Crowd funding is currently receiving significant media attention in Australia. Crowdfunding broadly encompasses schemes that seek to raise funds for projects and ‘start up’ companies through donations from internet users.

In return, crowd funding schemes may offer a variety of incentives to invest ranging from discounts and product samples to debt or equity interests in the business. While crowd funding is not specifically prohibited or legally regulated in Australia, a number of Australian technology start-up companies are urging the Australian Securities and Investments Commission (ASIC) to relax the current rules governing crowd funding, on the basis that the current rules were simply not designed with crowd funding in mind. To date, ASIC appears cautious that small investors may be scammed or burnt by crowd funded companies, particularly if it is extended to start-up companies in exchange for equity.