The Irish law firm, Mason, Hayes & Curran, have written a nice piece summarising the landscape in Ireland for equity crowdfunding. A link to the full article is provided below, but we highlight the key points first.
Equity Crowdfunding is not a regulated activity in Ireland and there appears to be no immediate plans for this to change. This contrasts with countries like the US and the UK, where the industry is regulated in order to protect investors.
Lack of specific regulation is not of itself a bad thing, provided those involved understand the risks and the opportunities.
Because there is are no restrictions on who may invest through equity crowdfunding in Ireland, this provides entrepreneurs with a much wider pool of potential investors.
Freedom of communication is another key benefit, as founders are not required to produce a prospectus and they may use social media to promote their campaigns without worrying about including legal disclaimers.
However, for investors, the lack of regulation means that many investor-protection mechanisms are not available in the event of investor losses. The Irish Central Bank’s Code of Conduct or Client Asset rules do not apply.
Therefore, while the current environment provides start-ups with a great opportunity to raise much needed funding, investors contemplating making an investment in an equity crowdfunding campaign should take advice and understand the risks involved.
Click here for a link to the full article referred to above.