Start-ups are now able to raise capital through crowd-sourced funding after several companies were authorised by the corporate watchdog to provide the online service.
The Australian Securities and Investments Commission (ASIC) says seven companies have been issued with Australian Financial Services (AFS) licence authorisations to act as mediator that can provide the crowd-sourced funding service.
The grant will allow eligible public companies to raise capital by issuing shares to investors via the online platform.
It aims to provide a new means for start-ups and small to medium sized companies to access capital to develop and grow, the corporate watchdog said.
ASIC Commissioner John Price says 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,’ Mr Price said.
Crowdfunding site OnMarket said the new licenses, which follow federal legislation announced last year, allow Australian retail investors to contribute as little as $50 or as much as $10,000 to a business.
The company’s chief executive, Ben Bucknell, said equity crowdfunding would level the playing field and allow anyone to invest in a company.
‘It’s time all Australians had a fair go and access to Australian businesses of the future,’ he said.