to determine how to get things right was kicked off by the Corporations and Markets Advisory Committee (CAMAC) in September last year. CAMAC are currently looking into the issue and are scheduled to report back to the Government in April. We will be looking to encourage businesses, particularly startups, to use crowd sourced equity funding to pursue innovation and growth while ensuring that appropriate protections are in place for investors.