Crowd investment across Europe has opened up additional access to capital for small and medium-sized enterprises

 "For five years now, the European Commission has been resolutely pursuing the goal of a European capital markets union. Much is happening in new areas such as crowdfunding. The new regulation on the European Crowdfunding Service Provider (ECSP) could give this new impetus. This will apply from November 10, 2021 and brings some innovations. 

For example, crowdfunding platforms will in future be able to offer private investors securities and loans across Europe. Loans from private individuals to private individuals, so-called peer-to-peer lending, or more donation-oriented crowdfunding are not covered by the regulation. 

All in all, it is primarily regulating crowd investing anew. Another important innovation is that in future issuers will be able to acquire up to five million euros without a prospectus over a period of twelve months. It has been possible in some countries, including Germany, to collect up to eight million euros without a prospectus. But because this was only a European recommendation, it led to a patchwork quilt within the EU that has now been replaced. 

Instead of a prospectus, there will be a six-page information sheet in future. Because so far you could only offer this in Germany through a bank. “That was the reason that it hardly played a role in Germany so far. The costs for the complex contracts were in the six-digit range. I expect possible savings of up to 90 percent. " 

 The most important change is the possibility of being able to offer investments across Europe in the future. This opened up further opportunities for small and medium-sized companies to obtain capital. “Crowdfunding is also the digitization of established financing channels. Business angels, venture capitalists, but also more and more issuing houses have discovered digital sales for themselves - not least in the Corona crisis. Crowdfunding has grown out of the start-up corner and has become more diverse, ”says El Mallouki. And the potential is great. The ordinance creates the basis for emissions with larger volumes than was previously the case."