Thursday, March 27, 2014
The European Commission are expected to publish a report on Crowdfunding today, Thursday 27 March 2014. This follows a consultation document from the Commission in October of last year. The publishing of the report is timely in that it coincides with new rules published this month by the FCA in the UK, due to come into force on April 1st. With low deposit rates for would be investors and conventional finance opportunities being slim for start-up businesses, the tide is quite clearly shifting to the crowdfunding model as an alternative form of finance. Given the size of the crowdfunding market (Europe, €1 billion in 2013, representing a growth 25% from 2012 and a 55% growth from 2011, with a global market size understood to be in the region of €5 billion in 2013) it is not surprising that there is a flurry of activity and debate to create environments in which the model is sustainable while protecting the vulnerable and combatting abuses. Yet there is very little happening in this jurisdiction. Crowdfunding by its very nature raises a host of legal issues and touches upon a wide spectrum of legislation in Ireland, most of which were enacted in different times or for other purposes – making it difficult to understand for companies looking to set up in Ireland. We need to change with the times. Only last month, the French government open its doors to Crowdfunding by formally relaxing its rules in this area – meanwhile our nearest neighbours and competitors in the UK have a working regulatory framework (although not without criticism). There is a real opportunity in Ireland to build upon the successful digital start-up community currently thriving here – by becoming a real voice in the international debate, and providing clear guidance to companies that are thinking of setting up platforms here. The clock is ticking.
For more information please contact Eoghan Doyle on (01) 237 3700