In another win for the Australian startup ecosystem, Crowd-sourced Equity Funding (CSEF) continues to gain traction in the Australian market with the proprietary company regime passing through Parliament.
In the Startup Founder Research 2018 report, KPMG's High Growth Ventures team discovered that access to funding is one of the top three barriers to the success of a startup. However, this new development will allow the necessary legal infrastructure for early stage proprietary companies to access new avenues of capital raising, and potentially overcome these barriers. The ground for growing and developing a startup company has never been more fertile, and it seems the fruits of CSEF being available for proprietary companies are soon to be borne.
However, these legislative developments have also triggered a series of obligations to ensure adequate investor protection. Startup founders should note some of the key legislative changes which include the following:
Currently, the eligibility criteria for proprietary companies to access CSEF include, but is not limited to:
These amendments provide further legislative frameworks to support capital raising in the startup ecosystem. Our team at KPMG Law are able to assist clients seeking to access CSEF at this exciting time – let the crowdsourcing begin!
A research study conducted by KPMG Enterprise High Growth Ventures into the wellbeing of startup founders and entrepreneurs.
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