In October 2013, Crowd Valley published a post explaining the current situation regarding securities crowdfunding in France. In fact, at that time, the French Minister of Small and Medium Enterprises had just announced the opening of a public comment period on the proposed regulation for securities crowdfunding. Four months later, the public consultation is officially closed and France has a new regulation for crowdfunding.
We have summarised below the main changes that the new regulation brought about:
The French Minister for SMEs has announced that the new regulation aims to bring a breath of fresh air to French companies and startups and its effectiveness will be evaluated in six months’ time.
References
Harmant, O. (2014) .Fleur Pellerin : « Avec cette réforme, nous voulons décrocher la médaille d’or du financement participatif ». Frenchweb.
Laderer, E. (2014). La France déroule le tapis rouge pour le « crowdfunding ». Les Echos.
Photo Credit: Procsilas Moscas: https://bit.ly/p/7i33W
- Companies can now raise up to € 1 million through equity crowdfunding portals. Compared to the previous limit (i.e. € 100,000) this is a significative improvement, that will allow French start-ups to use crowdfunding as a valid alternative to traditional equity capital sources. Equity crowdfunding platforms won’t be restricted to professional investors - any adult will be able to invest.
- The bureaucratic documents that companies need to present to be listed on crowdfunding platforms have been drastically reduced. The new regulation only requires a document of 4-5 pages with information concerning the company, its activities and its financial situation.
- The new rules also introduce an investment limit for lenders and borrowers on P2P lending portals: lenders won’t be able to invest more than € 1,000 per project, while borrowers will be able to raise up to € 1 million of debt capital per year.
- Equity crowdfunding platforms will need to register as “conseiller en investissement participatif” (CIP) - i.e. crowdfunding investment advisor - while P2P lending portals as “intermédiaire en financement participative” (IFP) - i.e. crowdfunding intermediary. In order to be nominated as a CIP or IFP, the platforms will have to comply with certain transparency requirements.
The French Minister for SMEs has announced that the new regulation aims to bring a breath of fresh air to French companies and startups and its effectiveness will be evaluated in six months’ time.
References
Harmant, O. (2014) .Fleur Pellerin : « Avec cette réforme, nous voulons décrocher la médaille d’or du financement participatif ». Frenchweb.
Laderer, E. (2014). La France déroule le tapis rouge pour le « crowdfunding ». Les Echos.
Photo Credit: Procsilas Moscas: https://bit.ly/p/7i33W
About the author - Irene Tordera
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.
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