Reality is a bit more complex…

To prove that the sharing movement is alive and thriving, our dear friends from Shareable have been working on a very ambitious project: a collection of the most exciting and innovative cases of sharing and urban commons now underway around the world. With 137 case studies drawn from 80 cities in 35 countries focusing on housing, mobility, food, work, energy, land, waste, water, technology, finance and governance, the Sharing Cities movement is showing that local solutions can really tackle global problems.

Tom Llewellyn, Coordinator of the Sharing Cities Network, spoke to us about how these initiatives are paving the way to a better future.

Let’s start with the basics: how do you define a sharing city?  Is there a framework or methodology?

We set forth a series of 10 principles, rather than a specific framework or definition of what makes a sharing city. We feel that the idea of the sharing city is aspirational, meaning it is a process more than a finish line. In that sense, while there are a number of cities that have declared themselves to be sharing cities, there isn’t a single one that is all the way there yet.

Solidarity would be the first principle we feel a sharing city should work to meet. The idea is for people within the city to work together for the common good rather than competing for scarce resources. The sharing city is of, by and for all people, no matter their race, class, gender, sexual orientation or ability. At a core, these cities are primarily civic, meaning residents would be focused on taking care of each other as well as partner cities, creating a cross-city solidarity.

In your experience, is activating the urban commons more successful when done by grassroots organizations or by local governments?

This intersection was painted in honour of a grandmother who had planted a chestnut tree that died soon after she passed away. The neighbourhood gathers every year to commemorate the tree and reinvigorate the painting.

It takes both. The main idea of the commons, in general, is that for them to be successful it takes a community behind it – to manage that resource – and a certain amount of support from the government to make sure that resources can be managed in a sustainable fashion.

There is also a need to partner with the market forces. There are some great examples of that cooperation, one coming from Portland, Oregon called The City Repair Project. The community there wanted to rethink how to use the commonly held properties. They started by painting murals in the middle of intersections. It was done initially after a couple of children were run over in a neighbourhood, so residents came together to make sure it never happened again. They had a block party and painted the intersection with a mural as a memorial.

Initially, the city pushed back and they destroyed it. This caused a huge outrage in the city by the residents, not only those involved in the project. The government ended up legitimising the policy and allowing residents to paint their streets. Over time, some of the people involved in this project moved into the government, and are now able to help maintain the practice.

There are now more than 70 intersections painted with murals, many with benches on the corners, open libraries, etc. What is incredible is having the community driving it, the city supporting it by giving the permits for no cost at all as well as businesses involved. A number of local hardware stores have sponsored the projects, providing the paint and other resources. This is a great example of the relationships that can form around the commons and the balance between the community, the government and the market.

Have you noticed any interesting trends in the movement? Are some themes more popular, more successful, harder to implement, etc?

Yes! Food is the easiest place to start. Food is historically something that brings people together, be it community gardens or networks of food distribution, these policies are definitely amongst the most popularly adopted.

GrowNYC’s garden program builds and sustains community gardens, urban farms, school gardens, and rainwater harvesting systems across New York City.

A great example is the Grow NYC project. It started as a community that had an empty lot in their neighbourhood. They found out that it was owned by the city, so they worked with the local government and were able to turn it into a community garden. Through their research, they discovered there are 596 acres owned by the city. Some were held back for real estate development but a lot of them didn’t have plans in the near future. Now around 200 of those acres have been transformed into community spaces in less than 10 years. So it was the desire to come together around food that enabled the transformation of all those properties.

On the other hand, the hardest policies to implement are in areas where there is a history of ingrained institutions with a lot of power. The technology sphere is the best example, most notably internet service providers. In the US the market is dominated by three companies, so the entry barriers are immensely high. Yet there are also a number of projects trying to work their way, like FreiFunk in Germany where people have been able to set-up local community-driven internet networks. So even when businesses have a lot of control, there are ways to take a little bit of that back.

Many initiatives that work well in a city, sometimes cannot be scaled and should not be reproduced elsewhere, as the conditions that made it succeed cannot be easily replicated.  How can policy-makers and entrepreneurs better adopt the core learnings of the case studies presented?

This question is one that we reflected a lot when we were writing the book. We decided not to include cases that were hard to replicate in other cities or examples that only made sense in a particular context. The idea was that every single example is either commons-based or is enabling the participation of the community. And as proof, most of the things we chose have already been replicated.

What is the biggest myth or utopian dream that has been proven real by the projects you explored?

Our goal was to show what can actually be achieved; what we refer to as a concrete utopia, or that it pushes for that. Maybe the ideal sharing city does not exist anywhere right now, but the building blocks for that city exist; they are just all over the world. I believe proving that there are amazing projects in a variety of sectors across the world, breaks down the unachievable utopian critique.

Student Jordi PronkFoto tomada por: 19

Humanitas, the very first case study is a wonderful example.This Netherlands-based project has proven how intergenerational living works. This is an elder-care residence that also provides housing to students and young people. The exchange for living there is 30 hours of their time per month, engaging with the elderly community. The project has been so successful they have set up in multiple locations. This is a very encouraging concept when we think of the baby-boom generation globally ageing along with the housing-crisis the millennial generation is going through. This is a model for institutions to copy or for individuals to replicate.

Another great example of things that were thought impossible but are actually possible would be the Community Bill of Rights in the US. It allows a city or a county to draft civil laws that guarantee certain community rights, including the right to clean air, water, the protection of natural ecosystems, etc.

Now when a community passes a law (there have been over 200 so far) it can ban certain extractive businesses because they go against that community bill of rights. The best example is fracking. Many states have passed legislation to bypass local governments, so businesses were able to come in and destroy the local ecosystem. Up to this point, there hadn’t been any way for cities and communities to fight back. Now if companies want to frack they have to unequivocally prove that their activity isn’t going to hurt the environment.  And this was completely driven by the community, and a big number of organisations, most notably The Community Environmental Legal Defense Fund (CELDF). It is incredibly encouraging that out of the 200 cases, only four were taken to court, the rest have been unchallenged.

What are your favourite three case studies in the book and why?

The first one is rooted in France and is the re-municipalisation of water. Back in the early 1990’s, originating in France and then becoming a standard global practice, large multi-national corporations started privatising regional water systems. Veolia, Suez and others began buying water rights all over the world claiming they could provide cheaper services. Over time it became clear that the companies were not actually delivering a superior product, on the contrary, the quality had significantly decreased as they were not investing enough in the infrastructure. Hundreds of cities and regions handed over their water to a very few number of international corporations.

What is really encouraging – and why is one of my favourite policies in the book – is that since 2000 this trend has completely flipped. Between 2000 and 2015, 235 cities have taken back their water. The most notable example is Paris. In 2008 the city council voted against renewing the contract it had with Suez and Veolia and spent the next two years putting in place their management system. By 2010, the first year it operated the city saved 35 million euros and reduced by 8% the cost for the population.

Another one of my favourites, which is very simple and OuiShare actually pioneered, is the idea of the “zero waste party pack”. Cities have started to take this on as well. The city of Palo Alto, California, for example, has now 22 party-packs distributed throughout the city.

And finally, I would say Spacehive, a civic crowdfunding initiative in the UK. In their first five years, they have raised 6.7 million pounds for 306 projects, and many of these projects have been getting support directly from the Mayor of London. His office has pledged 800,000 pounds towards these community-proposed projects. It was basically a pound for pound match against the 900,000 pounds that had been raised. So citizen proposals getting support and being enabled by the local government works. Most of the times we hear about the public-private partnerships, and I see this as a public-commons partnership.

In need of more inspiration? Read about the rest of projects and city-policies described in the book!

The post Concrete examples for utopian ideals: how the Sharing Cities movement is paving the way appeared first on P2P Foundation.

“Giving everyone an active stake in a project makes a more sustainable funding model”

What was the need that brought Spacehive to existence and how did it situate itself to existing crowdfunding platforms?

Aaron O’Dowling-Keane: The organisation came about in 2012 because the founder and CEO Chris Gourley, a journalist at the time covering planning and architecture within London, saw a real need in the market for something that facilitated a bottom-up transformation, civic participation in urban planning. With this in mind, he set up Spacehive. The very first Spacehive project was the Glyncoch centre in Wales which raised £700,000 out of a £730,000 target. They had six weeks to hit the remainder of their target or they would have lost all the money they raised so far. They thought they had exhausted all their options and were incredibly stressed. At this point Spacehive intervened, offered them help in crowdfunding and introduced them to a couple of big grants to get the community participation going. Glyncoch had the highest unemployment in the UK. People could not afford to pay for this community centre themselves otherwise they would have done it already. Of course it is not about contributions of large amounts of money but about lot of people showing that they are interested by voting with their wallets. They set up the campaign, got everyone involved in the project team to go around door to door, explain the project, get a couple of pounds or whatever people could give and put it in the bucket. With that they were able to go to local businesses and say:”look, a couple of hundred people have all given to something they are really passionate about; if you, as a local business, can also show that you support this, and help fill the needs of the community, they would be very grateful and you will get an amazing return on this of investment.” Once they got the local businesses involved, the next step was to talk to the chains and corporates. They told them “there is a really active community, with businesses and citizens involved, show that you too are also part of this community!” Within six weeks they managed to raise the extra £30,000 mainly from individuals and a number of organisations that came together to make it happen. That was the very first Spacehive project: it showed how people coming together can positively change their space and the community is able control how their resources are being used.

How much did this experience condition the modalities of further work? How did it establish the way the organisation started working?

The most important part was the proof of concept: for a long time we did not know how to get these different fractions working together. A large part of what we do is working with councils as well as corporates as otherwise they tend to work in isolation. So they would put all their energy resources into making one project and then they would move on. Whereas if they were able to combine their resources, giving everyone an active stake in making the project happen, it would become a more sustainable funding model. This way people feel they have more ownership over what is happening in their communities. So in Glyncoch the most important thing was that all these fractions came together and actually made this project happen.

How did you define civic crowdfunding at the time? How did you establish the boundaries of where Spacehive would work?

The truth is we are constantly refining our definition of civic crowdfunding. It means different things to different people, most often the financing of community or shared spaces. There is a real need for it because crowdfunding had already started working in terms of a kick starter in the consumer space, technology and there was a need to use that technology to change the way people were using money and facilitating change within the public arena.

How do you select the projects that you support? What are the selection criteria?

We have eligibility guidelines. The most important thing is that the proposed project has to be available for the community to use, it has to be in a public space or have public access. It is any shared space, it can be managed privately or publicly but it has to be open to everybody.

Do you check if the applicants’ claims are true?

One of the unique features of Spacehive is that we have a verification process from a third party service called Locality. Anyone who uploads a project to our site and wants to pitch at the fundraising stage has to go through this process. It checks whether what the applicants say is true, if they have the appropriate permissions, whether the people or the contractors are already on board.

Many of the projects that go for funding on your site are about very expensive processes. How can you help initiatives with match funding or other kinds of support?

There are two things there. Buildings are just one part of the projects, we also support live events and any temporary or permanent structures that would transform space. What crowdfunding is often used for is not to pay for the entire renovation of a building but to show proof of interest. It works by building up the money for match funding and show grant makers that there is active interest in the community to make the project happen.

Whether it’s a playground or a small part of a greater project, they would crowdfund for that part. Where we come in the project is that we have a whole bunch of partners, grant makers of all shapes and sizes, who are actively looking for projects in their specific areas of interest and so we match them intelligently. So if you came along with a project about creating green spaces and you uploaded it to our website we would then encourage you to pitch that to all the different grant funders who are interested in funding green space.

Who are the grant makers and institutions you work with?

We work a number of corporate partners, councils and grant funders, for instance, the Esme Fairbarn Foundation, one of the UK’s biggest grant funding bodies but we also work with businesses such as Barclays and their Lifeskills programme. They specifically fund programmes with young creators, ages 16 to 25 and they actively promote the skills you build from actually crowdfunding a project.

We also work with the Hyde Group, a property developer looking to build up community cohesion. By using Spacehive they are able to give their residents a platform where they can share their ideas, engage their community and build up a cohesion and neighbourly spirit which is often lacking in big cities like London. All these different organisations use Spacehive in different ways but ultimately their power is that by building up these ecosystems of different partners the projects get funded much faster with a much wider group of stakeholders.

When it comes to municipalities, there are building regulations, planning codes, long term development strategies: how do you make sure that the project you support comply with these frameworks?

All projects have to upload their planning permissions in advance. The great thing about working with the different councils is that if there is a project that is interested in a certain space and they are looking to engage the council, this is a great way of building up their relationship by putting a project in the site as an idea, building up support and use that as an activist route to get the council involved at an early stage.

What are the rewards you offer to the people who donate to the campaigns?

With civic crowdfunding the reward is the project itself. You can say most of the funders are quite ‘selfish’ in that they put money in the projects because they want to enjoy it or they want others to enjoy it. The projects might also offer additional rewards, but generally it is not what motivates people to get involved. Community cafés might offer food or drinks, they might invite you to a party to celebrate successes, or in other projects they might write your name on a part of the pledging wall but ultimately people pledge because they want to be part of something. We do not promote equity-based crowdfunding. In terms of rewards it is on a project by project basis but generally the project itself is the reward.

There was a debate a few years ago around Brickstarter. Some people said “we are already paying tax, why should we also contribute our own money towards the public good?” How do you see your role in relation with the public sector?

I think it is a complimentary role.The joy of the crowdfunding model is that if people see something and they want to pay, they can, and if they don’t want to pay they don’t have to. What the crowdfunding aspect does is that it allows people to vote with their wallets for what they want to see in their area so it is not replacing what the council services and what the government taxes are paying for. Demand is increasing and budgets are decreasing in the government sector so this is a way to actively say how they want to prioritise government spending and get a whole bunch of other partners involved.

Where do you see the field of civic crowdfunding evolving in five or ten years? What are the limitations of civic crowdfunding in shaping the city?

The boundaries are unlimited, you can do anything with civic crowdfunding. It is growing in terms of the public’s recognition of how different people in different places engage. But crowdfunding is not going to replace planning. You will still need investors, but crowdfunding plays a part by getting people to have a say and creating that bottom-up democratisation of choosing what is important and how you want your city to grow. Actually we were listed with the GLA (Greater London Authority) as one of the top ten world innovations in government earlier this year and it is really interesting to see the other projects, to see what other countries are focusing on in terms of how government is engaging with a community. That is so powerful, getting citizens, getting councils and businesses into the same platform and talking about what they want to see happen.

How do you think the civic crowdfunding models can compete with very large speculative investment that is dominating cities especially London? Do you see this creating more spatial justice in terms of property development or at least the development of public spaces?

What people really like about the model is transparency: that they can see all the different partners. It means there is some kind of ownership and responsibility during the project delivery. On the other side, it puts the onus of responsibility on the project developer and project delivery manager to answer back to all the people who funded it. It is very empowering and that is what we are looking to do. To empower citizens to take control and play an active part in the areas where they live and civic crowdfunding allows them to do that.

Interview with Aaron O’Dowling-Keane on 26 July 2016

All images from Spacehive.com

The post Spacehive: Crowdfunding for local projects appeared first on P2P Foundation.

By Jan Mazur

This article is an excerpt from the book Funding the Cooperative City: Community Finance and the Economy of Civic Spaces

Crowdfunding has emerged as a relatively innovative, Internet-enabled way of financing projects, startups and small and medium enterprises (SMEs), especially in their early-stages. In the EU, where most of the financing for companies comes primarily from banks and not capital markets, it has been burdensome and limiting to seek bank financing for startups and SMEs. Most startups and many SMEs lack relevant operating history and track record, cash flow or collateral to secure bank loans. Angel investors and venture capital funds are an option, but they usually cover specific segments of the startup and SME market. Nevertheless, any finance provider may strongly benefit from the risk reduction based on crowd validation, as the product or service information becomes distributed to large amounts of people who may “crowd validate” them by backing their crowdfunding campaigns. Contrary to their inability to raise required capital, the economic significance and impact of SMEs is greater than their size; they are one of the main vehicles for the creation and dissemination of innovation, and their potential to exploit synergies is usually very strong.

Breakdown of the European alternative finance market by model, 2014. Image (c) EC

Crowdfunding, defined as “a collective effort of many individuals who network and pool their resources to support efforts initiated by other people or organisations”, belongs to the domain of finance-providing activities. Its specific mutations can be unregulated, regulated, or exempted from the regulation, depending on multiple criteria and elements of these activities. Crowdfunding is typically performed on online crowdfunding platforms, which offers intermediate support for projects or companies by individuals (crowd) who wish to support them. On a more general level, we typically recognise (i) donation-based, (ii) reward-based, and (iii) investment-based (including equity-based and lending-based) crowdfunding platforms, whereas the level of regulatory attention naturally increases with the increase of risks and the amount of money provided individually and sought cumulatively. However, the regulation tailor-made for crowdfunding does not exist on the EU level, though some EU legislation may apply to financial relations within equity-based and lending-based crowdfunding. National legislations of certain countries specifically regulating crowdfunding do exist, yet the industry significantly lacks the authority that would provide EU-wide standards and fortify the public trust towards the platforms, which would allow especially investment-based crowdfunding to go mainstream.

When it comes to donation-based crowdfunding, from the legal point of view, we typically understand the relations between projects/companies seeking finance and their backers who provide finance for certain non-monetary rewards as a donor contract without any material reward (other than “a good feeling”). Donor-based crowdfunding platforms nowadays enable fundraising for non-profit and charity contributions and projects, but also for education and scientific research. Reward-based crowdfunding is more complex, though the applicable regulation is also quite unrestrictive. Under the reward-based crowdfunding scheme, financial contribution is exchanged for current or future (conditional) goods or services on a platform, which supports and enables the exchange. The business model of these platforms is based on charging a fee in the amount of a few percentage points of the crowdfunded amount. Reward-based crowdfunding normally does not fall within specific financial regulations as the relationships established by the crowdfunding system are usually considered to be basic civil and business-to-consumer relationships. The regulatory requirements are typically low for these platforms and no special approvals are required, except for the regular trade/business licensing.

Typologies of crowdfunding. Image (cc) Eutropian

There are two main models of investment-based crowdfunding: (i) equity-based, and (ii) lending-based crowdfunding, whereas there are also hybrid forms of crowdfunding models based on revenue sharing, profit-sharing or subordinated loans, just as there are hybrid forms of finance. To generalise the regulatory patterns of these crowdfunding models is not an easy task, as the models vary significantly from country to country where national legislations apply. Moreover, these models are also strongly dependent on the corporate structure and the underlying security or instrument that is being traded or issued against the financial investment. However, certain broad generalisations may be drawn; equity-based crowdfunding may fall within the scope of several EU directives. Each of the investment-based models involve monetary motivation, be it an interest, share of profit/revenue, or exit value, but can also involve other motivations, especially in more locally-oriented and social entrepreneurship-oriented crowdfunding platforms. In equity-based crowdfunding, investors invest money into projects or companies in return for a part of their existing or newly issued equity, which may take different forms, such as stocks (securities), or shares, depending on the corporate form of the target company. It is also permissible to issue various classes of stocks, so the stocks may not always possess typical shareholder’s rights, such as voting rights, but only a share on profits.

Crowdfunding companies are typically startups and small and medium sized companies, which tend to choose private capital company forms or even partnerships. Private limited companies are usually cheaper to run, offer flexibility and shield shareholders with limited liability, which makes them a top choice for starting companies. However, these company forms may not be permitted to raise funds from a large amount of investors and are in general not suited to do so. Transferability of shares may also be limiting and limited in the case of private companies, so it disincentives potential investors.

Bulb in Town crowdfunding platform. Image (c) Bulb in Town

Investment-based crowdfunding campaigns are regulated by national regulations and the Prospectus Directive that requires that Member States shall not allow any offer of securities to be made to the public without prior publication of the prospectus. The obligation for companies to publish a prospectus is related to offers of securities with the total amount of investments of at least 5 million EUR (over a period of 12 months), with specific exemptions depending on the number and qualifications of investors and the size of securities.

Crowdfunding campaigns are typically not aimed at qualified investors only. On the contrary, crowdfunding targets large amounts of mostly unqualified investors for individually smaller considerations, often in thousands of euros per investor, yet the typical campaigns run from hundreds of thousands to several millions of euros in total. Empirical evidence suggests that most of these exceptions would not exempt the company from publishing a prospectus based on the Prospectus Directive. Yet, some Member States choose a specific form of regulation of this obligation, as the publishing of a full prospectus may be quite burdensome for startups and small (medium) enterprises: in France small-scale transactions only require a light-prospectus, in Germany, all authorised crowdfunding offerings with a maximum of 10.000 EUR individual investor contribution and a maximum 1 million EUR total investment are exempt from prospectus publishing. On the other hand, in Slovakia the same regime applies for offers between 100.000 EUR to 5 million EUR as for the large offers of 5 million EUR and above. It is advisable to create a specific, crowdfunding- and SMEs-friendly legal regime for middle-range offers, if not directly harmonised on the EU level, than at least on the national level.

Goteo crowdfunding platform. Image (c) Goteo

Some of the services of crowdfunding platforms (the sale and purchase of the financial instruments on behalf of investors) could be regulated by the Markets in financial instruments directive (MiFID), which harmonises the provision of investment services to professional and non-professional clients by investment firms. In the meanwhile, some of the instruments issued by the crowdfunding companies (such as shares in privately held companies) may not be considered financial instruments under MiFID, i.e. transferable securities, and thereby should not be affected by the directive. From the perspective of the platform, it may be beneficial to be a regulated investment services provider, as the MiFID-authorised platform can benefit from the EU passport rule, which allows them to offer services in other Member States. However, this may be very much dependent on the various national company law regimes, which classify the shares of these companies as transferable securities or not. Once authorised, the platform may not be able to conduct any other business than the authorised and regulated. This may lead to unserviced segments of the market with companies issuing different classes of shares, which is hardly desirable. Moreover, being a MiFID-authorised platform poses a relatively large regulatory burden with subsequent costs, which may be impossible to bear by platforms with campaign traffic below a certain threshold.

Lending-based crowdfunding tends to have a looser regulation than the equity-based one, even though it is more relevant in terms of the market size. In certain jurisdictions, authorisation to provide the platform services may be required. The regulation involves information obligations to investors, clear risk representation, but also minimum capital requirements of platforms and resolution plans. Lending-based crowdfunding represents basically two major groups of unsecured loans: (i) peer-to-peer, where consumers offer each other consumer loans, and (ii) peer-to-business, where businesses borrow from multiple lenders. Interestingly, new forms of secured loans start to develop, such as real estate mortgages and developments.

Civic Crowdfunding guidebook published by Spacehive. Image (c) Spacehive

From the viewpoint of community-led urban development projects, the most important sector of crowdfunding is civic crowdfunding. Typical legal structures of civic initiatives tend to be either non-formal or loosely associated around non-profit civic associations (associating persons) and foundations (associating funds), or mixed for- and non-profit legal forms of social enterprises or cooperatives. All types of crowdfunding can be used to some extent by civic initiatives. Non-profit associations and foundations have historically drawn from wide amounts of donors through charity campaigns or collections, which have fared well in the Internet-enabled environment of donation-based crowdfunding. Interestingly, some platforms, such as Spacehive, have been able to cooperate with municipalities, which matching funds to successful crowdfunding campaigns. Yet investment-based crowdfunding requires a revenue-generating activity, which is to be crowdfunded for and which either pays back the loan with interest or generates profit for investors. Moreover, equity-based crowdfunding requires a legal form, which is allowed to issue subscribable shares; therefore non-profit associations or foundations would not be a well-functioning legal form for typical equity-based crowdfunding. Various legal forms have different features and governance structures, for instance cooperatives may favour a more democratic approach to decision-making and profit distribution. On the other hand certain forms put the amount of capital contributions of shareholders first when it comes to decision-making. Nevertheless, traditional company forms can usually be adjusted to fit the needs of civic-oriented crowdfunding, i.e. “civic-adjusted company.”

Investment-based crowdfunding may be a good form of finance for social enterprises and cooperatives, as, in the absence of social banking, regular banking may pose barriers too high in accessing finance. However, banks may perceive crowdfunded companies positively, as they increase their equity, as is also evidenced by the Bulb In Town case. From a business perspective, local crowdfunding campaigns may also draw substantial benefits from the fact that shareholders are potentially significant stakeholders (and vice versa) and consumers of goods and services of the crowdfunded project; the interests of shareholders and stakeholders are aligned.

In conclusion, any regulation must take into consideration elementary risks that investors or lenders face. They need to have access to clear and accurate information on the borrowers or invested companies. Regulators advise crowdfunding platforms to maintain strong engagement of investors and allow them to exchange opinions and discuss the projects openly on the platform. The investors must be well-informed on the project or company they consider investing in and the risks they face: risk of capital loss, risk of dilution, limited possibilities of liquidating an investment and limited information and track record to base the decision on. The platforms may be prone to conflicts of interest due to their business model, which is based mostly on charging fees for successful campaigns. Investors may also over-estimate the due diligence carried out by the platform. It is in the long-term interest of the platforms to make sure and review whether their investors understand the risks of the crowdfunding investments and restrain their investments into a well-built portfolio.

Even though the crowdfunding is a very promising source of alternative finance, the regulation currently available is clearly not suited for it yet. Crowdfunding regulation, currently at the EU and many Member States level as a by-product of existing legislation, should acknowledge that crowdfunding is not defined by a specific form of company shares (securities), but rather by its specific nature. The overall amount of crowdfunding campaigns usually does not exceed a few million euros. Investors are usually dozens of individual and mostly non-professional investors investing thousands or tens of thousands of euros. As crowdfunding in general does not pose a systemic risk, it poses a consumer finance risk, especially the risks of frauds, deceptive campaigns, or embezzlement of finance from the company etc. These risks must be addressed in order to set a level playing field for the platforms and set professional standards. Thorough due diligence of campaigning companies serves the investors, companies, platforms and the market and society equally, as it safeguards against frauds and unsound business plans. It is advisable that countries adopt rules for crowdfunding platforms in order to better manage the expectations of all the parties.

Some proposals could include a lighter regime of prospectus obligations for companies publicly offering stocks worth 100.000 to 5 million euros, specifically if individual investments do not exceed larger amounts; requirements on transparency of the platforms regarding individual campaigns (including investors’ discussions on these campaigns), platform rules, legal terms and conditions of individual campaigns, conflicts of interest; requirements on information obligations of the platforms regarding the risks of the investments in general and advisory to mitigate them (including obligation to limit individual investments into a single company and investor’s portfolio rules), risks of individual campaigns, minimal due diligence requirements for platforms; specific EU-wide rules to allow platforms offer shares of companies to non-professional investors for limited investments regardless of the legal form of companies; guidance on solving conflicts of interest of platforms.

Photo by Medialab Prado

The post Regulating crowdfunding – international resources for local communities? appeared first on P2P Foundation.

Get your ticket for the conference!

Time flies: it seems that while we weren’t looking Growfunding has already turned five! In the past five years, we have joined hands with thousands of people to build up Brussels from the bottom up. That means it’s high time for a celebration, but also to see if we’re doing things right. On Friday the 19th January we’re organising an international conference

Together with Brussels residents, city makers, academics, policy makers and six ‘partners in crime’ (La Ruche from Montreal, Patronicity from Detroit, Spacehive from London, Co-city from Paris, Goteo from Spain, Ideaginger from Bologna and Voor Je buurt from the Netherlands), we will be sharing our knowledge and experiences an all-day debate on ‘The Civic Crowdfunding City’.

What kind of city do we want to live in? And what role can civic crowdfunding play in building this city?

What kind of a city and society can we create through civic crowdfunding? And just how democratic will this be?

We’ll compare good practices from 8 world cities within four different themes:
>          The inclusive city: how can civic crowdfunding be used to include people that are otherwise excluded from urban life?

>          The pup-up city: which kind of urban spaces are created through civic crowdfunding and what are the characteristics?

>          The Arrival city: which social and cultural infrastructure is created for refugees, migrants and newcomers through civic crowdfunding?
>          The circular city: How can civic crowdfunding contribute to the creation of a circular economy?

Click here for the entire programme e-and the names of the speakers.

PRIX LIBRE / VRIJE BIJDRAGE / FREE DONATION

Tickets for the conference on Friday 19/01 will be available through this growfunding-campaign. Contact [email protected] if you need an invoice.

It’s entirely up to you how much you (or your employer) want to pay to participate in the full-day ‘The Civic Crowdfunding City’ conference. The higher your contribution, the more tickets we will be able to make available free of charge to people unable to afford them. These tickets will be distributed through our partner organisations, such as Globe Aroma, Cinemaximiliaan, Article 27, samusocial and klein kasteeltje.

There is no admission fee for students, contact [email protected] to reserve you place.

Everyone who has provided support for this event will be sent our digital publication on the Civic Crowdfunding City (estimated publication date: May 2018).

Oh, and by the way, we’re also looking for around twenty volunteers to help us ensure that the event runs smoothly. If you’re interested in participating, don’t hesitate to register as a volunteer via our brand-new Volunteer button;-)

PARTY ALONG?

You can find all info and the programme on www.growfunding.be/bazaar. Prepare for a fantastic line-up of Brussels artists: an ‘empty shop’, a fashion show by Tony Bland, a dance performance by The Slayers, concerts by Nawaris, Arumbo and Fanfakids, great beats from the 54Sound, and more. You can find a detailed programme: friday and saturday. Tickets for the concerts and performances can be purchased through the Beursschouwburg theatre. All income generated by this event will go to current growfunding projects.

(This text was translated by Ubiqus Belgium, Growfunding’s language service provider)

https://www.facebook.com/events/161683631093820/

Photo by Medialab Prado

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