Crowdfunding in Australia - everything you need to know

Updated: Sep 17, 2020

I’m frequently engaged to provide advice on different types of crowdfunding options available to businesses, and in some cases to help run campaigns. Over the years I’ve advised on and/or managed a number of campaigns, both equity-based and rewards-based, both successful and unsuccessful, as well as having worked for ground-breaking international platform Funderbeam. I’m delighted to have been involved in Bunsters’ record-breaking campaign which just closed earlier this month, over-subscribed at $2m. I’ve also invested personally in over two dozens campaigns in Australia and overseas, and caught a ride on what I believe to be the first exit from an Australian equity crowdfunding campaign, when airport transfer company Jaryide listed on the ASX in 2018. This post pulls together a lot of what I’ve learnt from these experiences – hopefully it will answer most of your questions on crowdfunding 😊.

Crowdfunding is the process of raising money from a group of backers using a digital platform. It’s akin to ‘passing the basket around at church’, however by using an online platform, the potential to reach a greater and more dispersed group of backers has increased massively.

Most often the backers are not known to one another nor to the fundraiser – though in some scenarios the backers form part of a community and so can be known to the fundraiser, eg customers or employees. One of the key advantages of crowdfunding over traditional forms of fund-raising, is that it allows you to nurture a large crowd of brand advocates, and this can be especially valuable to a consumer business.

Crowdfunding comes in different forms, the two most significant types are equity-based (offering shares in a company) and reward-based (pre-selling a product, Kickstarter style).

Equity based (“crowd-sourced funding”)

Equity-based crowdfunding has existed in Australia for many years, but was previously restricted to wholesale investors. For example back in 2014 taxi-booking service Ingogo raised $1.2m from 50 backers on VentureCrowd, the platform's first ever campaign. But it was available to wholesale backers only. It was actually part of a larger raise of $9.1m.

Following the introduction of legislation in 2017, and following in the footsteps of the UK (2011) and New Zealand (2014), the regulation was extended to retail investors, aka 'mum and dad investors', creating what is today referred to as crowd-sourced funding (CSF). The terms 'CSF' and 'equity-based crowdfunding' are now used interchangeably - though technically I would argue CSF is specifically the retail investor model - and they are both regulated by ASIC.

In order to raise funds through CSF, companies must use an accredited intermediary (a “platform”). You can’t just set up a page on your own website and start offering equity (though you could hypothetically do this with reward-based crowdfunding). The first intermediary licences were granted to seven platforms in January 2018, but the process was still limited to public companies only. An amendment to the legislation introduced in 2018 extended CSF to proprietary companies, which can now raise up to $5m in a 12-month period from retail investors. This reduces the administrative hurdle for the fundraiser, specifically removing the requirement to convert to a public company and be audited.

The number of licensed platforms has grown from the original seven to 16 as at May 2019, with ASIC expressing concern at the number of platforms. Over time it’s reasonable to expect some consolidation in the industry, and I wouldn’t be surprised if the economic impact of the current pandemic accelerates the demise of some of the smaller players.

People often forget that equity crowdfunding existed even before 2017 in Australia, it’s just that it was limited to wholesale investors (professional investors and/or high-net worth investors). So the platforms that exist today in the space (Equitise, Birchal, etc) didn’t begin from scratch in 2017, they had actually been around for a few years already, and so today have a decent track record (and Equitise was also facilitating CSF campaigns in New Zealand previously). This means performance across the different platforms can be compared using a reasonable data set, better informing decisions about which platform to go with.

It's still a comparatively small space, but growing fast. By my reckoning around $50m was raised last year across Australian and New Zealand. That’s about 10% of the amount raised last year in the UK, where it was established almost a decade ago. In 2018 over 38% of all venture capital investment was done through one of two equity crowdfunding platforms in the UK, making it arguably the biggest single contributor to venture capital in the UK. In the US the JOBS Act was passed in 2012, but only really kicked in around 2016 as it took a while to get the rules right. Last year the US market raised the equivalent of around AUD$150m in ‘regulation crowdfunding’, and about $500m since inception.

One of the first campaigns in Australia was Xinja, Australia’s first neobank, which successfully raised $2.4m from over 1,200 investors through the Equitise platform in 2018. The same year solar power retailer DC Power Co raised $2.2m via the OnMarket platform from more than 1,000 investors, making it the world’s largest equity crowdfunding offer by number of investors. In March 2019 women-only rideshare startup Shebah broke the Australian CSF record for highest amount raised, raising $3m from over 2,000 investors via the Birchal platform.

Western Australia

Over the past year Western Australian startups have taken to crowd-sourced funding big-time, with multiple startups being successfully funded. West Winds Gin was first off the mark with close to a million dollars raised, followed by Credi ($250k), Rhinohide ($660k), Tiller Rides ($1m), Ecocentric Energy ($0.5m) and TetraMed ($400k) all closing successful campaigns.

Most recently, I advised WA-based hot-sauce business Bunsters on their record-breaking campaign, which closed early and over-subscribed having raised $2m.

Not only was Bunsters the highest Western Australian CSF to date, but also the highest CSF nationally since Covid-19 struck, surpassing Seabin’s $1.8m raise which closed mid March.


Both Bunsters and Seabin used the Birchal platform, which certainly seems to have fared better than other platforms through the pandemic. It also hosted ethical brand Outland Denim’s recent $1.2m raise.

As well as Equitise (40,000 subscribers) and Birchal (14,000 subscribers), other licensed platforms operating in the space include VentureCrowd (11,000 subscribers), which has focused on wholesale investors until now even though it is licensed for retail too, and ONMarket, Enable and Billfolda. Note that the number of subscribers has to be taken with a pinch of salt. Not only are the numbers probably already out of date, but more importantly subscribers do no equal active investors, and that is the metric you really care about. When interviewing a platform, make sure you drill into their number of active investors to date.

AngelList is a US crowdfunding platform and probably the best known globally. It has been a trailblazer in this space, allowing predominantly US-based startups to raise equity funding from remote investors, using a syndicate model. AngelList lists 24 angel investors in Perth, as compared to 752 in Australia. Obviously AngelList hasn’t penetrated the Aussie market to the same extent as it has elsewhere, and technically only accredited Australian investors can invest through AngelList.

Platforms typically charge a success fee of 5% and above on successful completion of a raise (this requires the minimum target to be raised). Remember that platform fees are negotiable. Each campaign is going to be a bit unique, notably in terms of the existing database of supporters the business may have access to. From experience I’ve found it pays to consider how the platform is remunerated with respect to investments from its database of investors vs investments from the company’s database vs investments from new investors.

Who is investing?

A typical CSF investor is a professional or semi-professional investor between the ages of 25 and 40. They are likely to already be, or about to become, a brand advocate for the business, in some cases even expressing a degree of passion for the brand. Average investment sizes are difficult to pinpoint, but based on research vary from $1,500 on Birchal (now down to about $1,200 post Covid), $2k to $3k on Equitise, and probably 10 times that much on VentureCrowd (because you’re dealing with wholesale investors). Retail investors can invest up to $10,000 per year in a company under the legislation – though in some cases the investments can be as small as $50. Stats from the UK suggest two thirds of CSF investors are retail investor with no prior experience, with the other third made up of professional investor and/or high-net-worths.

One of the challenges with CSF from a fundraiser’s perspective is that you are dealing with “uneducated” retail investors, especially those who are encountering CSF for the first time through your campaign. So they may not be familiar with some of the language and concepts – for example, they may know what a share is, but not be comfortable with the term ‘equity’. This has significant implications on your marketing strategy and the choices you make around your communications. They can also have unrealistic expectations with respect to liquidity (ability to sell their shares) and access to founders. These things can - and should - be managed.

Eligibility and reporting

In terms of CSF eligibility, you will need to tick certain boxes, including being incorporated in Australia with at least two directors, have total assets of less than $25m and not have a substantial purpose of investing in other companies.

Once a campaign has been successful, you will be subject to some additional reporting requirements, but these are minimal. An annual report needs to be prepared and shared electronically with shareholders, but does not need to be made public (though if you end up with thousands of shareholders, the distinction is a moot point). There is no requirement for an AGM – as you are not a public company. However if you raise more than $3m through CSF, you will need to get your financial statements audited. Feel free to reach out to for help with reporting requirements 😊

Reward-based crowdfunding

Reward-based crowdfunding has been around for a lot longer than CSF. It is a simpler process, and largely unregulated (other than the standard provisions of Australian Consumer Law that you would be subject to anyway when selling to consumers). Individuals or businesses raise funds from backers, to invest in a project, and typically promise something in exchange of those funds, eg a ‘perk’ (but definitely no equity). This might be a token gift, but more typically the perk is in fact the product being manufactured as part of the project. So in effect, the business is conducting advance sales of its product before it is available. Incidentally this can have interesting implications if the business is also claiming the R&D tax incentive for the development of the product. There is no contractual obligation to deliver the promised goods – the expectation is that the business will use its best endeavours to successfully produce the goods and deliver them, but backers are unlikely to be successful in asking for their funds back if the goods don’t materialise.

Kickstarter and Indiegogo are the two dominant platforms in the space, both based in the US. They launched in 2009 and 2008 respectively. Of the two, Kickstarter is the better known and larger platform, having raised over $5b over the past decade.


At time of writing, Kickstarter has only five Perth-based projects currently live on its platform, and another 199 historically successful campaigns. The most financially successful campaigns in Western Australia have both come from cycling startup Cycliq: raising $668k and $267k from over 1,700 backers in 2016 and 2015 respectively. Cycliq has since listed on the ASX. Interestingly the third most successful WA campaign was also a cycling related business, ShockWiz, raising $133k in 2017 from over 400 backers.

In the last couple of months, Perth-based indoor garden startup Urbotanica raised just over $100k from close to 500 backers on Kickstarter, having previously been unsuccessful in a CSF campaign on Equitise.


Indiegogo was initially focused on independent movies (hence the name), though its focus has broadened over time. It is perceived as more flexible than Kickstarter. For instance, it allows healthcare campaigns, which Kickstarter doesn’t, and it allows campaigns to collect backer funds even if they haven’t reached their campaign target, whereas Kickstarter has traditionally been strict about its ‘all or nothing’ approach. As a result, campaigns on Indiegogo have a lower ‘success’ rate (circa 20%), versus Kickstarter’s 33%, where campaign-owners are incentivised to push harder to achieve their target.