Calls increase for raising of European crowdfunding limit
Crowdfunding in Europe is seeing growing success, so much so that calls have increased to raise the current limit on each crowdfund campaign, which currently stands at €5m. The chief executive and co-founder of Crowdcube, Darren Westlake, stated: "We are leading a charge to convince the EU to raise its limit on the amount of finance that any business can raise without a prospectus”. Westlake’s comments were due to seeing a growing amount of campaigns reaching the maximum limit relatively quickly and easily, spurring frustration that they could have achieved a greater level of funding if the cap was raised. As a result, the EU is reviewing crowdfunding finance, with a proposal to double the maximum limit to €10m.

A fintech startup aimed at teaching children how to manage their pocket money has become the most highly funded crowdfunded fintech startup in Britain after raising just under £4m in a matter of weeks.

GoHenry, a prepaid debit card and app that comes with parental controls, launched a crowdfunding campaign earlier this year to raise extra revenue. It set an initial fundraising target of £2m which was reached in less than 48 hours. It has since gone on to secure £3.99m from more than 2000 investors.

Meanwhile in May another fintech venture, digital bank Tandem, surpassed its £1m target in less than 20 minutes through crowdfunding platform Seedrs. And in March another digital challenger bank Mondo managed to raise £1m in 1 minute and 36 seconds. In total, more than €4bn was raised in Europe through crowdfunding platforms.

The success of GoHenry and others has led to calls for the current limit on equity crowdfunding, which stands at $5m/£3.9m, to be raised. The chief executive and co-founder of Crowdcube, a crowdfunding platform that was used by GoHenry, believes that GoHenry would have been able to raise much more money if the $5m limit had been raised. "We are leading a charge to convince the EU to raise its limit on the amount of finance that any business can raise without a prospectus," said Darren Westlake.

The EU's limit on crowdfunding finance is being reviewed with a proposal to double it to €10m currently under discussion in Brussels. A European Commission paper published in May stressed its desire to support crowdfunding as an alternative source of finance for Europe's start-ups.