Document Type
Article
Publication
Brown Undergraduate Law Review
Year
2024
Citation Information
Andrew A. Schwartz, Investment Crowdfunding: Anarchy in the U.K.?, 5 Brown Undergraduate L. Rev. 99 (2024), available at https://scholar.law.colorado.edu/faculty-articles/1661.
Abstract
Investment crowdfunding is a new type of venture capital market open to the broad public--'the crowd'--and the United States and United Kingdom adopted rather different legal regimes to govern and police it. In order to protect investors, the United States enacted an extensive set of laws and regulations, while the United Kingdom took a 'liberal' approach to investment crowdfunding, imposing few legal rules and relying primarily on private ordering.
A decade has now passed, allowing us to see whether the liberal U.K. market has devolved into anarchy and failure in the absence of heavy regulation. Recently published data reflects well on the liberal model: The U.K. has the largest and most successful investment crowdfunding market in the world by far, generating one billion dollars in startup finance each year with practically no fraud, and providing investors with competitive financial returns.
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