Invited to speak for EESC by European Crowdfunding Network alongside industry experts and European networks such as ESMA, ( EU Securities and Markets Authority) EBA ( EU Banking Authority), FESE, EVCA and EBAN. The conference participants were crowdfunding professionals and policy makers who operate in the European financial services ecosystem. http://convention.crowdtuesday.org/
The event was held in Paris as France seeks to be the European capital of Crowd funding – the week of this event has multiple events across France supported by the French Government.
My speech covered in brief the work of the EESC on crowdfunding and microcredit, but the greatest emphasis was on entrepreneurship and social entrepreneurship and how crowdfunding supported growth and innovation. I described the leverage that crowd funding could bring, and then its value towards growth and jobs, innovation and sustainability.
In today’s changing world with multiple challenges the solutions will come from the people and from communities. The mechanism of crowd funding allows for leverage of funds , but additionally investment in the form of knowledge, networks , new markets, employment opportunities, regeneration, research, development and CSR – the greatest advantage is a s the driver of change.
I appreciated this quote from Candace Johnson the current Chair of EBAN, EU Business Angels Network after she praised my presentation because I highlighted the value of entrepreneurship
"There are no social entrepreneurs. Entrepreneurs, by definition, do what is needed to bring about change, being freedom of choice or democratization of access to funding. The way they do it is by believing. And their ability to communicate and convince people that they can bring this change is what is important”
The UK crowdfunding market is 17 times greater than the French market, which is approximately worth 1 million Euro. The UK have implemented an industry Code of Conduct with positive result and trust in the market. The French, Italians, Finnish and many other countries have over regulated the market and caused possible restrictions on lending.
Dis-intermediation is an important factor of disruption for established business models and the impulse crowdfunding gives today may well change the understanding of finance to the same degree as internet search has changed the area of knowledge exchange.
Crowd funding is democratic, inclusive and it engages citizens
Therefore the following recommendations should be considered moving forward
- Establish a common terminology
- EU approach needed
- Data analysis of different rules, national laws
- Possible quality label
- Harmonisation of information for investors – prospectus development
- Harmonisation with US rules ( ref US JOBS Act )
- Make venture Capital funds more friendly
- Creation of an E-zone ( concept presented to Juncker ) – Free market for entrepreneurs, investors, workers.
- Review of national case studies to share good practice and success models
- Review of all finance models and how the funding gaps can be filled, better work together.
- Create a Crowdfunding Investment Platform to allow the emergence of new crowdfunding platforms.
- Establish a Code of Conduct , transparency should be the goal
A Review of Crowdfunding Regulations in Europe, North America and Israel, realized with the precious contribution and work of over 30 law companies can be downloaded for free on the ECN our website.
Furthermore, ECN, together with EBAN, ELITE, EIF, BAE and YES, recently submitted a policy paper to President Juncker to ask for the creation of an E-Zone for Europe's Innvoators, Entrepreneurs and Investors. You can read the full text here.
EESC recommendation :
1.Own initiative Opinion from EESC on harmonisation across EU for fully function EU crowd funding and to reduce over regulation in each country. Look at ways to prevent market fragmentation – EU commission are currently looking at crowd funding but unsure which direction to take
- Consider an opinion to review crowd funding in the context of entrepreneurship development and especially social entrepreneurship leverage
Testimonial from the organisers :
Thank you so much for being in Paris today to speak at the ECN Crowdfunding Convention.
We had a great and enthusiastic start thanks to you. It is a pitty you could not stay for dinner, but you left a very good impression of course. I had a lot of talks with people that were very inspired. Even people from Ministries.
And I think Candace put it right, that it is people like you who make the world go around and not regulators nor investors, these should act as enablers.
Thank you for the opportunity to represent the EESC and its opinions at this event. I have been approached by several organisations who wish to learn more about what we are doing. I will follow up on this and keep you informed.
Copies: EESC President
Group 1 President
Group 1 Secretariat
SOC Section president