Crowdfunding clampdown may hit small firms hard

Crowdfunding clampdown may hit small firms hard

Plans to regulate crowdfunding could deprive thousands of small businesses of a crucial source of finance, MPs and industry experts are warning.

They say that rules intended to protect small investors strike the wrong balance on key issues and threaten the growth of the practice.

Crowdfunding raised more than £1 billion for small and medium-sized enterprises last year. The Government has signalled its support, because the sector provides a way of raising investment for small firms independent of the banks.

Lord Young of Graffham, Downing Street’s official advisor on enterprise, told the industry, “We are behind you.”

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