January 10, 2020

Crowd Sourced Funding - non-investment and investment types

Photo by Kelly Sikkema on Unsplash

Crowd sourced funding - non-investment and investment types

29 January 2021

Crowd-sourced funding (CSF) involves raising funds, usually through an online intermediary (a middle person). 


A large number of people make small financial contributions to your company.

And, there are 2 types of crowd-sourced funding - non-investment and investment-based. 

Below is an overview of each.

Non-investment crowd-sourced funding

Non investment crowd sourced funding involves you receiving donations from participants that support your cause or pre-purchase a good or service that will be using the raised funds. 

Investment-based crowdsourced funding

Investment-based crowdsourced funding involves participants investing money for a financial reward or gain.

Unlisted public companies and private companies with less than $25 m in assets and annual revenue can make offers of ordinary shares to retail clients with an Australian Financial Service (AFS) licensed CSF intermediary’s platform via a CSF offer document. 

Eligible companies can raise up to $5m in any 12-month period under the CSF regime. 

Corporations Act guidance

The Corporations Act has the regulatory framework for equity based crowd-sourced funding (investment based crowd sourced funding type). 

Your company offers ordinary shares to investors for a small cash investment. 

Do you have questions or comments about crowd sourced funding types? Be sure to leave them below. 

About the author 

Vivian Michael

As founder and lawyer at Michael Law Group, CPA and owner of a business consultancy, Vivian is well-positioned to advise Australia's top entrepreneurs. Entrepreneurs benefit from Vivian's commercially focussed legal advice, business experience, and commitment to deliver the best quality business legal services to entrepreneurs.

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