The crowdfunding definition is something with which every individual is aware today. However, just for reminder, the crowdfunding definition says that it is the process of gathering funds for your project from a group of people. Budding businessmen with super ideas find the finance part which holds their idea on the back-track. Keeping up with financial institution like banks and angel investors is not everybody’s cupcake. Hence more and more entrepreneurs are looking up to crowdfunding in countries like US, Canada, Australia and New Zealand. Although the crowdfunding definition seems to be lucid but there have been cases of fraud which alarm the potential investors and they are hesitating to step in to it. Here we specifically talk about the proceedings in Australia in this regard.
The Lawmakers come to the rescue of investors
Australia, is the most recent country to join the League of Nations which have put through rules and regulations for crowdfunding thus making the crowdfunding definition more secure for investors. According to the centre’s Corporations and Markets Advisory Committee which was released in the year 2014, they had laid down a blueprint for a crowd funding definition safer for funders. Few points included initially are as follows:
- Start-ups which possess assets less than 5 million USD and have a turn over lesser than the same value are eligible for it.
- Annual investments by investors are limited to 10,000 USD.
- Exemption to public companies from reporting for a duration of five-year.
- A five day rethinking opportunity to the investors if they want to curl back their investment.
Only a few of the above mentioned instructions are deemed as of now to re-establish the crowdfunding definition. The cooling-off period was included and also the capping of investment.
The crowdfunding definition of Australia
Crowdfunding definition is already seeing changes in Australia, with the introduction of the blueprint. This has raised debate amongst the crowdfunding enthusiasts with a lot of them in favour of the rules. The crowdfunding definition charms the Australian crowd but at present it is limited to slots like arts and drama. The scenario is such that crowdfunding platforms have also started adding into the crowdfunding definition of Australia.
A major opportunity for crowdfunding websites
The picture shows that crowdfunding websites add to the crowdfunding definition but a deeper picture shows that it is a win-win situation for them too. Every project advertised on or funded through the platform brings commission to the platform. So the more widespread the crowdfunding business is, the more profit they make. Kickstarter, one of the top in their field has already stepped in to Australia for changing crowdfunding definition. Other crowdfunding platforms include, MyEfunder, Pozible and Indiegogo.
A lot of original products and ideas which are at par with the crowdfunding definition have come to inception through these crowdfunding sites. They have backed up a handful of projects like organic vodka, which rewarded their investors with vodka’s bottles. These crowdfunding platforms are doing every bit to turn a majority of start-ups into success, as with their success comes the stability of crowdfunding platforms in the new market, thus adding to the crowdfunding definition.
