In a recent survey conducted by the European Commission on financial and security markets, a majority of respondents felt that crowdfunding campaigns with social objectives merit special treatment from the regulators.
The consensus is that social ventures and those behind the ventures should not be limited to the donation or lending based funding opportunities. Equity crowdfunding should be a viable option. However, a need to define social enterprise and the kinds of social objectives are critical and respondents agree that transparency is a must if social ventures are to get special treatment. Most suggested ex post verifications (e.g., audits, social impact assessments, or periodic reporting). Some respondents call for a favorable tax treatment for these social ventures, some prefer lighter regulations, and few mentioned the need to harmonizes impact measures and warned against any sort of regulatory interventions in this sector. The commission stated that it will explore this in more detail in future efforts.
And so, as I ponder and explore the future of equity crowdfunding in this series of blog posts, we recognize the concept of “crowd” is a powerful one.
Crowdfunding and crowd-sourcing ingeneral are about a group of people getting together led by their convictions so strong that they are willing to invest time, money and effort to make it happen. It’s something not taught in school; not because the schools don’t try, but because finding such convictions is a private affair. The intrinsic interest is something, if taught extrinsically, would defeat its very purpose.
We leave the schools then. Outside in this open global community of ours, in finding this intrinsic motivation to do something, we discover the power of the crowd is beyond financial gains.
We realized the crowd is only inspired to act as if it makes a difference somehow. Well, it does. No one knows how we can shape tomorrow for the better, but everyone knows we must try. Technology is only a tool and equity only an extrinsic factor. Success of equity crowdfunding is not depended on these things or the laws that regulate them. The success of equity crowdfunding is in what we as a people can do with this very powerful idea.
But where do we begin?
The Internet has ended the Industrial era and ended mass marketing. It has revived a human desire to be connected and we are now in a struggle to find our shared ideas and values to allow ordinary people the power to lead and make big changes. A struggle means opportunity and is beyond the spirit of the law. New laws will have to conform to our hopes, not the other way around.
After all, the “unselfish and noble acts are the most radiant epochs in the biography of souls.”