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Crowdfunding Risks - Coggle Diagram
Crowdfunding Risks
UK Crowdfunding
Crowdcube
Rebus
Claims management group
100 Investors
£5k - £135k each
Raised £800k
Administration/Liquidation
6% of 300 companies in liquidation
Seedrs
Hokkei
Liquidation
£320k losses
Upper Street
Liquidation
£243k losses
1 in 5 in liquidation
Protect investors
Publish failure rates
insurance levies
Innovative finance ISA
FCA regulates sector
Equity crowdfunding high-risk
Investors likely to lose all money
Alternatives
VCT (Venture capital Trust)
EIS (Enterprise investment Scheme)
Deep research before investment
Funding US
Raise upto $1m
Level Playing field
Slow uptake
lack of education
Disclosure
500+ investors
Legislation
500+ pages
Oversized
Clumbersome
McHenry Bill
Lift limits on cap to $5m
Limits the SEC
Regulation
Security and Exchange Commission (SEC)
Prevent Fraud
Prevent money laundering
New Business to file accounts
Vetted by accountant
Go Public once big enough
Finding balance
Unleash the promise
Close door
Drug trafficing
Boiler rooms
SEC Chair
Invited input
investors improvements
Company improvement
Credibility Crisis
New Rules
Uncertainty (Rules)
Complexity (Rules)
Adverse selection
Weaker companies using crowdfunding