Daniel: Investing in local companies is often an emotional investment, so it is important to take advantage of it and to strengthen the local economy, brand awareness. Most investments in the early phase arrive from a distance within 120 km. And as crowdfunding relies heavily on existing customers and the strength of community, an innovative company from abroad may not necessarily be more attractive to investors by running a campaign in another country. “I believe that expectations of a sudden surge in cross-border deals are exaggerated. If a non-sophisticated German investor is given the opportunity to finance a Spanish craft brewery, he will not be interested in doing so even if he is a big beer fanatic”. Education and the level of service will matter at the end of the day.

What support and guidance can a national regulatory authority provide to the platforms in order to comply with the ECSP Regulation?

10 years ago, when we launched the platform, we received no support at all from the regulator, in fact, they made it rather difficult for us to get started. They now have a very supportive attitude towards the alternative finance market. In Austria, they are so proactive, that the Austrian Financial Market Supervisory Authority has developed a special procedure for fintech companies – not exclusively for crowdfunding – to facilitate the obtaining of operating licences. This Regulatory Sandbox aims to simplify the path to reaching the regulated entity status for fintech businesses. Conda also made use of this option, after having evaluated the alternatives of obtaining a licence abroad, but in the end they decided to stay with the Austrian regulator as they have been building mutual trust for over 10 years now.

How did you determine the financial and human resources needed to obtain an ECSP licence?

As a rule of thumb, we get external support from local lawyers but the management team determined the resources. We allocated a budget of 100,000 euros in advance, most of which were spent on legal costs. It was also mentioned that they often have to work late into the evening or on weekends to prepare the necessary documents. We also employed a new head of legal. “I think that external advisers are also essential – although they are costly and do not speed up the process – but their professional approach ensures that they meet the strict Austrian requirements. It took us about half a year until the documentation was complete.”