Australia: How-to crowd fund: Q&A with CEO of Xinja Holdings Limited

Last year Australia passed legislation to allow certain companies to access crowd-sourced funding (CSF). The CSF regime allows companies to raise funds from retail investors, the so-called 'mum and dad' investors, of up to $10,000 per retail investor each year. This source of funding was previously inaccessible to most start-ups and SMEs due largely to the onerous disclosure obligations which often make this avenue expensive and time-consuming. In contrast, the CSF regime is intended to provide an innovative, accessible and cost effective way for companies to source capital, with the entire CSF process conducted via an online equity crowdfunding platform.

Our client Xinja Holdings Limited (Xinja) was the first cab off the rank and recently closed its CSF offer raising in total close to AUD 2.5 million from 1,222 investors. We think that is an impressive effort, so we sat down with Xinja's CEO, Eric Wilson, and asked him some questions that we thought would be of interest to other businesses considering raising money through CSF.


A: We said from the word go we would open an equity crowdfunding round as soon as it became legally possible in Australia and that's what we did - we were in fact the first raise that opened. The reason being, we are building a bank with our customers, and part of that is giving them a chance to own a piece of the action in order to benefit from any success we have. Plus we had seen equity crowdfunding run in other markets for neobanks with some success as a means not just of raising money but further engaging their customers.


A: The point about equity crowd funding is not so much the vertical as the opportunity for ordinary people to invest in early stage companies, so there is no reason why this would not work across many industries, as long as the offer is compelling and the business case is sound.


A: It's important to have a strong base of enthusiasts or a marketing budget that will allow you to reach a relevant audience. The offer document must be compelling, which means a lot of rigour around building and substantiating the business case. You need to be ready to talk to potential investors and answer their questions in detail. You also have to be very responsible about explaining the risks. In many cases these people are not seasoned investors but ordinary Australians parting with hard-earned cash so we felt a significant responsibility to make sure they understood what they were doing, had read all the relevant documentation and were not investing what they couldn't afford to lose. A good platform or user experience that makes the process easy and transparent is also a must.


A: I think the main thing to remember is that it isn't "just money" you are raising. It is real people's savings, their efforts, and in many cases their hopes and dreams. Don't take the responsibility for those things lightly. This is absolutely not free money. Work closely with your intermediary, but don't be afraid to get them to reach out to ASIC on your behalf, or indeed do it yourself if you are uncertain or need guidance. We found ASIC to be very reasonable and rational in the way they handled our crowdfunding, but remember there are rules, they are there for a reason, be sure to follow them. Finally I would make sure you understand that people don't just magically turn up and give you money in a crowd fund, we had been talking to potential customers and investors through various channels for nearly 6 months before we did the crowdfunding. Crowdfunding is just the vehicle. All the other work still needs to be done.


If you are considering raising capital through CSF, the first step is to ensure that your company is eligible.Importantly, at this point in time CSF is only available to public companies, so a proprietary company will need to convert into a public company before it can make a CSF offer. This will require a 'special resolution' of the company's shareholders and may necessitate the adoption of a new constitution and a restructure of the board (to be eligible a majority of the company's directors must ordinarily reside in Australia and a public company must have at least 3 directors). Some other things to think about are:

  • OFFER PRICE: It may be necessary to conduct a share split in order to be able to offer marketable parcels of shares. In Xinja's experience more than 50% of its investors invested $500 or less, and more than half of those investors invested only $250.
  • RETAINING A SHAREHOLDERS AGREEMENT: If your company has a shareholder's agreement, you will need to consider whether to keep it in place or terminate it and rely solely on the company's constitution.Strictly you may make a CSF offer subject to a shareholder's agreement, but many of the usual mechanics of a shareholder's agreement may become unworkable if there are hundreds of shareholders involved.It may make more sense to incorporate any rights that shareholders wish to retain (such as pre-emptive rights on share issues) into the company's constitution.
  • OFFER DOCUMENT: While a company doesn't need to prepare a 'prospectus' and lodge it with ASIC, the CSF regime requires an offer document to be prepared and prescribes certain information that must be included in this document. As Eric indicated in our Q&A session, you will need to present a sound business case to entice investors, which will involve demonstrating where the value in the offer lies.This document must be clear and concise and must not contain any false or misleading statements.
  • MARKETING CAMPAIGN: It seems a key to Xinja's success was its well thought-out marketing campaign.While in Xinja's case investors aged 55 - 64 invested the most on average, investors aged 25-34 invested most frequently on average. This may make social media an attractive option to drum up interest for a CSF offer, but be aware that almost any statement published about a CSF offer (even one yet to be made) must contain a risk warning and refer the reader or listener to the offer document.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Suzette Caldaroni
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions