There is no more divisive subject in the crowdfunding sector at the moment than regulation. On 26 February, rebuildingsociety.com talked and exhibited at the UK’s first crowdfunding conference, “Crowdfunding Deep Impact”, held at Hertfordshire University. Nick Moules outlines the basics of the argument for and against.
While everyone in attendance (including Vince Cable through a pre-recorded video) agreed that crowdfunding in its many guises is undoubtedly a positive movement for everyone – there were huge divides over whether regulation applied by the FCA would be appropriate for the market.
Part of the complication is down to the different types of crowdfunding available:
- Reward. Piloted by the likes of Kickstarter – start-ups offer the finished product to people who donate the cash to back a project
- Equity. Funds raised go towards an equity stake in early stage businesses
- Peer-to-peer. Individuals lend money to other individuals and receive monthly repayments
- Peer-to-business. Individuals lend money to established businesses and receive monthly repayments