Fast growth companies often look for funding outside traditional debt and equity, and for some, crowdfunding platforms have become one route to the cash they need.
Crowdfunding can also be attractive to investors offering opportunities that may not otherwise be available, while investors may also be eligible to take advantage of tax incentives under the Enterprise Investment Scheme and the Seed Enterprise Investment Scheme.
But investment schemes need to be regulated, and it is right that regulatory provisions should be reviewed to keep pace with the speed at which the crowdfunding facilities move. The FCA now plans consultation to ensure that investor protections are appropriate for the risks in the crowdfunding sector while continuing to promote effective competition in the interests of consumers.
The Financial Conduct Authority (FCA) plans to crackdown on crowdfunding platforms and introduce new rules