The main conclusions of the Current State of Crowdfunding in Europe

• A positive stance from the government, enabling progressive regulation and tax reliefs, correlates with high volumes in the industry. UK is the best example of this. Only in a few cases low volumes in countries are not related to regulatory issues and are low due to other reasons, e.g. the readiness for crowdfunding is low because the public is not accustomed to online payments.

There is an urgent call for more transparency and independency for aggregated data and a clear European taxonomy. In the majority of countries there is no data available about total volumes of the industry. If data on an aggregative level is provided, there is increasing disagreement about precise volumes and about the definitions to be used. Independent organizations, like regulatory institutions, can significantly contribute in answering this problem. Especially when it comes to disclosures about defaults.

Too much focus on volumes can conceal what is really happening in a country. Sometimes a country has high volumes in a certain type of crowdfunding (e.g. P2P consumer lending) because it is unregulated and the country is preparing legislation to protect consumer interests and to prevent irresponsible borrowing. In some countries existing law prohibits a certain type of crowdfunding, but in countries where new legislation is being prepared we see already many platforms getting started anticipating the new legislation.

Volumes will continue to grow with high rates and differences between countries will decrease because of new crowdfunding legislation. In many countries new crowdfunding legislation has come into effect recently (or will come into effect this year). The focus is on removing barriers that result from existing regulations and on fostering access to finance for SME’s and startups.

There is a high level of cross border activity from successful platforms. Many platforms that are successful have presence in neighbouring countries as well. If there are no language barriers, the level of cross border activities increases, proving the fact that by nature crowdfunding isn’t bound to geographical borders.

Optimism about the potential of alternative finance prevails. Although once put away as just a marginal trend being embraced only by early adaptors, we see more and more serious interest in all levels of society. In the UK the alternative finance industry provides already a true alternative for traditional finance with over 10% of SME funding provided by alternative finance. Financial institutions play an increasing role in providing capital to be distributed

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