Question

What is equity crowdfunding and how does equity crowdfunding work? Show examples from Australia.

Answer 1

Equity crowdfunding is managing of equity share capital through internet and equity crowdfunding will mean that when company will be needing the equity share capital, it will be trying to liquidate its ownership stake through internet and it will issue its shares through internet to group of people and exchange the equity in return of capital.

It is online offering a group of ownership by private company in order to raise funds and it is treated like a capital market method and it is subject to regulations also.

Crowdfunding has also gained traction in recent years in Australia because majority of the start-up businesses and private businesses also trying to raise capital to equity crowdfunding as Australian government has regulated market of equity crowdfunding and prescribed that companies can raise up to 5 million dollars in one year from equity crowdfunding where as an investor can invest into one company up to a limit of 10000 in a year so there is a growing influence of equity crowdfunding in Australia helping a lot of companies in order to establish themselves.