Crowdfunding could be regulated, but what are the risks?

British FlagCalls for ‘crowdfunding’ to be regulated could be heard as early as next April when new rights for consumers come in to play.

But with so many internet platforms popping up, the catch-all term can be confusing.

It is used to describe a large group of people all contributing cash towards anything from charitable causes or campaigns, to businesses looking for start-up capital.

Through an internet platform such as Kickstarter or Crowdfunder, you could have your independent film funded by charitable individuals and promise of a non-financial return such as a cinema ticket when it’s made.

Alternatively, ‘peer-to-peer’ platforms such as Funding Circle, Ratesetter or Zopa, allow people to invest in businesses and take home returns of between 4-6.9 per cent, beating the banks’ best savings rates.

But what if the film is never made, or, worse still, the business you’ve invested in goes bust?


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