Equity crowdfunding is a step closer in Australia with the corporate regulator announcing yesterday that it would accept licence applications from September 29.

Equity crowdfunding is a new fund-raising system that could provide small companies with alternatives to venture capital and the ASX.

The system involves listing on a crowdfunding platform and receiving capital from a group of individuals in exchange for equity. It’s like a Kickstarter campaign — but instead of getting early access to a product, backers get a chunk of the company.

Under the new regime small companies will be able to offer shares to retail investors via a licensed platform.

It’ll be up to the intermediaries — those platforms, which must have a financial services licence — to make sure companies are toeing the regulatory line.

To date, similar platforms such as Equitise and VentureCrowd have only been allowed to offer the service to “sophisticated investors” — people who have sufficient experience to weigh the risks and merits of an investment opportunity.

It’s been a long road to get to this point — four years of debate and talking the government out of ideas such as forcing businesses to become a kind of unlisted public company

ASIC commissioner John Price said that the new system balances the need for regulatory oversight with supporting innovation.

“ASIC welcomes the start of the new crowd-sourced funding laws. Crowd-sourced funding helps both startups and small to medium sized businesses and investors access the opportunities that are available from an innovative economy,” he said.

One complaint, which Stockhead covered last month, is that Australia’s equity crowdfunding system is set to be over-regulated and deter the very small, time-poor and cash-poor companies it’s supposed to help.

The other, that equity crowdfunding is just another kind of Kickstarter campaign, hasn’t yet tarnished the concept which has been in action globally since the early 2010s.