What are Indian Crowdfunding Sites

Crowdfunding in Germany


In the recent past the topic of crowdfunding and swarm financing has been the subject of several informative publications. The following are to be mentioned in particular:

The topic of crowdfunding or crowd financing was thus for the first time comprehensively dealt with politically and scientifically. The key findings (especially from the Federal Government's evaluation report) and initial outlooks for the future are summarized in the following.

Strong growth in the German crowdfunding market

The total volume of the German crowdfunding market in 2015 was around EUR 272 million, of which EUR 189 million was in the largest sub-segment Crowdlending. EUR 47 million on the second largest sub-segment Equity crowdfundingand EUR 36 million was accounted for by donation-based and reward-based crowdfunding in the narrower sense.

Exact empirically collected data exist especially for the subsegment crowd investing. According to this, the German crowd investing market grew by an average of 220% per year between 2011 and 2015. During this period, the corresponding internet service platforms were able to broker a financing volume totaling EUR 110 million, of which two thirds (EUR 66 million) were used to finance young start-ups and the other third (EUR 36 million) to finance real estate projects . 86% of the investors invested less than EUR 1,000 in a project, 13.9% of the investors, on the other hand, between EUR 1,000 and 10,000, while 0.1% of the investors invested more than EUR 10,000. Almost 80% of all issuers were able to collect less than EUR 500,000 through crowd investing, almost 2% raised more than EUR 2.5 million.

In relative terms, the German crowdfunding market has developed considerably in recent years, which can also be seen in the European comparison: In 2015, Germany was in third place behind France (second place) and Great Britain (first place). The difference to the total issue volume on the UK market, on the other hand, is immense, as it has a European market share of 81% and a total issue volume of EUR 4,412 million.

No change to the prospectus exemption threshold

Although this is requested by the crowdinvesting industry associations, the federal government is not currently planning to raise the threshold from EUR 2.5 million to EUR 5 million. Not least because the majority of the projects have collected less than EUR 500,000 anyway.

Validity of the threshold for all investments

At least for the time being, the Federal Government has also rejected efforts to offer forms of investments that have not yet come under the regulation of Section 2a VermAnlG (company investments, fiduciary investments, profit participation rights, registered bonds) within the threshold of EUR 2.5 million via internet service platforms without a prospectus. However, it has signaled that shares and bonds may soon also be offered publicly via such platforms within a period of twelve months up to an upper limit of EUR 1.0 million without a prospectus. The background to this project is the planned EU prospectus regulation, which provides for a corresponding exemption.

No more privileged property financing?

Real estate financing will continue to benefit from the exemption provision in Section 2b VermAnlG. The federal government had considered abolishing this privilege in its evaluation report, but temporarily discarded it under pressure from the industry.

No cross-border sales of investments via an EU passport

The federal government will not comply with requests to set up a so-called EU passport for the sale of investments in other EU countries, since this goal cannot be achieved by national law. The possibility of an EU passport only exists for areas that have been harmonized by European law, which is not the case for investments. The approval of a brokerage platform as an investment services company instead of the registration as a financial investment broker according to ยง 34f GewO is also not a suitable way, since investments according to the VermAnlG are not among the financial instruments that are allowed to be brokered across borders. However, providers of investments are free to offer their investments in another member state in accordance with the provisions there for the public offer of such investments.

New requirements for the content of asset information sheets (VIB)

In the interests of investors, the federal government wants to create more transparency for investments by making the VIBs mandatory in future to contain additional points. These relate to information about the investment itself, but also about the companies involved in the issue. In particular, the identity of the provider, the issuer and the platform should be emphasized. For the purpose of increased cost transparency, all costs, commissions, fees and other services incurred by the issuer for the brokerage of the investment must be highlighted in the VIB in the future. In order to improve the comparability of the VIBs, the minimum information must also be presented in the VIBs in a fixed order. The overriding aim of these changes is to standardize VIBs more strongly in order to make the investments offered more transparent for potential investors.

BaFin's competencies to review the VIBs

For the purpose of improving the quality of the VIBs with regard to compliance with the minimum information and thus transparency for investors, the Federal Government wants to grant BaFin the authority to formalize the VIBs. In future, investment issuers will therefore only be allowed to publish VIBs after they have received approval from BaFin and will not be allowed to submit the corresponding public offer to acquire the investment until one day after the VIB has been published. If an exception provision is used for crowd financing or social projects, BaFin must notify its decision on the permit within ten working days. Similar to permits under the KWG, the period does not begin to run until BaFin has received all of the documents.

Avoidance of Conflicts of Interest

In the future, the federal government wants to prevent market participants from circumventing the prohibition on exceeding the total issue volume of EUR 2.5 million by engaging several providers to sell the investments. For this reason, a change will be made in Section 2a (1) VermAnlG, according to which the calculation of the threshold value of EUR 2.5 million depends solely on the sales price of all investments offered by the issuer.

In order to prevent conflicts of interest, issuers will no longer be allowed to offer their investments to the public if their managers are at the same time a member of the management of the internet platform that mediates the investments or if there is a group law relationship between the issuer and the internet platform within the meaning of Section 15 of the German Stock Corporation Act.


The strong and continuous growth of the crowdfunding market in Germany shows that this alternative form of financing has meanwhile become firmly established. This still applies in particular to start-ups that may not receive start-up funding in any other way. However, established companies and foreign market participants are also increasingly showing interest in the possibilities of crowd financing. Whether crowdfunding, especially in its manifestations as crowdlending and crowd investing, turns out to be a real Implement an alternative in SME financing and thus become a significant threat to banks, is currently not foreseeable. Such a development would, however, meet the declared aim of the EU Commission Capital Markets Union correspond.

The planned exemption from prospectuses for shares and bonds through the prospectus ordinance with an issue volume of less than EUR 1 million will accelerate further growth or at least help stabilize the market. Here too, issuers will have to ensure that they do not qualify as deposit business within the meaning of the KWG. Corresponding brokerage platforms, on the other hand, would operate investment brokering within the meaning of the KWG that required a license.

Overall, the legislature is satisfied with the rules on crowd financing insofar as it has succeeded in creating an appropriate balance between the interests of companies seeking capital and investors. The planned changes in the VermAnlG to increase the transparency of the investments offered will mean a certain amount of additional work for the issuers, providers and brokerage platforms, which, however, appears to be justifiable from the current point of view.