- Financial regulation — Alternative investment fund
This chapter highlights the EU legal framework applicable to reward-based crowdfunding, and the consumer protection mechanisms enshrined therein. Reward-based crowdfunding campaigns help small and medium-sized enterprises (SMEs) or even solo start-ups not only with financial support from the ‘crowd’ but also with marketing tools, as well as useful insights and information to realise their dreams and sell their innovative products. While being excluded from the scope of the Crowdfunding Regulation, reward-based crowdfunding falls within the scope of application of EU Consumer Law. The EU consumer acquis is currently being reviewed and modernized, with a view to the creation of a Digital Single Market. The chapter assesses to what extent the current instruments of EU Consumer Law are adequate to deal with the rising phenomenon of reward-based crowdfunding, and how they could be modernised.
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