Crowdfunding: Helping investors and businesses seize their potential
EUROSTAT surveys from across the EU indicate that obtaining external finance is a major barrier to business start-ups across all socio-demographic groups. Apart from use of own funds, the main sources of financial support come in the form of bank loans, public authorities and venture capital. Access to these sources is vital, especially for women and youth, as these are the categories of entrepreneurs most likely to be targeted by innovative funding opportunities.
Crowdfunding is one of the new and emerging policy actions for financing business start-ups. It hinges on the idea that financing comes from a multitude of people who invest small sums of money, rather than from a single large institution, usually via internet. In investment-based crowdfunding contributors purchase financial instruments, and therefore the intermediary role played by the crowdfunding platform may be deemed to be an investment service. The online nature of crowdfunding platforms’ operations has made it feasible for them to offer their services to a great number of persons including individuals from different Member States.
Policy-wise, there is an increasing request for better regulation. The European Commission has proposed a regulation that aims to establish uniform rules on crowdfunding at EU level. MEUSAC will be organising a consultation session in order to gather the viewpoint of stakeholders regarding the cross-border and transnational features of the proposal which can serve as an opportunity for Maltese start-ups.