Equity crowdfunding legislation has finally been given the tick of approval by the federal Parliament, after more than two years of industry consultations, government deliberations and debate.

The Corporations Amendment (Crowd-sourced Funding) Bill 2016 passed through the Senate on Monday with agreement from the opposition, after Labor senator Katy Gallagher put forward two amendments related to the cooling-off period for investors and eligibility for a wider range of startups and small business.

With support from the Greens and the Nick Xenophon Team, the cooling-off period was changed from 48 hours to five business days.

However, Labor’s request to change one of the conditions for eligibility from a “public company limited by shares” to “the company has an agreement with a CSF [crowdsourced funding] intermediary that is legally enforceable” did not go through.

The legislation is expected to come into effect in the next six months, opening up the market of high-growth ventures to retail investors.

“We’re relieved because it’s a really good start,” FinTech Australia chief executive Daniell Szetho tells StartupSmart.

“We’ve been lobbying for this change since almost 2015.”

While the final bill is “limited in scope”, Szetho says its passing through the Senate means regulatory bodies like the Australian Securities and Investments Commission can start developing frameworks for a range of small to medium enterprises to access new capital through crowdfunding.

In February this year, shadow minister for the digital economy Ed Husic told StartupSmart he believes a key problem with the equity crowdfunding bill is that it excludes more than 99% of small businesses and startups in Australia.

But Szetho believes the legislation will actually “help a whole new group of companies”, not just startups.

“It’s very easy for the startup community to become very self-focused,” she says.

“It’s not really targeted as much to startups, which are all usually private companies.”

With the Australian Securities Exchange’s “sweet spot” usually companies with a market capitalisation of between $50 – 500 million, Szetho says, there are numerous other smaller businesses who need investment to launch their next phase or expand into new markets, but would be burdened by the “onerous” process of undertaking an initial public offering.

Equity crowdfunding will be transformative for these business, she says, especially, considering the burgeoning demand from around the world to invest in Australian early-stage and small and medium businesses.

“There’s very strong retail investor demand,” she says.

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