Crowdfunding in Australia

[Gillian Lee]

Hi All,

The crowdfunding bill in the States has been getting some press recently, and is about to pass in the Senate:
Basically the bill will allow startups and projects access to raise capital with less restrictions than previously (as applied to registering the investors, the amount of capital investment received by investors and means by which a startup can seek potential investors- now to include social media).

There are of course some pretty complex details associated with protecting investors and startups, but the premise is encouraging.

Here's interesting article about the potential for this change to crowdfunding systems in Australia (think websites such as http://www.startsomegood.com, http://www.pozible.com.au etc).

http://anthillonline.com/what-is-crowd-funding-and-why-can-we-get-the-legislation-to-support-it-in-australia/

[jkhuri44]

i hope someone funds my extravagant studio idea instead of supporting something worthwhile like Kiva.

[Manning]

Hmmm, a pet interest of mine. I first noticed crowdfunding when a mate of mine recently raised around $30K to shoot a documentary about the Polish resistance in WWII. So clearly the idea has merit. (For the record, I should note he was struggling to get past $4K until his project got support from a Polish-American Association).

Crowdfunding seems to fall into two categories. The first is "charitable/supportive investment" - putting money into a project because you believe it is worthwhile (eg kiva.com and their microloans to people in third-world countries, or "creative" projects like my friend's doco).

The second is "venture investment" - investing because you believe the proposition will generate a return. This one is the chief focus of the US Bill, and while it is a great idea it does raise numerous technical and legal issues. (Reuters present a good overview of the bill here - http://www.reuters.com/article/2011/12/ ... 2420111212)

It's great because it potentially makes capital available to people excluded from the traditional capital market (ie. pretty much anyone trying to start a small business). The risks are the issues of control - a certain film I won't name was effectively crowdsourced (via friends, colleagues and family). The film went on to do huge business, earning over 30 times its production costs. Many years later the investors are still embroiled in legal disputes over which of the 400 or so "owners" of the film gets to decide what happens with all the money.

[obutcher]

I've recently purchased some CD's from kickstarter.com where the artists have basically asked you to help fund the record and if you pledge $30 you get a copy of the CD. Both bands had small followings so the targets were easily reached. Good way to get some money for studio time!

[Alistair]

There's some pretty cool stuff on www.artistshare.com too. Some pretty oversung daggy American stuff too, but anything that helps Jim Hall keep making records is ok in my book.