Ombudsman welcomes extension to crowdfunding eligibility

Ombudsman welcomes extension to crowdfunding eligibility

The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell today welcomed the passing of legislation to extend crowdfunding eligibility.

“Crowdfunding is an alternative source of equity, which is particularly popular with eligible start-ups,” Ms Carnell said.

“Allowing proprietary companies access to equity crowdfunding platforms, without having to convert to a public company entity, will provide a substantial proportion of Australia’s small businesses with much needed access to capital.

“The previous conversion process was costly and complicated, and put off small businesses from even considering crowdfunding.

“With this new legislation, crowdfunding opens up competition in alternative sources of finance, which will help small businesses start, operate and grow.

“It also allows a safer environment for everyday investors – customers, friends, family and the general public interested in novel and exciting business ideas – and not just specialised investors.

“One of the small businesses featured on our website – memobottle – launched their product on a crowdfunding platform, exceeded their funding expectations and haven’t looked back since.

“We will monitor the progress of this new legislation and hope the impact on small businesses is a positive one.”

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