Apply or Die: What We’ve Learned at the 11th CrowdCon in Brussels
“Apply or Die” is the email our team received after Konstantin Boyko, the CEO at LenderKit, visited the 11th CrowdCon in Brussels, Belgium. What happened and what does it really mean, though?
As you know, EUROCROWD regularly conducts crowdfunding conferences either online or offline to shed some light on how the crowdfunding industry in Europe is developing, the major problems, challenges and innovations. And as a member of EUROCROWD, we, at LenderKit, love to visit them.
The 11th CrowdCon gathered the best crowdfunding platforms and industry representatives including Crowdcube, Oneplanetcrowd, Lendahand, CONDA, WeAreStarting and Tokeportal.
One of the major topics for discussions was the ECSP regulation, and that crowdfunding platforms have as little as 1 year to get the license from the local competent authority to stay afloat and run their business compliantly and successfully.
The only problem is that the process of getting an ECSPR license takes around 6-9 months, so platforms virtually have no time to wait, think or hesitate.
The fact that some local regulators were not ready for the ECSPR forced the European Commission to postpone the process to the November 10th of 2023 instead, however, it almost feels like an ultimatum, at least by the title of this article. Whether there will be another postponement, we don’t know.
At the moment of writing the article, only 6 platforms received the ECSPR license, and some other platforms might get it in the near future.
Anyways, here are some key takeaways from the conference that may help you stay tuned with the crowdfunding industry in Europe.
What you will learn in this post:
Having a MiFID II license helps
Investment platforms that have an existing MiFID II license will have an easier time getting an approval under the ECSPR. The reason being is that MiFID has stricter requirements to comply with, so if you’ve already passed it, there should be no problem obtaining the ECSPR license.
ECSP as a quality stamp
Crowdfunding platforms that received an ECSPR approval can actually stand out from the competition and get more respect and trust in the eyes of investors and fundraisers. ECSP is a certain quality stamp which helps to build trustworthy relationships with clients.
The industry needs KPIs
Oliver Gajda, an executive director at EUROCROWD, has shared an opinion that the industry is going to need KPIs. At some point, the European Commission will start assessing the performance of ECSP implementation. This may include financials and taxes, but we don’t know exactly.
For crowdfunding platforms, it is better to keep the analytics readily available, if the need comes, and present it for assessment. The examination of the industry performance will help to decide whether it’s going to be supported and developed further.
Crypto-assets and EU regulations
The Council presidency and the European Parliament have reached consensus regarding the MiCA regulation, so the market of crypto-assets is going to be regulated for the first time in Europe.
A member of the EU Commission said that “MiCA is the true regulation for crowdfunding” which means that if platforms haven’t yet thought about it, this might be just the right time to implement crypto and blockchain.
Crowdfunding platforms work with high-net-worth investors and banks
There’s a growing trend that crowdfunding platforms are working with high-net-worth investors. As we all know, the industry was leaning towards more retail investors in the past because of the “untapped capital”, “high demand”, etc.
However, crowdfunding platforms are collaborating with institutional investors and people with money.
Apart from high-net-worth investors, crowdfunding platforms are increasingly partnering with banks. For example, Walliance partners with Banca Cella or Societe Generale acquired a crowdfunding platform Lumo.
Crowdfunding platforms are able to provide an audience, niche and interesting market opportunities, so they are seen as attractive collective investment instruments.
The EU Crowdfunding industry keeps growing and presents new challenges for crowdfunding platforms. But it also offers new opportunities. Crowdfunding platforms may focus on the ECSPR and working with rich investors, consider introducing blockchain and crypto or even both.
Whatever your take is on this, at LenderKit, we offer white-label crowdfunding software to help new platforms launch quickly and reliably. Our crowdfunding software is ECSPR-friendly and for the blockchain and crypto, we work with partners such as Polymath.
If you’d like to learn more about the software and talk about your project, reach out to our fintech strategist for an online demo.