In the Australian Financial Review this morning, Fleur Anderson reports that we might be getting closer to some legislative changes that might make it easier for companies to access funds via Crowdfunding. Prime Minister Abbott’s cabinet approved a National Industry Investment and Competitiveness Agenda earlier this week. It now will need full parliamentary support including into the Senate, but it is a critical first step for the development of Crowdfunding in Australia.
Raising money via Crowdfunding is a huge global trend, particularly popular with people in the Arts and Entertainment industries. Up until now Australia’s laws have been much stricter than countries such as the UK, US and even NZ. This new Competitiveness Agenda will look to enable anyone in Australia to lend a maximum of $2500 to any one start-up and a total of $10000 for the year.
Australian Regulators felt that raising money through a “Crowd” was similar to the manner in which one would raise money for a Public Company through a Prospectus. With a Prospectus a company was forced to ensure all regulations, disclosures compliance issues etc had all been dealt with, and investors were essentially better protected. Clearly something that a small start-up couldn’t provide. So lets keep an eye out for more details on these new financial rules, which according to Anderson should be published over the next few weeks.