Equity Crowdfunded Companies in the United Kingdom: What Factors Determine Post-campaign Success?
Company and Securities Law Journal, Vol. 37, No. 6, 2020, pp. 426-434
9 Pages Posted: 27 Aug 2020
Date Written: March 11, 2020
Equity crowdfunding (ECF) is a relatively new phenomenon in the market for equity finance: Australia only introduced a dedicated ECF regulatory framework in 2017. While it is too soon to confidently evaluate the post-fundraising campaign success of companies in Australia that have raised funds through the ECF process, research on the United Kingdom’s (UK) ECF market, the largest in the world, may offer some useful insights into the successes and failures of ECF. The purpose of this research note, therefore, is to consider the research on the post-campaign performance of companies in the UK that have raised funds through ECF to see if this offers any early guidance for the Australian ECF market and regulation. The research note:
(a) reviews and contrasts key aspects of the current UK and Australian ECF regulatory frameworks;
(b) surveys the literature on the post campaign performance of UK ECF companies and analyses what factors may contribute to the success or failure of ECF companies post-campaign; and
(c) concludes with a discussion of whether the UK’s experience offers any lessons for Australia.
Keywords: equity crowdfunding; regulation of equity crowdfunding; success of equity crowdfunding
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