CSF Raises vs 708 Raises
Crowd Sourced Funding
The Corporations Amendment Crowd-Sourced Funding Bill 2017 was passed by the Australian Parliament in March 2017 to enable capital raising to commence in September 2017. Smaller unlisted companies can raise up to $5 million a year, with no more than $10,000 coming from any one retail investor in a 12-month period. Wholesale investors have no restrictions on investment amounts.
Business Introduction Services
Enable Funding provides an online business introduction service which operates pursuant to the ASIC Class Order 02/273 “Business Introduction or Matching Services” (Class Order), using the exemptive relief of s708 of the Corporations Act. We match entrepreneurs, job creators and business pioneers seeking growth capital with potential investors from our membership.
Capital Raising Alternatives
Issuers are encouraged to seek independent financial advice before deciding on a capital raising service as Enable Funding doesn’t provide this type of advice. Some features of CSF and 708 services are summarised below.
|DESCRIPTION||CSF RAISES||708 RAISES|
|AUD $5M maximum annual funding per company (issuer)||✔||✔|
|Issuer must be public unlisted company||✔||✔
Enable Funding requirement
|Issuer principal place of business and majority of directors must be in Australia (excluding alternate directors)||✔||✔|
|Issuer product & service restrictions||Can’t have substantial purpose of investing in other companies, entities or schemes (including related parties)||No restrictions|
|Issuer financial restrictions||$25M maximum annual turnover and $25M maximum gross assets (including related parties)||No restrictions|
|Ordinary shares issued||✔||✔|
|Unlimited number of professional, wholesale & sophisticated investors and investment amounts||✔||✔|
|Retail investors per issuer||No restrictions||20 per annum|
|Retail investment per issuer||$10,000 maximum per annum||No restrictions|
|Cooling-off period||5 business days following retail investment application||10 business days following an investment discussion meeting (for shares purchased within 5 business days of that meeting)|
|Further information||ASIC Regulatory Guide 261||ASIC Class Order 02/273|