Crowdfunding hasn’t been a viable option for investors – until now. But this space is worth watching given investors could soon be offered an equity stake in a hot new start-up.
As far as investments go, throwing some cash at a crowdfunded venture hasn’t been considered a worthwhile prospect given it probably won’t yield a return. But legislation governing crowdfunding in Australia is under review, and investors are sitting up and taking notice.
The idea of crowdfunding is very simple. If a company needs to raise money for a project then investors can back them by pledging money. Depending on the scheme, they get back special versions of the product, cash from sales or equity.