Is Crowd Sourced Funding Equity Raising the Same as Crowdfunding?

• Crowd Sourced Funding Equity Raising is not the same as “Crowdfunding”.

• Crowd Sourced Funding Equity Raising is governed by the Australian Government’s “Corporations Act” which specifies strict legal requirements for the company to abide by.

• The company has to appoint an Intermediary from the businesses which have been appointed Crowd Sourced Funding Intermediaries by ASIC.

• The company has to produce a Crowd Sourced Funding Offer Document (similar to a Prospectus) which contains significant amounts of information.

• “Crowdfunding” is a popular term given to people or organisations raising money for particular needs or events.

• “Crowdfunding” has virtually no government control or legislation covering its activities.

• Common uses for “Crowdfunding” include:
• raising money to assist a family with funeral expenses;
• raising money to assist someone who has been injured in an accident;
• raising money for an inventor who wants to raise a sum of money to finish a project. Sometimes the inventor offers the “crowd” sample products;
• an employee raising money to pay for legal expenses incurred in a dispute with an employer.

• There is no formal requirement on reporting the amount of money raised or the expenditure of that money within “Crowdfunding”.

• A company cannot utilise “Crowdfunding” to raise share capital for the company.

Click here if you wish to learn more about Crowd Sourced Funding Equity Raising or go to our website:

www.essbiztools.com.au/crowd sourced funding/ learn more

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Peter Towers