The Australian Small Scale Offerings Board (ASSOB), which describes itself as "Australia's oldest and most successful crowdfunder", entered the market in 2007 and has raised almost $150 million since then.

ASSOB chief executive Will Leitch said the equity crowdfunding bill has the potential to place the industry on a firm foundation "despite the criticism of the legislation emanating from various sectors of the early-stage funding market".

"We have now had a chance to fully digest the legislation and has a completely different view to most of the industry," Mr Leitch said.

"We believe it achieves its twin goals of protecting both investors and companies, and, at the same time, will allow significant capital to be unlocked to help drive a considerably under-capitalised sector of the economy."

Mr Leitch dismissed concerns that the cost of converting to a limited entity, at $550, is expensive and complicated.

"Requiring three directors is simply good governance as it sets up small businesses for the long term by encouraging them to enlist skills outside their businesses that will help critically analyse their business models.

"An independent auditor is [also] critical. Although relatively expensive, independent auditing gives investors the necessary peace of mind, especially where companies won’t be cash-flow positive for several years," Mr Leitch said.

But Kliger Partners principal lawyer Jeremy Goldman reckons the Crowd-sourced Equity Funding bill is a "golden opportunity lost".

"It is disappointing that the government, after an extensive consultation period with the sector, has failed to listen to and address the concerns of its target audience," Mr Goldman said.

"The proposed bill restricts the ability to source funds via crowdfunding platforms to 'small unlisted public companies'.

"As most 'start-ups' are small proprietary companies (initially hoping to avoid the increased regulatory burden imposed on unlisted public companies) this restriction immediately cuts access to what could have been an important source of equity funding.

"Further, only companies with less than $5 million in assets will be eligible to utilise the new provisions and these companies will be limited to raising $5 million a year – although the cap does not apply to sophisticated or professional investors.

"Additionally, retail investors participating through these proposed crowdfunding platforms will be limited to investing $10,000 per company per year," Mr Goldman said.

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