April 24th, 2015 by: Grow VC Group
The world of digital finance has been evolving quickly and has found a number of different applications worldwide. Highlighted by the report from Nesta and Cambridge University “Understanding Alternative Finance”, the sector includes different types of online investing: not only consumer loans and equity capital but also working capital.
In fact, a promising application of digital investing is invoice finance, that is companies raise working capital by lending against unpaid invoices. Investing in invoice finance is something that has been around for long time, mainly offered to small businesses in need of working capital from banks. Moving this process online can make it far more efficient and transparent: it has been estimated that the cost of invoice financing has been cut by half in some cases. In 2014, in the UK, this sector’s size was of about £270 million and its average growth rate estimated at 147%.
As it has been observed in many other sectors, moving investment operations online has resulted in greater efficiency and increased transparency. Since 2009, Crowd Valley believes that we are witnessing and actively contributing to a paradigm shift in the financial world, which will become more transparent and inclusive.
Read the whole article on Crowd Valley Blog.
April 22nd, 2015 by: Grow VC Group
On March 18th 2014 the “Invest Indiana Crowdfunding Exemption” entered into effect. The bill, which was approved by the State in July 2014 as an emergency rule, aims at facilitating online investing in Indiana, at the same time providing an additional source of finance for local SMEs.
The regulation sets out the following:
- Investors: any adult resident can invest up to $5,000 per offering and they have the right to cancel their investment until 48 hours prior to the deadline.
- Issuers: the companies selling securities to Indiana residents through online portals can raise up to $2 million.
- Platforms: online investment portals shall register with Indiana Securities Division paying a registration fee of $100. The regulation also requires that the platforms keep a surety bond of minimum $50,000.
If you are looking to start you own digital investing portal in Indiana or any other US state, get in touch with our team to discover how Crowd Valley can help you.
You can read more details on Indiana regulation on Crowd Valley Blog.
April 20th, 2015 by: Grow VC Group
Following the success of the Report on UK’s Alternative Finance, which last November revealed the incredible growth in the UK, University of Cambridge in collaboration with EY conducted a research on Alternative Finance in Europe. The study, called “Moving Mainstream – The European Alternative Finance Benchmarking Report” published in late February, discloses statistics on the market’s dimension, which probably are the most accurate estimates we can get at this early stage.
The following are some of the key estimates:
- Total value of the European Alternative Finance Market in 2014: €2957 million.
- The UK €2337 million.
- The rest of Europe (i.e. no UK) €620 million.
- The rest of Europe, an estimated growth rate of approximately 115% in 2014.
- France €154 million.
- Germany €140 million.
- Sweden €107 million.
From the Cambridge University and EY Report, it emerges that Alternative Finance follows a growing trend all over Europe, led by the UK. The results are in line with what Crowd Valley last reported, that is UK is by large the biggest market in the EU and will probably remain for years to come.
Read more about the study on Crowd Valley Blog.
April 18th, 2015 by: Grow VC Group
It is sometimes said crowdfunding risks consist of three F’s: 1) Failure, 2) Fraud, and 3) Fulfillment. They are very different and also investor’s, platform’s, company’s and regulator’s responsibilities and roles should be different in each of them. Laws and regulations should protect investors especially against illegal activities, but investors always carry some risks in investments.
The regulation should focus especially to prevent fraud. For failure and fulfillment issues it is important that companies (or projects or individuals who raise money) must give enough information that investors can understand and evaluate risks, and the regulation can define minimum level for the information.
Investors carry always risks, when they make an investments. And often higher risk is linked to higher expected return, if the company or project is successful. The regulators have a role to manage risk and help investors, but if they are too active, it is harmful for the market. P2P Safety focuses especially to develop products that investors and platforms could better protect themselves against risks.
Read more about 3 F’s and the whole article on P2P Safety Blog.
April 16th, 2015 by: Grow VC Group
Colorado’s Senate has approved the bill for intrastate crowdfunding that was proposed last February. The rules are now waiting for the signature of the State’s Governor to be then officially enacted. The proposed legislation would allow local companies to raise up to $1 millions unless they submit audited financial statements to the securities commissioner, in which case the cap is $2 million.
Investors will be allowed to invest $5,000 per project, unless they are accredited investors in which case the aforementioned cap is not valid. With regards to intermediary platforms, the legislation forbids them to offer investment advice or handle investor funds or securities.
Once the Governor signs off the rules, Colorado will join about 15 other States which in the last two years allowed intrastate crowd investing. Despite Regulation A+ being recently approved, the State’s governing bodies will continue putting effort and dedicating attention to intrastate crowdfunding which means they are still uncertain of the effects Regulation A+ will have on this new market.
Read the whole article and more details on Crowd Valley Blog.