These are the minnow unlisted companies of which some, at least, if only they had access to capital, could go on to great things.

From September 29, this year, crowd-sourced platforms will be able to apply for a licence that will enable small investors to invest up to $10,000 per company per year through the platforms.

These platforms must perform some basic checks on companies and their directors, as well as on offer documents.

Public unlisted companies that are limited by shares with less than $25 million in assets and in turnover can source up to $5 million a year through equity crowdfunding.

Small proprietary companies, the structure through which many family companies are held, cannot access crowd-funded equity. However, the government intends to eventually extend crowd-sourced equity funding to these companies.

There is relief for newly registered or converted public companies that access crowdfunding from certain reporting, auditing and corporate governance obligations for up to five years. This includes not having to hold annual general meetings.

All of this is great for the companies and will lower their compliance and administrative hurdles and costs. And Australia is only catching up with others, such as the United States and Britain, that have had crowd-funded equity funding for a while.

It means investors will get less information than if the company was raising capital for a listing on the sharemarket - though some companies will provide plenty of information.

Start-ups, early stage and small companies in general are usually riskier for investors than their larger counterparts with established track records that are listed on the sharemarket.

And even then, the record is not so great. Of the floats on the sharemarket over the past decade, only 50 per cent of new floats on the Australian sharemarket are trading above their first-day closing price.

Ben Griffiths, a co-founder of Eley Griffiths Group, a fund manager that specialises in smaller Australian companies, says there are inherent risks in investing in unlisted public companies.

Usually, there's not much financial information in the public domain about the company, very little independent analysis and the directors are often not that independent, he says.

Investors have to understand that often there will not be a buyer for their shares when they want to sell out and even then, it might not be for the price they were expecting, Griffiths says.

Peter Townsend, of Townsends Business and Corporate Lawyers, says investors not only need to do their own checks on the companies before handing over their money, but also on the crowdfunding platforms themselves.

"Crowdfunding sites may have limited operating records, may not have robust compliance or governance systems, or do inadequate checks on companies on their platform," he says.

In fact, Townsend questions whether investing in emerging companies through "speculative" equity crowdfunding platforms is a place for the trustees of DIY funds at all.

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