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  • Writer's pictureFlynn Isaacs

What is an intermediary's due diligence process for an equity crowdfunding raise?

Click here to view OnMarket's live investment opportunities.

There are many factors an investor must consider when undergoing due diligence for a potential investment. This includes legal, financial, business, and management information that must be obtained to make an informed investment decision.

Although this process can feel overwhelming, OnMarket assists investors in conducting due diligence through its Gatekeeper Commitment for all equity crowdfunding investment opportunities listed on the website.

As an Australian Financial Services Licensee, OnMarket can operate a platform for equity crowdfunding offers and investments. As a Crowd-Sourced Funding intermediary, our responsibilities under ASIC regulations include:

  • conducting good fame and character checks on all directors

  • checking a company’s eligibility for equity crowdfunding

  • ensuring the offer document is factual and contains the business information required

  • making sure all investors are made aware of the risky nature of investments under the crowdfunding investments

Our selection process

To assist your due diligence when making investment decisions, we do two things when selecting companies to make offers on our platform under the Crowd-Sourced Funding (CSF) Regime:

  • Leverage our commercial judgement, and 110 years of combined experience, to bring retail and high-net-worth investors opportunities that are attractive

  • Execute the legally required checks outlined above

As part of our approval process, we focus our analysis on 5 pillars: Business, People, Financials, Legal and Risks. Our goal is to ensure the campaign documents contain material information on these 5 pillars so you can make an educated investment decision.




Companies are required, at a minimum, to include a business plan that includes:

  • a description of the business

  • an outline of the business objectives and strategy

  • a revenue model

  • an overview of the business and organisational structure


OnMarket will undertake several checks on all relevant individuals including:

  • verification of names and addresses of directors and senior management

  • background checks on directors and senior management to check if they are of good fame and character, including any criminal and/or civil offences, disqualification from managing a corporation or involvement in an insolvent company


The assessment of the financial position and prospectus undertaken by OnMarket will be dependent on the stage of the company. This might involve:

  • reviewing historical financial performance using statutory accounts and/or management accounts

  • asking directors to confirm that the accounts comply with accounting standards as required

  • reviewing the company’s cash position using the most recent bank statements

  • where available, reviewing the company’s forecasts based on a financial model or budget and request justifications behind these forecasts (financial forecasts might not be made available to investors)


When considering the legal and capital structure of companies raising capital on our platform, we generally:

  • undertake an ASIC register check on the company to confirm the company identity

  • perform checks on directors and senior managements as outlined in the People pillar

  • review related party payments, and detail whether any of the funds raised will be paid to current or proposed senior management or directors.


Companies raising under the equity crowdfunding regime are required to disclose risks that may specifically impact the business in their offer document. These may include:

  • specific risks associated to the company’s industry and sector

  • protection of intellectual property

  • requirements for necessary regulatory approvals

  • supply of specific raw materials

  • the need for additional funding

Other things worth noting

It is important to note that OnMarket does not endorse any of the companies raising funds on our platform, nor do we provide investment advice. Before making any investment decision, we always recommend you undertake your own research.

This should include reading the offer document carefully and may also involve reviewing all the available information provided in the campaign, asking questions directly of the company management via the OnMarket communication facility, and understanding the risks associated with investing in early-stage businesses.

Click here if you would like to read more about OnMarket’s gatekeeper commitment.


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