Friday, October 17, 2014

Cultivate Your Crowd

In a recent survey conducted by the European Commission on financial and security markets, a majority of respondents felt that crowdfunding campaigns with social objectives merit special treatment from the regulators.

The consensus is that social ventures and those behind the ventures should not be limited to the donation or lending based funding opportunities. Equity crowdfunding should be a viable option. However, a need to define social enterprise and the kinds of social objectives are critical and respondents agree that transparency is a must if social ventures are to get special treatment. Most suggested ex post verifications (e.g., audits, social impact assessments, or periodic reporting). Some respondents call for a favorable tax treatment for these social ventures, some prefer lighter regulations, and few mentioned the need to harmonizes impact measures and warned against any sort of regulatory interventions in this sector. The commission stated that it will explore this in more detail in future efforts.






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