Government closer to crowd source equity funding model
3 February 2015: The Commonwealth Government is a step closer to the development of a crowd sourced equity funding (CSEF) model, to make sure we are creating the best environment to create jobs and increase productivity for small businesses.
Crowd-sourced equity funding is an innovative type of online fundraising that allows investors to make small equity investments in a company.
Yesterday I hosted a roundtable with entrepreneurs, specialist small business, start-up funding experts, peak industry bodies and researchers as part of broad consultation on how Australia could use CSEF to support small businesses and innovative start-ups.
Thriving small business is key to a strong, stable economy and creating jobs. Introducing a sustainable CSEF model is one of many initiatives the Government is introducing to increase competitiveness of our small businesses. It follows a recommendation which came out of the Abbott Government’s Industry, Innovation and Competitiveness Agenda.
The roundtable looked at the current barriers to CSEF in Australia, CSEF models used by other jurisdictions, and potential elements of a desirable and sure footed CSEF model.
I was pleased to hear strong support for the development of, and regulatory framework for, CSEF here in Australia and was interested to listen to the range of views from the experts about how best to take this reform forward. Today’s consultation showed again to me how important it is that the final model provides regulatory certainty to support a sustainable CSEF market that meets the needs of start-up and growing small businesses, and builds investor confidence.
The decision to introduce a CSEF model followed the release of a report by the Corporations and Markets Advisory Committee in June 2014. Since then I have been engaging with innovative Australian financial services firms, small business incubators and investors in start-up businesses.
On 8 December 2014, the Government released a discussion paper that sought views on how crowd sourced equity funding could best work in Australia.
The Government is committed to continuing to engage with industry as it progresses the development of its CSEF model. Following the success of this roundtable, I look forward to hearing further feedback from stakeholders at the next roundtable in Melbourne in the coming weeks.
I encourage people with an interest in the CSEF framework to lodge a submission via the Treasury website. Submissions close on 6 February 2015.