#FinTechEU | #crowdfundingEU
Creating a more
competitive and innovative
financial market
The nancial sector is the largest user of digital technologies and a major driver in the digital transformation of
the economy.
HOW FINTECH IS CHANGING OUR LIVES
THE COMMISSION’S ACTION PLAN TO PROMOTE FINTECH
Easier and more uniform
licensing rules for new
FinTech activities
New EU rules to enable
crowdfunding
Align standards
Supervisors help FinTech
rms apply rules and
access market (‘innovation
facilitators’)
‘Regulatory sandboxes’:
Supervisors apply rules to
FinTech rms in exible and
proportionate way
Facilitate information
sharing on cyber threats
among market participants
Higher supervisory
convergence and
enforcement of IT risk
management
Increased EU coordination in
cyber threat testing
Assess whether current EU
rules are adapted to new
technologies (e.g. distributed
ledger technology, articial
intelligence)
Clarify rules to facilitate use
of cloud services
EU initiative to promote
blockchain, including in
nancial services
New ‘EU FinTech Lab’ to
increase knowledge of
technologies among EU and
national authorities
A MORE
COMPETITIVE AND
INNOVATIVE
FINANCIAL MARKET
ENCOURAGE INNOVATIVE BUSINESS MODELS
STRONGER CYBER RESILIENCE
SUPPORT UPTAKE OF NEW TECHNOLOGIES
New EU rules to enable
crowdfunding
COMMISSION INITIATIVE TODAY
GROUND-BREAKING INNOVATION
New convenient, cost-eective and
innovative payment services for
consumers.
INCREASED SAFETY
Blockchain can make transactions
faster, more traceable and secure
for banks.
MORE OPPORTUNITIES
Online crowdfunding platforms
match small businesses and
non-professional investors.
“To compete globally, Europe’s innovators need access to capital, space to
innovate and scale to grow. This is the premise for our Fintech Action Plan.
An EU crowdfunding label would help crowdfunding platforms scale up and
match investors and companies from all over the EU, giving more choice to
investors, and more opportunities for firms and entrepreneurs to pitch their
innovative business ideas to an EU-wide audience of potential investors.”
VALDIS DOMBROVSKIS
Vice-President in charge of Financial Stability,
Financial Services and Capital Markets Union
WHAT IS CROWDFUNDING?
WHO BENEFITS FROM CROWDFUNDING?
Crowdfunding is an innovative funding opportunity for small businesses and start-ups. It matches up business
projects in need of funding with investors through an online platform. Investors in exchange receive returns on
their investment.
CROWDFUNDING IN EUROPE IS STILL UNDERDEVELOPED
9 Get involved in a project they love
9 Receive a return on their investment
INVESTORS
9 Access to alternative, cheaper sources of nance
9 Investors validate business idea and advertise new
product or service
9 Helps start-ups grow and reach next stage of
funding (e.g. bank loans, venture capital)
START-UPS & SMALL BUSINESSES
Platform transfers funding
Proposes project in need of funding
Financial return
Funding via platform
SMALL BUSINESS /
START-UP
INVESTORS
ONLINE CROWDFUNDING
PLATFORM
Source: Reports by the Cambridge Centre for Alternative Finance, 2017/2018; data for 2016 calendar year
EUROPE
AMERICAS
ASIA-PACIFIC
REGION
€200.7 billion
€35.2 billion
€7.7 billion
0 50 100 150 200 250
WHAT’S THE PROBLEM TODAY?
HOW CROWDFUNDING CAN FILL THE FUNDING GAP
Crowdfunding platforms nd it dicult to expand EU-wide as they face conicting rules between Member States.
This means that start-ups and small companies are not able to benet from the greater pool of potential investors
EU-wide. It also limits investment opportunities for individuals.
It is oen dicult or expensive for start-ups and early scale-up companies to get funding from banks or other
forms of nance due to a limited track record. Crowdfunding helps ll this gap by enabling them to grow and
access more sophisticated funding sources.
EU-wide passport enables European crowdfunding
service providers to operate under same rules
Diverging national rules hinder cross-border
crowdfunding services
Developing a common investor protection regimeLack of information leads to low investor trust
Simple template for disclosure of key characteristics of
project and nancial product sold
Lack of transparency on project and nancial product
sold (e.g. loans, shares) leads to uninformed decisions
PROBLEM SOLUTION
STAGE 1:
INCEPTION
STAGE 2:
EARLY GROWTH
STAGE 3:
EXPANSION
STAGE 4:
GOING BIG
Funding: What’s available and what’s needed
Growth of company
Tapping public
markets
Crowdfunding
Bank (e.g. loans)
Retained prots
Own resources, family and friends
Private equity & private placement
Xavier SUTTY
CEO & Co-founder
PumpArt System
France
“Crowdfunding helped my start-up raise funds
quickly compared to more traditional funding
channels. This allowed the company to grow
rapidly. Another advantage were the exchanges
with my future investors as they asked very
relevant questions and gave good advice.”
Monika TOOMING
Head of Operations
Funderbeam
Estonia
“The regulations that Europe is working on now
will help crowdfunding platforms grow and do
more cross-border business.”
Je LYNN
Executive Chairman & Co-Founder
Seedrs
United Kingdom
“For now it has not been possible to market
services to investors on a cross-border basis,
and that’s going to be one of the things that is
most important to change.”
Matthias RAISCH
CEO & Founder
taxbutler
Germany
“I did not have access to business angels or
venture capital, so crowdfunding was nearly
my only option for raising capital for my start-
up. The biggest advantage was that I gained
clients and ambassadors for my product at the
same time.”
