Estonian Equity Crowdfunding

Crowdfunding (as in Kickstarter, Indiegogo etc) has become mainstream. But this sort of crowdfunding only allows a debt based investment. In other words, when you support a project, you are buying something they offer. You are not buying any shares in the venture.

Is this a problem? Not in itself. But there may be reasons to set up a parallel equity crowdfunding system. First, it may provide a better way for some projects to get started, for example, when they don’t have anything yet to offer. Second, ti might also provide for more efficient exits for early stage investors — if the equity can be traded.

But there are legal hurdles to overcome. After the great depression, it was thought that small investors who don’t have sufficient knowledge needed more protection. So there are lots of limits on how such a market might work.

These hurdles are man made and therefore man can undo them or modify them. And it may happen. Estonia’s e residency cards may be a tool that allows us to take one step in that direction.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s