It has been announced last week that the European Commission (EC) has published a report on the EU crowdfunding sector, as part of its Capital Markets Union Action Plan. In doing so, the EC has recognised the growing importance of crowdfunding platforms – websites that allow fundraisers to interact with investors and donors – for the improved economic growth and job creation in Europe. Despite being acknowledged as relatively small at this moment in time, its rapid development has been noted, and for that reason, efforts are being made for crowdfunding to be appropriately regulated en route to becoming one of the key sources of financing for small & medium sized enterprises in the future.

Many EU member countries have already begun putting in national frameworks meant to protect the investors and at the same time support the development of the said sector. Even though broadly formulated for the most part, these frameworks have also been tailored to local markets and regulatory approaches, due to the nature of crowdfunding processes still being of predominantly local character. However, due to the noted rapid expansion of the sector, the EC has vowed to keep its developments under review by organising bi-annual meetings with regulators and sector representatives, as means of ensuring timely control over the general course of action.

From a statistical point of view, it should be outlined that approximately EUR 4.2 billion has been raised in the EU through crowdfunding platforms in 2015, compared to EUR 1.6 billion the year before. Furthermore, a common characteristic for most of the investments made in 2015 has been the promise of a financial return for those contributing the funds in the form of loans or equity stakes. Finally, the activity of the crowdfunding sector has been present in all EU member states, but with significant concentration in a few of them, i.e. with UK leading the way by a large margin.