Two people in Byron Bay who invented a new kind of beehive have raised $10 million to develop the idea via crowdfunding. They used the crowdfunding platform Indiegogo, see www.indiegogo.com, which says it’s the biggest crowdfunding site in the world, and started in California in 2008. According to their website, 300 000 groups and companies have raised money via this site.
An article in the AFR on 2-6 April, Bankroll the next Google, p29, discussed crowdfunding. A summary follows:
Crowdfunding platforms are springing up all over the place. These include Venturecrowd, which offers equity for modest investment. One company planning to develop a new software package for taxi charging raised $1.2M in three days from 52 investors, who put in an average of $23 000 each. Under current law, only high net worth investors can register as wholesaler investors. This is being reviewed. NZ, the UK, Italy and Canada now allow anyone to invest in such ways. Others are Equitise, Crowdcube in the UK, but you need a UK bank account, Seedrs also in the UK and OurCrowd in Israel. Kickstarter is a crowdfunding site but is aimed at seeking donations for art and community projects. Donors do not get equity in the project.
Currently the legal situation in Australia is unclear. ASIC seem to think its equivalent to a float where a formal prospectus is involved. The Commonwealth Government is examining this concept.
Again, anything where money is involved ALWAYS requires expert financial and legal advice.