The question I get asked most: how do you actually invest in these Aussie startups? Here’s the honest answer. This is general information, not advice. Talk to your accountant or a licensed adviser first.
Path 1: retail, through equity crowdfunding
Platforms like Birchal and Equitise hold licences from ASIC to run crowd-sourced funding offers. Retail investors can put in up to $10,000 per company in any 12 months, and some offers start from as little as $50. Birchal says it has helped raise about $218M across more than 300 offers since 2017.
Most startups fail, so the risk is real. You should expect to lose money on plenty of them.
Path 2: wholesale
This is where the bigger deals sit. To qualify as a wholesale (sophisticated) investor you generally need an accountant’s certificate showing either:
- net assets of at least $2.5M, or
- gross income of at least $250,000 in each of the last two years
Those thresholds haven’t changed in decades, though raising them has been debated. Once you qualify, you can be offered pre-IPO rounds, venture funds and syndicates that retail investors can’t access.
Some people look at investing through a self-managed super fund. The rules there are less clear cut, with a recent AFCA ruling pointing to a separate $10M test for super funds, so get proper advice before going that way.
The catch
As a wholesale investor you lose retail protections. Offers usually come without a Product Disclosure Statement or prospectus, and you may not have access to AFCA if something goes wrong.
My read
Crowdfunding is the easy door in, and small cheques are the right way to learn. Wholesale is a different game with fewer guard rails. Either way, only put in money you can afford to lose.