Gold mine or Wild West? Equity crowdfunding in the spotlight [Video]

Equity crowdfunding is proving resilient while other forms of start-up investment are drying up, new figures show, despite controversy over the business model and Australia’s corporate watchdog exercising its “stop order” powers for the first time.

Equity crowdfunding allows a group of individuals (the “crowd”) to invest in businesses in return for part-ownership of the business (“equity”), often with extra rewards, such as discounts or bonus items.

The business model has been a boon for hundreds of businesses since its legalisation in 2018. But it has also proven controversial, given regular celebrity endorsements – rapper Ice Cube is an ambassador of Birchal investment company MyPremo, for example – along with the inherent risk associated with investing in early-stage businesses, many of …