Euro 5-min

Equity crowdfunding: an opportunity for company development

Crowdfunding is the process by which a number of people contribute money, even small sums, to finance a business project or initiatives of various kinds using websites (“platforms” or “portals”) and sometimes receiving a reward in return. There are different types of crowdfunding. Among the most common are Reward Crowdfunding (which provides the investor with a reward commensurate with the contribution made) and Equity Crowdfunding.

Crowdfunding is defined as “equity-based” when, through the on-line investment, a real shareholding in a company is acquired: in this case, in exchange for the financing, a set of financial and administrative rights deriving from the shareholding in the company is received. Equity crowdfunding is therefore an important financing tool for small and medium-sized enterprises, generally used to support the launch of new business initiatives.

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