So you think your startup is ready to go ahead with raising capital. Congratulations! The decision to raise capital is an important one. However, it involves navigating through the entrepreneurial ecosystem, and as a founder it can be difficult to determine which steps are right for you and your startup.
On 1 July 2018, new laws came into effect that restrict certain termination rights in most commercial contracts. These restrictions provide an important opportunity for struggling businesses to restructure and turn their business around while ensuring that key contracts remain on foot.
In Australia, the Corporations Amendment (Crowd-sourced Funding) Act 2017 introduced the regulatory regime for this type of funding on 29 September 2017 which allows equity crowdfunding (or crowdsourced equity finance as your government-y folk like to call it). There’s been a lot of excitement, but not a lot of clarity on what that actually means for companies. So we’ve decided to change that!
An Initial Coin Offering, or ICO, is a new form of fundraising that allows companies to take advantage of “cryptocurrencies” to raise large amounts of capital and fund projects. Similar to an Initial Public Offering (IPO), an ICO allows investors to purchase new forms of cryptocurrency colloquially referred to as “coins” or “tokens” from the seller business. Read on to hear how an ICO differs from an IPO, and the legality and risks of ICOs in Australia.