Further proof that the UK is the most exciting and dynamic crowdfunding market comes with the recently announced deal between seedrs.com and Junction Investments.
“We plan to use this acquisition to expand to the United States in early 2015,” blogs Lynn. “Junction’s co-founders, Adam Kaufman and Brian Goldsmith, are now Co-Heads of Seedrs America, and they will be leading this expansion.”
The FCA is perceived by many as doing a difficult job well - Money&Co.
The seedrs.com expansion strategy is based on the “founding principle… that investment in startups and growth businesses should be global,” says Lynn. “We believe in a future where entrepreneurs and investors from all over the world can connect online. Investors should be able to discover and invest in opportunities anywhere, and entrepreneurs should be able to access capital worldwide.”
But that global vision is something of a pipe dream. Financial regulation remains largely national or regional. That’s the prime reason for the likes of Lynn coming to the UK – he can operate in a regulatory environment that favours entrepreuneurship and good business practice.
We’ve seen the law of unintended regulatory consequences in the operate many times in many different spheres. What’s going on in crowdfunding is reminiscent of the way the US authorities effectively created the Eurobond market by imposing withholding tax on US-issued debt. So the dollar debt migrated to Europe, and a multi-billion dollar business grew.
Commentators such as crowdfundinsider.com have consistently complained that “the redcoats are winning” the regulatory war. The Securities and Exchange Commission in the US is conservative, and the Financial Conduct Authority in the UK has a lighter touch.
Here’s how leading P2P loan crowdfunder. Money&Co., sees the FCA’s role: “The FCA is perceived by many as doing a difficult job well. The FCA has to find a balance. On the one hand, it seeks to have a touch light enough not to crush the flexibility, the innovation and the fluidity of this young industry. On the other had, its number one priority must be to protect the people (and increasingly, the institutions) pooling money. This means, in Money&Co.'s case, the FCA must look after the lenders.
So congratulations to Seedrs and to Junction – but the fact is the deal would never have happened without the UK’s business-friendly regulatory approach.
American site users, for example, “are welcome to sign up to Seedrs and have a look around, although they will not yet be able to invest or raise capital.”
Three cheers for the redcoats of crowdfunding.