Recent government enquiries and reports have indicated that using crowdfunding is about to become less risky for investors and easier for businesses to use as a means of raising equity. This will bring Australia in line with countries like New Zealand, Canada, US, UK, Italy, France and the Netherlands.
What is crowdfunding?
Crowdfunding is an online way of financing your business through donations of money from the public. Sometimes incentives and rewards are offered to encourage donations, such as discounts on future purchases of the product, merchandise, or an acknowledgement.
Commonly crowdfunding has been known to be for creative endeavors, microloans to entrepreneurs or for pre-buy new inventions. However crowdfunding to raise capital from equity investors is a relatively new idea.
Further information about the advantages and benefits of crowdfunding is available at the below link:
Crowdfunding: How to Fund Your Business Idea
If you are looking to use crowdfunding for your business, Business Victoria has published a useful how to article which is available below: How to run a successful crowdfunding campaign
Hopefully goverment is quick to legislate in this area so that it becomes a fair, less risky and a simple way for businesses to raise capital.