Time to start catching-up process for equity crowdfunding for startups
5 June 2014
The Australian Private Equity & Venture Capital Association Limited (AVCAL) has welcomed the release today of the Corporations and Markets Advisory Committee’s (CAMAC) report into equity crowdfunding in Australia.
AVCAL’s Chief Executive, Yasser El-Ansary, supported the key policy directions set out in the CAMAC report, and said that:
“Australia has been lagging behind other developed economies in setting out a policy framework to support this new and evolving approach to raising equity capital by startup businesses, and because of that we have some catching up to do.”
“This report provides us with a comprehensive analysis of how we should move forward with facilitating a market for equity crowdfunding in Australia, while ensuring there are appropriate safeguards for investors who might not have significant experience investing in high-risk ventures.”
“Establishing a new exempt public company structure to facilitate equity crowdfunding is certainly worth exploring, but we have to make sure we don’t fall into the trap of adding new administrative complexity which leads to a significant increase in compliance costs for startup businesses.”
“What startups don’t want to have to do is spend significant amounts of money on lawyers and accountants to manage their compliance obligations – they want to focus their resources on bringing their innovative idea to life and creating a commercial business.”
“There also needs to be some discussion on the proposed investor cap of $2,500 per annum by an individual investor, which will be critical to the effectiveness of the new regime.”
“Expectations are high in the venture capital industry that the government’s National Industry Investment and Competitiveness Agenda – due to be released in the coming months – will lay out a long-term comprehensive policy response framed around incentives that help to drive more private sector investment into innovation and venture in the future. With this report, there is now a very compelling case for equity crowdfunding to feature in the government’s future policy plan.”
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Author: Christian Gergis, Head of Policy and Research, AVCAL
Connecting private equity, venture capital and the broader business community at AVCAL’s first-ever Sydney gala dinner event.