Shareholder (Dis)empowerment Through Crowd-Sourced Equity Funding

(2023) 46(1) University of New South Wales Law Journal (Forthcoming)

Monash University Faculty of Law Legal Studies Research Paper

44 Pages Posted: 20 Oct 2022

See all articles by Steve Kourabas

Steve Kourabas

Monash University - Faculty of Law

Date Written: July 01, 2022

Abstract

The introduction of crowd-sourced equity funding (CSEF) into the Australian corporate fundraising landscape sought to give effect to the democratisation and direct participation goals of the FinTech movement. CSEF offers a useful avenue for micro and small-to-medium enterprises to access funds from the ‘crowd’. However, this article argues that the current regulatory framework fails to give effect to the core principles underpinning CSEF as part of the FinTech movement. This creates a particularly vulnerable cohort of shareholders who are not given ‘voice’ in the corporation nor do they have the typical ‘exit’ options associated with public share ownership. The article proposes that corporate governance reforms should aim to enhance the distinctive attraction of CSEF as a corporate fundraising mechanism: the collaborative pursuit of non-financial motivations for investment, and the adoption of engagement mechanisms that advance efforts towards democratisation of finance and collaboration as a means of social interaction.

Keywords: Corporate Governance, Corporations Law, Crowdfunding, FinTech

Suggested Citation

Kourabas, Steve, Shareholder (Dis)empowerment Through Crowd-Sourced Equity Funding (July 01, 2022). (2023) 46(1) University of New South Wales Law Journal (Forthcoming), Monash University Faculty of Law Legal Studies Research Paper , Available at SSRN: https://ssrn.com/abstract=4247287

Steve Kourabas (Contact Author)

Monash University - Faculty of Law ( email )

Wellington Road
Clayton, Victoria 3800
Australia

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
71
Abstract Views
364
Rank
596,031
PlumX Metrics