Crowdfunding Platforms

  • EFA 

Crowdfunding is becoming an increasingly important form of financing for start-ups as well as small and medium-sized enterprises (SME). It offers significant chances for businesses regarding their funding – especially in the early stages – and hereby contributes to economic growth and welfare. Even though SMEs are a driving engine of the European economy, they often lack access to finance and are consequently unable to unleash their full potential. Crowdfunding platforms, as intermediaries between investors and businesses seeking capital, provide a solution for the issue mentioned above and should consequently be supported by a proper EU broad regulatory framework.

As the EU has correctly stated, in comparison to other major world economies the EU market for crowdfunding is poorly developed and will have to undergo significant changes. One of the key hurdles crowdfunding service providers are confronted with is the fragmented regulatory landscape in the EU. As a result of the extensive variety of heterogeneous national regulatory frameworks, platform providers are unable to offer their services across EU immediately, however, faced with the burdens and costs of identifying and complying with 28 different regimes across the EU. The differences in Member States legislation forbid significant cross-border capital flows, hinder access to capital for businesses and restrict investors’ freedom of choice.

Moreover, some Member States have imposed obligatory licenses on capital seekers. If project owners wish to collect money, they have to obtain the appropriate license. Such hurdles diminish the attractiveness of crowdfunding platforms, negatively influence the execution of platform providers’ businesses and lead to less funding overall. Therefore, the European Fintech Alliance calls for:

  • the replacement of national regimes with fully harmonised EU rules
  • the improvement of license requirements in the EU Member States to facilitate investments

If the EU’s Capital Markets Union is to promote alternative  forms of finance and if the EU’s goal is to support SMEs actively, then the above mentioned calls must be taken into consideration, since crowdfunding platforms have the potential to significantly contribute to the EU’s economy, foster innovation and increase the attractiveness of Europe for international investors.



Press Contact: Patrick Häuser,