The Perfect Regulation of Crowdfunding: What Should the European Regulator Do?

Sebastiaan N. Hooghiemstra () and Kristof Buysere
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Sebastiaan N. Hooghiemstra: University of Liechtenstein
Kristof Buysere: Tilburg Law School

A chapter in Crowdfunding in Europe, 2016, pp 135-165 from Springer

Abstract: Abstract More and more SMEs use crowdfunding to raise funds from a large audience by means of a cost-effective effort. Crowdfunding helps SMEs to overcome the demand for capital for early-stage (equity) financing. The traditional availability of financing, such as bank lending, venture capital and angel investments, are not available to most start-ups and other SMEs. Offerings are, thus, more and more promoted through crowdfunding portals. Funds through this channel of financing are typically raised from a larger number of contributors in the form of relatively small contributions. It is therefore very obvious that more and more firms have started to use this medium for this goal. Regulations on the national and European level, however, heavily limit mechanisms to promote offers and campaigns to a wide range of potential investors. In addition, company laws and banking and securities regulations hinder the emergence of an ecosystem with platforms that can offer the infrastructure for internet-based campaigns. This paper particularly explores these (mainly European) obstacles, and proposes remedies.

Keywords: SMEs; Public offerings; Crowdfunding; Private company law; MiFID (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1007/978-3-319-18017-5_10

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