Brussels based Bruegel has published an in-depth report on equity crowdfunding.Bruegal is a European think tank that focuses on economic issues and have a stated mission to provide impartial fact based research and analysis. With investment crowdfunding a hot topic around the world as entrepreneurs see opportunity to raise capital and some politicians see a catalyst for economic growth, Bruegal has hit the topic from all angles. They note that while equity crowdfunding gets a lot of press it still represents only a small portion of the overall “crowdfunding” market. Bruegal attempts to assess the potential of crowdfunding and recognizes the challenges – such as the disperse regulatory environment – along with the inherent risk to investing in small companies. Bruegal bases part of their findings, at least in part, on the widely quoted Massolution report from 2012.
Noting the accessibility driven by the online nature of equity crowdfunding they see potential but clarify that to maximize benefits a common regulatory approach across nations would be best.
Bruegal states; “In conclusion, all types of crowdfunding can provide significant and new sources of funding for many types of organisations, ranging from charities to companies. Equity crowdfunding, however, is more complex and requires the proper checks and balances if it is to provide a viable channel for financial intermediation in the seed and early-stage market in Europe.”
The report is embedded below.