A report in The Sunday Business Post, dated 28 August 2016, suggests that the Department of Finance is considering a public consultation on the area of crowdfunding. At present, there is no regulatory framework for crowdfunding in Ireland.
While it’s great to read of positive developments in relation to this topic, I’m not sure what is the purpose of a public consultation. Surely, it makes more sense to just follow the lead set by the US and UK regulatory authorities and simply regulate the industry.
The article doesn’t mention whether the consultation will cover all three areas of crowdfunding – Donation, Rewards, Equity – or whether it will also include peer-to-peer lending, but it would be a surprise if all areas were not covered.
The article quotes an official from the Department of Finance who states they have met the Irish Central Bank “on a number of occasions to discuss crowdfunding and further meetings are expected.”
In response to a parliamentary question earlier this year, Michael Noonan, Minister for Finance said crowdfunding “can be a valuable source of funding for SME’s as a complement to, or as an alternative to traditional bank finance.” Our understanding is that Enterprise Ireland only funds around 5% of companies who apply for its Competitive Startup Fund and who then go on to be High Potential Startup Companies. With those sort of figures, it’s not hard to see there is a demand for alternative sorts of funding for startup enterprises in Ireland.
We have compiled a list of the most recent press articles in relation to crowdfunding in Ireland. Click here to view these. Notably, Crowdcube, the UK’s largest equity crowdfunding company has just raised £8m to grow their own business. Any suggestions as to how they raised the money?! They set a target of £6m on their own platform and comfortably exceeded this within 30 days from members of their own website.