Crowd-Sourced Equity Funding in AustraliaA Critical Appraisal

This article reviews the equity crowdfunding law and practice in Australia. It argues that a light regulatory approach for issuers and investors is required to ensure that crowd-sourced equity funding (CSEF) is attractive enough to both investors and issuers. At the same time, it argues that regulation focused on preventing and detecting fraud is essential for CSEF to be successful. The article therefore recommends that caps on the amount each investor can invest are not desirable and, instead, suggests other means of safeguarding against fraud, like the use of whistleblower programs, investor education and reliable dispute resolution mechanisms, in addition to what the legislation provides.