Crowdfunding is an emerging source of financing involving open calls to the public, generally via the internet, to finance projects through monetary contributions in exchange for a reward, product preordering, lending, or investment. For small businesses, access to this form of finance represents an alternative (or a complement) to more traditional sources of finance like debt finance.
Crowdfunding platforms are websites where fundraisers such as SMEs can source financial pledges from a crowd. There are several crowdfunding types, the most common types used by profit-making SMEs and start-ups are peer-to-peer (or marketplace) lending and equity crowdfunding.
Related crowdfunding activities
We are exploring the potential and risks of this relatively new and growing form of finance, as well as the applicable national legal frameworks. The aim is to identify whether and what European-level policy in this field could help. Read more about crowdfunding
In 2018, we presented a proposal for a Regulation on crowdfunding service providers. Once adopted at EU level, the new regulation will allow platforms to apply for an EU passport based on a single set of rules. This will make it easier for them to offer their services across the EU. The new rules will improve access to this innovative form of finance for small investors and businesses in need of funding, particularly for start-ups.
Guide on crowdfunding for SME
The guide for small businesses explains what crowdfunding is and how to use it. It offers small businesses information about different types of crowdfunding and gives practical tips on how to access it.
- See the online version of the guide on crowdfunding
- See the document version of A practical guide for SMEs on how to access crowdfunding (2 MB)
- 'What is crowdfunding?' (infographic)