A contributor makes a payment in return for a share or equity interest in the enterprise. This is the model Pitch.com.au operates under.
A contributor makes a payment (or ‘donation’) to the project without receiving anything in return.
A promoter provides a reward to contributors in return for their payment. Rewards can be goods or services or rights in the company.
A contributor lends money to the promoter (or pool of promoters), and in return, they agree to pay interest and repay principal on a loan.
After a very long wait, the Crowd-sourced Funding Act 2017 finally arrived. The rest of the world has been able to play in this space for years, and Australian investors can finally participate in equity crowdfunding too. The new legislation provides a regulatory framework for Crowd-sourced Equity Funding (CSEF) and enables a large number of individuals to make small financial investments in exchange for an equity stake in an enterprise. Under this legislation, Australian companies can raise up to $5 million from investors each year.
Unlike traditional capital raising, web-based crowdfunding means you can approach thousands of potential investors instantly. Crowdfunding has unlocked the gate and put funding for innovation in the hands of the crowd.
If you are either a startup or an existing business expanding your operation, crowdfunding is a great way to boost cash flow and capital. Crowdfunding is great for niche ideas that may otherwise struggle to receive funding. The exposure that the crowdfunding.com.au platform offers is like no other, with a huge emphasis put on social media to entice potential investors.
Moreover, it gives exposure to a likeminded community that can help increase exposure even further.
In order to be considered, you need to meet the following criteria:
- Be an Australian company.
- Have less than $25million in revenue per annum.
- You are not using the funds to invest in another company or to loan to someone else.
- Primary place of business is in Australia.
- Have less than $25 million in assets.