Crowdfunding has started to take ground in Asia as well and the countries in the region are reacting to this innovation quite promptly. After India and Japan, it’s now Malaysia’s turn, which just released a set of drafted rules for equity crowdfunding.
The future of Asia’s crowdfunding industry is looking to change in a highly promising manner as a number of countries have pronounced their ambitions for crowdfunding. Singapore aspires to be the crowdfunding capital of the region, and has pronounced this claim by hosting the very first Asian crowdfunding summit, a promising first step. Last week it was announced that London is the world’s crowdfunding capital, based on some recent statistics published by a crowdfunding research institute, which showed that the British capital was the city with the highest number of crowdfunding campaigns launched per day. The announcement comes as little surprise, considering that the incredible growth of crowdfunding in the UK was already in the air. A very open mindset with regards to innovation and technology, on the one hand, and a prompt answer from the local authorities - that reacted to the growing phenomenon putting in place a regulation -, on the other hand, allowed British crowdfunding to flourish at very fast pace. “Economic Crisis”. A term we heard a lot in recent years and, unfortunately, we still hear today in Europe and in the US. Yes, because the economic crisis is still a reality in many cases, especially among small businesses, one of the backbones of western economies. In the US, an “accreditated investor” is defined as the individual who 1) had High Net Worthearned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years AND reasonably expects the same for the current year; OR 2) has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence). These criteria have not changed much since the 80’s and they currently allow about 7% of the US population to be qualified as such. However, the SEC is considering to modify the definition, potentially making more stringent the requirements, which could severely hinder US early stage finance market. Together with the UK, Germany is the biggest market for securities crowdfunding in Europe. In fact, German platforms have been up and running for a few years now, allowing more than 100 projects to raise seed capital from crowdinvestors and reaching record-breaking sums, like the €3 million recently raised by a startup only in a few hours. The phenomenon has been developing within the current legal framework which did not pose too stringent controls over the platforms and the issuers. Until now. In fact, the German government has proposed in the past days a draft bill which aims at increasing protection of small investors (i.e. Small Investors Protection Act). Peer-to-peer lending in the UK is growing at an incredibly fast speed. Favored by FCA’s rules that treat peer-to-peer lending in a different way than equity crowdfunding, which is considered riskier, and by the tax discount (New ISA) which has been available since beginning of July, this new mechanism for borrowing capital is becoming more and more popular. |
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