Barriers for Internationalization
This document describes basic barriers that prevent crowdfunding to became truly international funding scheme. It’s a basic overview document that should make readers aware of several aspects to consider when planning to participate in international crowdfunding. It brings useful information for all crowdfunding actors – investors/backers, platforms and campaign initiators.
|Country||Number of platforms|
The document divides the barriers for internationalization into two basic groups – legislative and non-legislative barriers. Legislative barriers mean regulations, laws and legislative requirements, in different countries for all crowdfunding actors to follow if they want to participate in crowdfunding business. Legislative barriers vary considerably for different types of crowdfunding, equity-based crowdfunding being usually the most restricted type while donation-based and reward-based being either regulated lightly or not at all.
Non-legislative barriers present a wide range of characteristics that may play a role for an international crowdfunding business, with cultural differences playing a prominent part. They are described using already established methods and compared across partner countries. It shows that barriers to successful international campaign or platform may lie outside legislative framework.
Table 1: Number of platforms in the market in partner countries as of November 2016
Who should benefit from the information provided in this document?
The document is intended as a basic overview for all crowdfunding actors – investors/backers, platforms and campaign initiators. However, the last two groups would probably benefit the most, especially the campaign initiators because there are hundreds of campaigns published daily and enormous amount of money are expended on campaign promotions. This guideline should help them to evaluate which markets they should target to. But it could be also helpful as a primary insight for platforms that consider transnational operations.
Does it present useful information for platforms, too?
Definitely. Apart from obvious obstacles (eg. different language) it suggests many other parameters to be considered when launching a platform – observing cultural variations can make a difference between successful and unsuccessful platform. The cultural background can influence which mode of platform operation to choose (eg. all-or-nothing versus take-what-has-been-collected-so-far), concept of the platform, preferred topics, services to campaigners, fees etc.