Anaxago is an equity crowdfunding platform headquartered in Paris, France. Launched in January 2012, the platform supports innovating companies raising between $350,000 and 2 Million Euros.
On February 14th, French policymakers proposed new regulations for the equity and debt-based crowdfunding industry in France. The regulations are highly supportive and have been enthusiastically received by the industry. (Policymakers wisely differentiated between equity and debt-crowdfunding.) The regulations, upon commenting, will go into effect July 1st, 2014.
The Anaxago team—who just celebrated their 2-year anniversary yesterday (congrats!)—reflected on what this landmark regulatory change means for the industry.
Thoughts from Anaxago
This Friday, February 14th, the French government (again) declared its love towards its startups and the growth of SMEs by enabling the latter to raise up to € 1 million without (too many) constraints.
I don’t know if you have seen any pictures of our French president in the US. Hugging and “giving love” to French entrepreneurs. But the new line of communication of our government seem to be : « France is an entrepreneurial territory ».
Which was not true until then. I even heard Alice Zagury, from the new French accelerator « The Family », saying, « if you can make it in France you can make it everywhere ». But things seem to be moving towards our greater good.
After months of discussion with its friends, regulators, consumer associations, professional associations and other financial lobbies, the government has issued a bill promising easy access to capital for small and micro businesses.
Yesterday everyone came together to celebrate a small revolution in the young industry of Crowdfunding: crowdfunding platforms, entrepreneurs, investors, risk capital and ministers were present.
What the law will actually change for businesses.
Previously, companies had to undertake the writing and financing of a « prospectus » approved by the AMF (our very own SEC) of more than 200 pages in order to make a public appeal for any fund raising in excess of € 100,000.
Now companies (including closed corporations previously excluded from the public offering) will be able to raise up to a million euros from private investors through a simplified document a few pages.
Besides equity research, companies and individuals can now borrow directly on lending platforms up to one million euros. However, lenders will not be able to lend more than 1000 euros per project (limit that applies only to loans).
What the law will change for the crowdfunding platforms.
Two new official status are created:
Platforms can now exercise without a minimum fixed capital, removing all barriers to entry in the sector (against a requirement of more than one million Euros of immobilized funds before the reform).
Developments for crowdfunding backers (investors/lenders).
Contributors on crowdfunding platforms will have a wealth of information and transparency to fully appreciate the risks involved. Among the communication requirements, we find information on the costs, default rates and the risks involved. Platforms respecting transparency obligations will benefit from a “controlled by the French authorities” label.
The law will be part of the new law on consumption, that will be voted in April for a direct application from the 1st of July, 2014.
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