Guest post by iCrowd.com
As
Americans wait for the SEC to develop final rules and regulations for the JOBS
Act, several international crowdfunding platforms have already embraced this
innovative financing option for entrepreneurs. Equity-based crowdfunding
allows investors (accredited or non-accredited) to invest in businesses in
return for equity or shares. Investment Crowdfunding is currently legal in
Australia, the UK, the Netherlands, France, Belgium and Germany.
Across
the globe, all forms of crowdfunding raised $2.66 billion in 2012, up from
$1.47 billion in 2011 according to a Massolution survey. The same Massolution
survey predicts crowdfunding in 2013 will raise $5.1 billion. Of the
total crowdfunding volume, equity crowdfunding accounted for $116 million and
grew 30% in 2012.
Currently,
there is no Europe-wide regulation in place that focuses specifically on
crowdfunding websites. However, there are country-based financial regulators
overseeing some of the equity crowdfunding taking place internationally. Two
Britain equity crowdfunding sites, Crowdcube and Seedrs have been authorized by
the Financial Conduct Authority in Britain.
Crowdcube
was founded in 2010 and based in the United Kingdom, Crowdcube has successfully
funded over £8.2 million (USD $12.16 Million). The site relies on both
non-accredited and accredited investors. Before investing, non-accredited
investors must first pass a quiz on the risks involved with private equity
investing.
In
addition to Crowdcube, there are several other UK-based equity crowdfunding
sites. Seedrs, a founding member of the UK Crowdfunding Associaion, launched in
July 2012 and surpassed the £1 million funds raised mark within months of their
launch. FundtheGap launched earlier this year and has not disclosed the
amount raised so far on their platform but has pledged to invest between £500
and £50,000 in every single business listed on their site. SeedUps is a UK and
US based crowdfunding platform that has raised over £33m in funding.
In
Australia, the Australian Small Scale Offerings Board (ASSOB) promotes capital
raising crowdfunding. On the site, businesses can raise from 50,000 to $5
million. TheASSOB site reports that as of February 2013, the platform has
helped raise in excess of $133 million dollars and funded 132 businesses since
they were established in 2005.
So
what does international equity crowdfunding success mean for the United States?
John Callaghan of iCrowd states, “The international crowdfunding success is an
indicator of the financing opportunities entrepreneurs will enjoy in the United
States once the SEC finalizes regulations. Internationally, hundreds of
businesses have successfully secured funding, enhancing job growth and
stimulating local economies.”
Crowd
diligence works
Fraud
has been one of key concerns voiced about equity crowdfunding. Since 2005, the
ASSOB has had zero reports of fraud. According to Ronald Kleverlaan,
co-founder of the European Crowdfunding Network, there has been no fraud
reported. Crowdcube, the leading UK-based crowdfunding platform has also
reported zero incidence of fraud. Others voice concern over the risk involved
with non-accredited investors investing in start-ups. Powerful networks and
online communities have helped enhance investor decision-making in the
countries where equity crowdfunding is legal. Start-ups are put on
display for the entire investing crowd to evaluate whether companies warrant
investment.
Investment
Crowdfunding has been embraced in several international markets. The lessons
are: small businesses find capital from a willing and enthusiastic group of
supportive investors; local economies benefit from new capital sources that
bolster small business growth; and that the transparency of Investment
Crowdfunding has done a good job at mitigating the risk of fraud, which remains
principally an abstract fear.
Sources:
Australia
– ASSOB - http://assob.com.au/
Keine Kommentare:
Kommentar veröffentlichen