Getting Started With Equity Crowdfunding
GETTING STARTED WITH
EQUITY CROWDFUDNING
Thank you for your interest in equity crowdfunding. First of all you should find out if your company meets the minimum requirements to proceed with fundraising under this part of the Corporations Act. The following page outlines some of the minimum issuer requirements for an equity crowdfunding (CSF) offer, there after we touch on some issues you need to consider as you develop your Equity Crowdfunding offer. These comments are not a substitute for advice and act as only a general introduction to compliance with the regime. We strongly encourage every issuer to familiarise themselves with the ASIC regulatory guide 261 Crowd-sourced funding
- 1.1 Australian Public Company, Limited by Shares. Converted into a public company or incorporated as such after CSF royal assent date
- 1.2 Australian Proprietary Company (PTY Limited by shares) with at least 2 Directors
- 1.3 Australian-based business with registered “Place of Business” in Australia
- 1.4 Majority of Company Directors are Australian
- 1.5 Not listed (nor a related party of a listed company)
- 1.6 Companies must provide:
- 1.6.1 Principle place of business (In Australia)
- 1.6.2 Description of Business activities
- 1.6.3 Company organizational chart
- 1.6.4 Description of share capital structure including asset classes and share rights
- 1.7 Gross Assets that do not exceed $25 million (AUD)*
- 1.8 Turnover in past 12 months did not exceed $25 million
(AUD)
- 1.8.1 inc related parties (40% ownership/control of the company)
- 2.1 Fundraising in past 12 months does not exceed $5 million (AUD) from retail exempt sources
- 2.2 No prior listing by the Company or Related Party for CSF purposes
- 2.3 Company may only issue Fully Paid Ordinary Shares via CSF
- 2.4 Not a blind pool / investment Co – funds are not to be used for re-investment or lending
- 2.5 No simultaneous crowd offers (including related party offers)
- 2.6 Funding not used for Loans (or loans to related parties, except wholly-owned subsidiaries)
Businesses must be of good standing and provide evidence to the CSF Platform (‘Billfolda’) to prove this, including the following details for every Director, Proposed Director, Officers, Proposed Officers, Managers and Proposed Managers:
- 3.1 Full Legal Name & Residential Address
- 3.2 Skills, Qualifications, Behavioral & Experience relevant to their position
- 3.3 You consent to online and personal checks by Equifax
and IDMatrix including the following
- 3.3.1 Any corps law criminal history, including a description of circumstances
- 3.3.2 Any corps civil penalty history, including a description of circumstances
- 3.3.3 Any corps disqualification history, including a description of circumstances
- 3.3.4 Any corps banning order history, including a description of circumstances
- 3.3.5 Any court order under s921A (2) (a) history, including a description of circumstances
- 3.3.6 Any insolvency / administration history, including a description of circumstances
- 3.3.7 Associated company and officeholder checks
- 3.3.8 Other compulsory checks
- 3.4 Funds paid out directly or indirectly to any of the above (i.e. use of funds)
- 3.5 Previous CSF offers, and the outcome
- 3.6 Good Fame and Character proof
Named individuals, Directors, Proposed Directors, Officers, Proposed Officers, Managers and Proposed Managers, CSF intermediary, Offer Promoters / Marketers, >20% shareholders, Controllers, and any s738 G3 related party must disclose;
- 4.1 Funds paid out directly or indirectly
- 4.2 Previous CSF offers made, and the outcome of the offer
Investors need to understand your company, its past and your plans for the future, to help comply with the regulations and position your offer correctly we require.
- 5.1 Statement of financial position less than 1 month old
- 5.2 Minimum subscription for % equity
- 5.3 Maximum subscription for % equity
- 5.4 Use of funds (minimum and maximum subscription amounts)
- 5.5 Expected offer period, and why this length of time (max is 3 months)