Crowdfunding: Call For More Effective Controls

Crowdfunding: Call For More Effective Controls

MitchelLake partner Jon Tanner backs the call for more effective controls when it comes to crowdfunding startups within the Australian market. With word that the Australian government is reportedly looking to introduce legislation to allow investment of no more than $2,500 in any one company to a maximum of $10,000, Jon states “There’s no doubt it will open up a new direct market for small cap, fast growth ventures, but these are all high risk by nature”.

Jon spoke to SMH (2 April, 2015) saying that only one in 20 startups get up from seed level, with the number being one in six at venture capital level. Jon wants to see controls work towards vetting companies and ensuring they qualify for equity investment.

With crowdfunding being a fairly new phenomenon we’re only just seeing how the world is beginning to legislate it. Jon continues by saying that at least with listed companies there are processes in place to ensure companies prove themselves.

We look forward to seeing progress in this area in the near future.