Equity Crowdfunding allows everyday investors, mums and dads, and the millennial generation, to invest in early-stage and growth-stage businesses. Unlike platforms like Kickstarter (which gives you rewards for crowdfunding), Equity Crowdfunding enables a large group of individuals (‘the crowd’) to invest in early-stage businesses in return for part-ownership of the business (equity).
In a capital raising space that was traditionally dominated by wealthy individuals, venture capitalists and angel investors, OnMarket enables everyone to handpick, gain a stake and invest in start-ups, early-stage and growth-stage businesses.
Legislation for Equity Crowdfunding was only passed in Australia in 2017 (Crowd-sourced Funding Act 2017, amended and expanded in September 2018).
Equity Crowdfunding has been successful in its infancy in Australia raising $45m in its first 2 years from 68 deals. Most encouraging has been the growth with both capital raised and number of deals more than doubling in 2019. It is clear that there is great potential for further growth in Australia, with early-stage businesses increasingly welcoming this type of funding and more and more investors being “self-directed”.