Tag Archives: SyndicateRoom

Will Equity Crowdfunding have the power to revolutionise the way in which entrepreneurs seek finance in the future?

 

Mark Rashid

In a poll, 88% of those who attended MJ Hudson’s Future of Crowdfunding panel event believe that this is the case and the numbers speak for themselves.

Equity Crowdfunding is witnessing increasing levels of interest, especially from SMEs, with 5000 in the UK seeking funding through alternative finance. Over a 3 year period, crowdfunding has increased by 371% (Karma Sandup, Partner at MJ Hudson). This rapid growth of interest in alternative finance has attracted the attention of regulators, resulting in the recent publication of the FCA’s consultation paper.

In light of potential regulation, on February 19th 2014, MJ Hudson, the Alternative Assets Law Firm hosted a panel event around the issues arising from the FCA’s consultation paper for the future of crowdfunding. The event brought together senior management from across a range of predominant crowdfunding platforms such as, CrowdCube, Seedrs, SyndicateRoom and InvestingZone and centred around two main points of interest;

  • How will regulation affect crowdfunding?
  • Will crowdfunding survive?

 

Although some view future regulation of innovative finance as potentially damaging, members of the panel were united in stating that they did not see the FCA’s consultation paper as a threat to the future of crowdfunding. If anything, panel members supported regulation, as a way to brand crowdfunding as a credible financial option. Legal & Financial Director of Seedrs’, Karen Kerrigan highlighted that crowdfunding platforms are not cowboy companies and already adhere to regulation and stated that, “official regulation is a sensible move by the FCA”.

Commenting on the future of crowdfunding, Tom Britton, CTO of SyndicateRoom informed the audience, primarily made up of entrepreneurs and investors that, “the industry will survive, banks don’t want to touch this space, even venture capitalists aren’t keen, unless the prospects are very big”. To support this statement, during the panel event, the audience voted on a live poll. When asked, “Will Equity Crowdfunding have the power to revolutionise the way in which entrepreneurs seek finance in the future?” 88% of people said yes, whereas only 12% said no.