|Alternative Funding Network|
Will Regulation Keep Up With The Equity Crowd?
As equity crowdfunding continues to grow in the UK, fears of lack of regulation plague this nascent alternative financial industry. In one recent article, experts warn that equity-based crowdfunding can be needlessly risky for investors and creates unforeseen difficulties to young SMEs. While this is correct, the majority of crowdfunding platforms in the UK strive to attract savvy investors whom understand the inherent risk of equity investments. As such, several platforms (CrowdBnk, Seedrs, Crowdcube, etc) are authorised and regulated by the FCA. This move towards self-regulation, where industry regulation has yet to exist, proves that equity crowdfunders seek to play within the bounds of responsible financial actions and are not seeking to pull the wool over unsophisticated investors.