In 28 days, the future of funding businesses in Australia will change thanks to the Proprietary Company Legislation passing, opening up options for all Australian companies.Leading Equity Crowdfunding platform, Equitise is thrilled at new legislation which will open up funding channels and allow everyday investors in Australia and New Zealand to access high-growth companies.
Over a four year period, leading Fintech Australia startup Equitise has seen thousands of companies worthy of funding locked out due to outdated legislation in Australia for equity crowdfunding. After working with the Liberal Government and Labour, Equitise is tremendously excited that the equity crowdfunding legislation for proprietary companies has today passed under the Morrison leadership.
CoFounder of Equitise, Jonny Wilkinson says the changes to legislation are a huge step forward for the Australian fintech and startup sector.
“The amended law will take effect in 28 days (reduced from six months),opening up funding channels to help drive investment and growth across the economy. We commend the Government and opposition on working together to achieve the outcome for all involved,” he said.
“Since January this year, when equity crowdfunding became available for unlisted Public companies, Equitise has interacted with over 1,000 companies, 570 of which formally applied on its platform. Out of those companies, less than 5% completed the process to be in a position to raise funds,” he said.
“Whilst some of these companies were not suitable for equity crowdfunding, a large proportion thought the time, cost and compliance for converting and managing a public company to be too onerous at a point where they needed to focus their energies on growing their business,” says Wilkinson.
“Having a formalised structure and process for smaller proprietary companies to raise funds from ‘the crowd’ (their customers, friends and family) will be a huge boost to small businesses and the economy, driving both growth and employment. In turn, it also gives everyday investors the opportunity to invest in these companies and potentially make a return.”
Equity crowdfunding has experienced incredible growth in the UK (the most established market) with over GBP 300m raised in 2017. As a source of funds for startups and private companies it’s overtaking Angel investing and is soon to challenge tradition venture capital methods. Equitise anticipates that Australia could see similar levels of growth and that equity crowdfunding will become an integral part of the early stage capital markets in Australia and the region.
Excited to be pioneers in the equity crowdfunding space Equitise been experienced a long startup journey itself and is excited to be offering an alternative form of capital to other startups across Australia and New Zealand.
The new legislation will allow many great Australian companies the opportunity to access the funding they need to grow and potentially become the next startup success story like Canva or Atlassian.
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