Last week's Budget provided $7.8 million over four years to ASIC to facilitate crowdsourced equity funding for Australian start-up companies.
The corporate regulator will receive $2.6 million in 2015/2016 to implement and monitor a regulatory framework to facilitate the use of crowdsourced equity funding, including simplified reporting and disclosure requirements.
The Budget papers described crowdsourced equity funding as an "emerging form of funding that allows entrepreneurs to raise funds online from a large number of small investors".
"It has the potential to increase funding options available for entrepreneurs to assist in the development of their business," the government said.
Doug Morris, general manager of portfolio management start-up Sharesight, said the announcement of the crowdsourcing framework is a "big step forward for Australia".
"This should provide access to capital for thousands of start-ups by the very people they count as clients," Mr Morris said.
"It's difficult for DIY investors to diversify their portfolios away from banks and resources without turning their money over to expensive fund managers.
"Crowdfunding solves this by giving retail investors the opportunity to participate in early stage funding and should ultimately be a catalyst for a legitimate technology sector.
"In the US, the Jobs Act – which spurred their crowdsourcing model – was born out of economic necessity during the GFC. I'm glad to see the Australian government on the front foot," he said.
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