Last month, CI highlighted a report distributed by Eurocrowd that described the crowdfunding marketplace as struggling with compliance, which outlined six areas of concern for the sector.
The report follows the harmonization of rules for the European crowdfunding sector under ECSPR, a new regulation that sought to boost online capital formation, supporting both founders and investors. One of the biggest challenges impacting EU-wide online capital formation is that each member state, which must approve a platform, does so in different ways.
In a follow-up, Eurocrowd has posted a “leaders and laggards” missive while not mentioning an individual platform’s status by name.
In a review of 236 platforms as of July, the post states:
- Platforms evaluated: 236 (9 excluded due to no available data)
- Average compliance score: 5.0 (scale 0–10)
- Median score: 5.0
- Range: 0 (non-compliant) to 9 (highly compliant)
- Outlier country average: 7.0 (suggesting strong oversight or platform maturity)
- Four other countries: averages above 6.0, including the Netherlands
- 11 countries, incl. Spain and France: below 5.0 average
- Top performers: 3 platforms rated Excellent
- At risk: 29 platforms flagged for serious shortcomings
- Strong transparency adherence: 25% of platforms
- Failed baseline expectations: ~40%
Only a single platform was rated as “good.”
Eurocrowd predicts that superior platforms can highlight their operations while low performers may have to deal with “reputational and regulatory risk.” Perhaps, even litigation. Eurocrowd also posits there is a need for “active supervision and harmonised reporting templates. Expect the development of regulatory leadership in a few markets, attracting additional CSP in those legislations over time.”
