The French regulations address the three main types of crowdfunding: Equity, debt and donation based crowdfunding. The Industry grew at a rate of approximately 200% from 2013 to 2014. There are no restrictions on the number of investors in any particular pitch. Companies are able to raise up to €1M per crowdfund campaign.
Three Types Of Crowdfunding Portals/Intermediaries
- Investment portals/intermediaries have been divided into three categories:
- Loans, either interest free or generating interest, this asset class falls under the category of intermédiaire en financement participatif (IFP).
- Securities including equity, these intermediaries would come under the conseiller en investissement participatif (CIP) undefined
- There is also the prestataire en services d’investissement (PSI) that may offer securities as well. undefinedundefined
- All three types of securities platforms must be registered with ORIAS (Assurance, Bank of France). All investment are compelled to comply with detailed requirements.
- Portal managers are expected to have a background in banking or finance and must not be bad actors.
In order to enable platforms to get paid by companies as well as the investors they must:
- register as a crowdfunding investment advisor.
Understanding The Risks:
- French crowdfunding platforms are required to prominently display the risks involved with investing in unlisted securities.
- Any investor must affirm they understand completely that they may lose their entire investments prior to participating in crowdfunded offers
- No maximum investment, but the platform will have to check that people have enough savings to support a potential loss.
More information:
http://www.crowdfundinsider.com/2014/10/51484-french-crowdfunding-laws-now-force/
http://www.crowdsourcing.org/editorial/french-crowdfunding-regulation-an-overview/30712
https://www.scribd.com/doc/241715323/Crowdfunding-France (In French)
Photo credit: Nathan Hughes Hamilton via Flickr
Tags: Regulation