The equity crowdfunding industry is constantly evolving and appears to be at a turning point where we would expect to be seeing returns and exits to the crowd. Up until now we were operating in unknown territory and a lot of what we forecast was based on similar markets. However, now we can anticipate the emergence of transparent and quantifiable statistics about the industry.The availability of substantiated insights, statistics and trends will mean that it is highly probable that current consumer/investor behaviour will adapt and change and this will cement the pillars of equity crowdfunding as an asset class in its own right. Consumers will be more sophisticated and as the industry matures and adapts to the macro environment in the next decade, we forecast that the industry will look entirely different with regulators having to evolve to keep apace with these changes.
Investing in private businesses, especially early-stage companies can be a long wait sometimes before seeing returns on investments. But then again, although they are risky assets, the returns on investments with some early-stage companies can vary between twenty and fifty times an investor’s initial investment. So the right strategy for any investor, and what Eureeca encourages, is to invest in a diversified portfolio of companies across various sectors and geographies to spread and minimise the risks.
Since the FCA launched it’s first set of regulations in 2014, the industry has witnessed explosive growth with £222 million raised in the last 12 months, dwarfing the £99 million raised between July 2014 and June 2015 in the UK alone. With the recent announcement by the UK Financial Conduct Authority (FCA) that they intend to consult crowdfunding platforms in their plans to implement a new, more stringent set of rules for crowdfunding platforms in 2017, there appears to be a consensus that this is indeed good news for the industry. Any protection mechanisms that help people assess the risks and returns on their investment will be beneficial for both investors and borrowers and we at Eureeca must be ready to adapt and develop our offering in line with these changes.
As a multi-regulated equity crowdfunding platform, having received licensing from the UK Financial Conduct Authority and the Securities Commission Malaysia in 2015, and recently the Netherlands Authority for the Financial Markets and Dubai Financial Services Authority, our priority is to offer entrepreneurs and investors a stable and secure online marketplace for investment with even higher investor protection mechanisms. Our exclusive agreement with American International Group (AIG) to offer crowdfunding insurance was developed specifically to protect investors on equity crowdfunding platforms against issuer fraud.
Eureeca has always been, and continues to be clear, fair and not misleading by providing the correct and transparent information to our investors. We welcome the FCA’s initiatives and efforts in fine-tuning the industry’s products and services, and proactively participating in the evolution of the industry.