The Current State of Crowdfunding in Spain
With the aim of re-identifying the current situation in Europe, we reached out to our international partners in the Altfinator Policy Network to provide in-depth insights on the Current State of Crowdfunding in Europe in 2020.
We have reached out to Mr. Oriol Sans, a crowdfunding thought leader in Spain. Mr. Sans is sharing with us insightful information about the current crowdfunding trends in Spain and about the expectation regarding the impacts of the new European (ECSP) crowdfunding regulation.
Mr. Sans: The Crowdfunding Sector in Spain Will Become Larger, Stronger and More Professional
“Regulation, and more specifically good regulation, is good news for the crowdfunding industry in Spain. In the coming years we will see how the law will be applied and interpreted but the sector is already bullish on that new scenario.
In the nearer future, and partially thanks to this new regulation, the crowdfunding sector in Spain and as an asset class will become larger, stronger, more professional and more flexible due to some of the new measures regarding the access to information, the protection of investors rights and the regulation of conflict of interest, among others.
As an example, the new European crowdfunding service providers regulation would have a positive impact on the following matters in the Spanish crowdfunding market:
- Current over-funding limitation per crowdfunding offer in Spain would disappear, meaning that companies will have more flexibility when designing the funding round and more money will be raised so companies will be better capitalized.
- Increased attractiveness of crowdfunding as an asset class thanks to the implementation of the key investment information sheet. This standardization of information would make crowdfunding closer to other assets classes regarding quantity, quality and depth of information. On the other hand, however, it would increase the crowdfunding offer costs due to the fact of having to hire qualified professionals to write the “kiis”.
- Positive impact on the capitalization tables and later funding rounds since special purpose vehicles are allowed. Nowadays in Spain, all crowdfunding investors must be shareholders of the company that has gone through a crowdfunding campaign, making cap tables complex and the governance of those companies slow.
- Transferable securities would become a fact and secondary markets could be implemented allowing the investors to obtain liquidity when needed and possible.
- Cross-border provision of crowdfunding services is also now a positive fact bearing in mind the growth and consolidation that the sector has experienced. Therefore, SMEs and startups could benefit from an increase of competition and larger pools of investors as well as EU-wide sector specialized crowdfunding platforms.
To sum up, the future of the crowdfunding sector in Spain looks brighter thanks to the new European crowdfunding service providers regulation. Unfortunately, some things will not change and it seems that non-Spaniard investors will still have to appear in person at a Spanish embassy or consulate to obtain an identity document called NIE, no matter the amount invested in the crowdfunding offer.
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