Crowdfunding available for startups

UPDATED: Australian startups will now be able to raise capital via crowdfunding sources after the corporate watchdog today approved the first batch of licences allowing companies to act as intermediaries in the process.  

The Australian Securities and Investments Commission has issued licences to Big Start (associated with Perth business Sharequity), Billfolda, Birchal Financial Services, Equitise, Global Funding Partners, IQX Investment Services and On-Market Bookbuilds.

Perth-based Australian Equity Crowdfunding executive director Jeff Broun, who had been evaluating an application, confirmed his firm did not apply with Asic.

“We didn’t want to be a platform operator because being a platform operator is actually quite onerous and it doesn’t give us what we’re primarily trying to do, which is to help companies to get CSF ready,” he said.

Eligible public companies will now be able to raise up to $5 million through equity crowdfunding, or crowd-sourced funding (CSF), with investors able to put in between $50 and $10,000.

Asic commissioner John Price said the authorisation marked a significant milestone for crowd-sourced funding in Australia.

"Intermediaries have an important gatekeeper role, which will be key to building and maintaining investor trust in crowd-sourced fundraising, so we are pleased to have now issued the first tranche of authorisations," he said.

Billfolda chief executive Matthew Pinter said it was pleasing to secure the licence.

“We thought we were going to get across the line before the end of last year but it’s just taken quite a lot of extra work since then to make it happen,” he said

“With a $25 million asset cap there are some serious companies that we’re talking to.”

IQ chief executive George Syrmalis said the changes would provide new funding options for Australian startups.

“In any biotechnology enterprise, tomorrow’s challenge is to create new medicines that can prevent incurable diseases; however today’s challenge is to get to tomorrow,” he said

“Equity crowdfunding certainly enables today’s challenge.”