New Crowdfunding Laws, Yay For Small Business Or Nay?

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Business leaders are lukewarm over the Turnbull Government’s new crowdfunding Bill which has passed the House of Representatives, with some saying it’s a first step for small business and startups but others saying it falls dramatically short. The Government’s crowd-sourced equity funding (CSEF) Bill is designed to help startups and small businesses have greater access to equity funding. It allows anyone to buy equity in a company — so they own a piece of it and can share in its financial success — so mum and dad investors would be able to spend $10,000 within a 12-month period in a startup that has less than $5 million in assets and has less than $5 million in annual turnover.

But there’s a catch: the startups must be unlisted public companies — a structure that allows them to sell shares but not list them on the stock exchange — as opposed to private firms, which most startups are.

Minister for Small Business and Assistant Treasurer, Kelly O’Dwyer said the Bill was a win-win for investors and small business.

“The intent of this Bill is to assist start-ups and other small businesses that may have difficulty accessing equity funding due to the costs of disclosure and other requirements, while protecting mum and dad investors,” she said.

To read the full article, click http://s.coassets.com/nWz.

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