The $1 Trillion Opportunity: How Secondary Market Innovation Can Unlock Global Crowdfunding Liquidity

GECA — A Strategic Analysis of Expert Insights from GECA’s Architects of Change Panel

Discussion Paper for Consultation — This article synthesizes insights from GECA’s “Architects of Change” panel (Moderator: Devin Thorpe; Panelists: Chris Lustrino – Kingscrowd , Scott McIntyre – WEconomy/ Crowdfunding Professional Association, Nora Szeles – Tokeportal.com, Neera Patel – Dacxi Chain). Statistics and estimates reflect panel discussion and require empirical validation. This is not a GECA policy statement.

Executive Summary

The global equity crowdfunding industry stands at a critical inflection point where liquidity - or the lack thereof - represents both its greatest challenge and most significant opportunity. Insights from leading industry practitioners suggest that secondary-market development could unlock a trillion-dollar opportunity by transforming crowdfunding from an illiquid investment class into a dynamic ecosystem that rivals traditional capital markets.

Key Strategic Findings

  • Market Velocity Crisis: ~70–80% of investors prefer accessible liquidity options (panel estimate; to be validated), while capital typically remains locked for 3–10+ years, creating systemic velocity constraints.
  • Trust Infrastructure Gap: Current secondary venues often lack transparent valuation mechanisms; StartEngine’s secondary posting board illustrates information asymmetry challenges when listings show a name and price but little decision support.
  • Regulatory Fragmentation Costs: Platforms navigate a complex global legal patchwork; in the EU, ECSPR alignment helps, but some manual compliance elements still undermine efficiency gains.
  • Technology Readiness vs. Adoption: Blockchain can enable embedded compliance and atomic settlement, but regulatory hesitancy and UX considerations slow adoption.
  • Generational Liquidity Demand: Liquidity preference is situational, not purely generational - younger investors can be equally or more liquidity-sensitive, influenced by crypto’s always-on trading.

Design Options for Working-Group Evaluation

The following are options and hypotheses for GECA working groups to evaluate; they are not GECA policy or directives.

  • Valuation & Transparency Layer: Pilot standardized, data-driven pricing signals and a minimum-disclosure pack for secondary eligibility.
  • Bilateral Recognition Pilots: Explore principle-based mutual recognition (e.g., KYC/AML attestations, disclosure baselines) with one or two compatible regulators.
  • Embedded Compliance (Tech-Enabled): Test where smart-contract logic can automate transfer restrictions - without imposing crypto-native UX on retail investors.
  • Distribution Pathways: Assess light integrations with major brokerages/RIAs (data syndication, guided hand-offs) to broaden reach and price discovery.
  • Trust-First Market Design: Prioritize ratings/verification, auditability, and transparent dispute resolution ahead of raw transaction speed.

The Liquidity-Velocity Challenge: Quantifying Market Constraints

“The velocity of the market is very slow today. A lot of people enter the market and then they go back to sitting on the sidelines waiting for something to happen.” — Chris Lustrino

Investors often expect returns within 1–2 years despite being advised to anticipate 10–15-year holding periods. When exits don’t materialize, many pause new allocations until they see actual liquidity from existing positions. Lustrino estimates 70–80% of investors (panel estimate; to be validated) want liquidity regardless of age cohort.

He hypothesizes that predictable partial liquidity - e.g., the ability to sell 15–30% of a portfolio annually - could materially increase participation:

“When you create a functioning secondary market where you have a good amount of predictability that each year you can sell at least 15, 20, 30% of your overall portfolio, you're going to see way more participants in the market.”

The Trust Infrastructure Deficit: Information Asymmetry as a Market Barrier

“Trust is the actual currency of any marketplace. Ratings and transparency are what makes trust tradable.” — Scott McIntyre

Today’s secondary listings are often thin on decision-quality data. As Lustrino noted about StartEngine’s secondary posting board, many offers show just a name and a price - not enough context for a fair decision. McIntyre argued that standardized data - comparable financials, consistent definitions, and verified disclosures - reduces information asymmetry, especially across cultures and languages.

Why thin data hurts pricing

  • Inconsistent disclosures make relative value opaque.
  • Retail investors face higher error risk without verified comparables.
  • Sparse context depresses confidence and market velocity.

A practical research layer (what “good” looks like)

Lustrino outlined a workable model: use recent filings and peer fundamentals to produce valuation “green zones”—ranges where risk/return looks reasonable—giving buyers and sellers shared reference points.

Regulatory Architecture: Three Hurdles to Global Implementation

Neera Patel highlighted three structural hurdles:

  1. Global Legal Patchwork - Multiple, sometimes conflicting securities rules across jurisdictions multiply compliance cost and complexity.
  2. Exchange vs. Bulletin Board Classification - Crossing into “unregistered exchange” territory triggers heavier obligations; many venues default to manual bulletin boards to stay compliant.
  3. Cross-Jurisdictional Compliance & Custody - KYC/AML, asset custody, and transfer rules vary widely and scale poorly across borders.

ECSPR: Progress and paradox

Patel views ECSPR as a strong blueprint (single license; shared rules) that improves cross-border raising. Yet Nora Szeles flagged the “ECSPR paradox”: regulators created the market, but independent, often cash-flow-negative startups must both build it and educate regulators. National implementations and ICT expectations can still feel modeled on incumbents, not startups.

Technology Infrastructure: Blockchain Capabilities vs. Implementation Reality

Where blockchain helps

  • Embedded compliance: Smart contracts can enforce transfer restrictions and eligibility.
  • Atomic settlement & audit trails: Faster, more transparent cross-border settlement; zero-knowledge proofs for privacy-preserving verification.
  • Self-custody options: Direct ownership pathways where appropriate.

Why explainability still wins

“Is this the tail wagging the dog?” — Scott McIntyre

McIntyre cautioned that technology must earn trust through clarity and accountability, not just speed. Lustrino added that distribution may matter more than chain-selection:

“The market goes to the stratosphere when Robinhood/SoFi/Schwab/Fidelity put these opportunities into brokerage accounts and advisors’ toolkits.”

Potential Industry Impact: The Democratization Dividend - and Small-Company Concerns

“Liquidity heightens inclusion… it also creates the conditions for community wealth building.” — Scott McIntyre

Secondary markets can help small investors diversify, recycle capital, and support more local ventures. But Devin Thorpe raised a real risk: micro-issuers (e.g., $50k–$200k raises) might face valuation volatility and “stock-price management” pressure.

McIntyre acknowledged we need evidence from real market microstructures to judge effects—especially for very small companies where investor sentiment can move prices more than fundamentals.

The Crypto Conditioning Effect: How Digital Assets Shape Liquidity Expectations

“Why does everyone want to invest in crypto? There’s extreme liquidity—you could buy and sell at any moment.” — Chris Lustrino

Crypto’s 24/7 trading recalibrated retail expectations. Many investors “don’t realize the difference between startups and this,” Lustrino noted. Designing secondary markets means balancing liquidity access with startup realities, so features don’t induce inappropriate pressure or unrealistic return timing.

Cross-Border Settlement Efficiency: The Correspondent-Banking Problem

Neera Patel underscored how multi-hop correspondent banking can turn small cross-border trades into slow, uneconomic transactions. Blockchain rails could compress hops and enable near-real-time settlement - if regulators and banks provide clear on/off-ramps.

Education as Infrastructure: Beyond Investor Awareness

“Education comes first… most investors should be aware that startups are long-term investments.” — Nora Szeles

Four audiences need tailored education:

  • Investors: timelines, risk, portfolio construction, and secondary mechanics.
  • Issuers: IR discipline, disclosure cadence, and how secondary activity affects operations and valuation.
  • Regulators: how transparency/standardization in secondaries can enhance investor protection.
  • Advisors/Intermediaries: portfolio fit and product governance for retail.

Key Areas Requiring Industry Attention

Market Velocity & Behavior: Balance investor liquidity needs with startup financing stability (e.g., partial liquidity windows, transparent pricing, realistic education).

Information Asymmetry: Move beyond minimal disclosure to standardized data, consistent valuation rubrics, third-party verification, and investor-usable research.

Cross-Border Coordination: Explore mutual recognition and principle-based supervision; test automated compliance where regulators permit.

Technology & Distribution: Build for explainability and partner with mainstream brokerage/advisory channels; adopt blockchain where it confers clear operational gains without adding UX friction.

Trust Infrastructure: Implement ratings, verification, auditable processes, and clear dispute resolution - trust is the market’s base currency.

Economic Impact: Quantifying the Trillion-Dollar Opportunity

(Scenario inputs for discussion; require validation and further research.)

  • Liquidity Premium: Companies with credible secondary access may command ~20–40% valuation uplifts vs. illiquid peers.
  • Participation Expansion: Liquidity confidence could increase investor deployment 3–5×, lifting total capital by 200–400% among current participants.
  • Market Entry Acceleration: Reduced illiquidity barriers could expand the investor base 5–10×.
  • Cross-Border Flows: EU–US alone could unlock $50B+ of currently constrained cross-border participation.
  • Institutional On-Ramps: Secondary infrastructure that meets institutional standards could invite pensions/endowments that are otherwise constrained by illiquidity.

Critical Risks & Mitigations

Small-Company Valuation Pressure

  • Holding-period requirements before secondary eligibility
  • Company-controlled windows vs. continuous trading (for micro-issuers)
  • Minimum information standards to list
  • Investor education (or suitability gates) for secondaries

Technology Complexity & Trust

  • Prioritize explainability; retain human oversight
  • Full audit trails and independent dispute resolution
  • Independent ratings/verification to reduce “black box” dynamics

Regulatory Backlash

  • Continuous regulator dialogue; guardrails exceeding minimum rules
  • Phased pilots in sandboxes; strong investor education
  • Collaborative industry standards via neutral bodies (e.g., GECA)

First-Mover Dynamics

  • Platforms, jurisdictions, and tech providers that establish liquidity, compliance, and data moats may capture durable network effects.

Conclusion: Toward Trust-First Secondary Market Development

Mainstream adoption likely depends less on a single technology and more on trust, transparency, and distribution. As Lustrino noted, the tipping point arrives when secondary access and research are embedded in familiar brokerage experiences. McIntyre reminds us: without accountability and verifiable transparency, enthusiasm fades and velocity stalls.

Given the interdependencies - regulation, technology, market design, and education - progress will come from iterative pilots, not a single, predetermined framework. This discussion paper aims to inform GECA-led working groups as they evaluate focused experiments that serve investors, issuers, platforms, and regulators - and advance the democratization of capital globally.

Next Steps & Participation

GECA will convene working groups (Liquidity, Policy & Standards, Technology) to scope 2–3 near-term pilots (e.g., a valuation-transparency prototype; a microstructure/liquidity-window trial; a KYC reciprocity sandbox). Stakeholders interested in contributing can register interest at thegeca.org.

Ready to explore the full discussion? Watch the complete Architects of Change panel where industry leaders examine the future of global equity crowdfunding: Breaking Down Borders - Full Discussion

Join the movement for borderless investment. GECA brings together platforms, regulators, and industry stakeholders to advance global equity crowdfunding. Learn more about membership opportunities and help shape the industry's future: thegeca.org/membership-app-form

by GECA

GECA Welcomes African Investment Pioneer Meseret Warner: Bridging Diaspora Capital with Continental Innovation

Ethiopia's equity crowdfunding trailblazer joins steering committee to unlock Africa's $80+ billion annual diaspora remittance potential for entrepreneurial growth

The Global Equity Crowdfunding Alliance (GECA) is proud to announce that Meseret Warner, Founder and Managing Director of Ignite Investment, has joined our steering committee as a strategic advisor. This pivotal appointment brings one of Africa's most innovative crowdfunding pioneers to GECA's mission of creating truly borderless equity investment markets.

Meseret's appointment represents a strategic expansion of GECA's global vision, introducing critical expertise in diaspora capital mobilization and emerging market development. As the architect of Ethiopia's first equity crowdfunding platform, she brings proven experience in navigating complex regulatory environments while building sustainable investment ecosystems that connect local entrepreneurs with global capital.

From Refugee to Financial Revolutionary

Meseret Warner's extraordinary journey from teenage refugee to pioneering fintech entrepreneur embodies the transformative power of resilient innovation. After being separated from her family during political upheaval in Ethiopia and spending time in a Kenyan refugee camp, she received a scholarship to study and live in Canada - one of only few refugees selected from hundreds of applicants.

This early experience of overcoming seemingly impossible circumstances shaped her approach to problem-solving and her unwavering commitment to creating opportunities for others. "Every challenge I encounter teaches me to be more resourceful and never give up," Meseret reflects. "I learned that instead of saying 'I cannot do this,' I ask 'How about I try this?' That mindset has been fundamental to everything I've built."

Building Africa's Investment Crowdfunding Infrastructure

Meseret's professional foundation spans over two decades of global experience across technology, development, and financial services. Her career trajectory includes pivotal roles at Statistics Canada, where she developed expertise in data systems, IT solutions and economic analysis, and subsequent positions with the United Nations and Ethiopian Central Statistical Agency, where she led technology modernization initiatives.

This diverse background culminated in 2016 with the founding of Ignite Investment with initial experimentation of non-traditional financing mechanisms and launching in 2022Ethiopia's first equity crowdfunding platform designed specifically to channel diaspora capital into high-growth African enterprises. Under her leadership, Ignite has pioneered innovative approaches to cross-border investment that address critical financing gaps for startups and SMEs across the continent.

Unlocking Diaspora Capital Potential

Meseret's vision centers on redirecting a portion of the $80+ billion in annual African diaspora remittances toward productive investment rather than traditional consumption. This strategic approach recognizes that Ethiopian diaspora alone contributes over $3 billion annually - capital that could transform the entrepreneurial landscape when channeled through structured investment platforms.

"Africa attracted $6.4 billion in venture capital in 2022, but that represents less than 2% of global venture investment," Meseret explains. "Meanwhile, our diaspora sends $80 billion home annually. Ignite's mission is to bridge this financing gap by creating trustworthy mechanisms where diaspora investors can see real impact while supporting continental growth."

Her platform has demonstrated remarkable success in this approach, with 65% of entrepreneurs raising capital being women-led enterprises, directly addressing gender disparities in access to investment capital across African markets.

Regulatory Innovation and Market Development

Operating within Ethiopia's regulatory framework, Meseret has navigated complex local and the U.S. compliance requirements while building the institutional relationships necessary for sustainable crowdfunding operations. Her partnerships with Zemen Bank, GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit), and the African Development Bank demonstrate her ability to create comprehensive innovative financial infrastructure that supports both investors and entrepreneurs.

Recent achievements include facilitating a multi-million dollar joint venture between MACCFA Freight Logistics and global giant CEVA Logistics - marking only the second significant foreign direct investment in Ethiopia's logistics sector. This success illustrates her capacity to coordinate complex international transactions that create lasting economic impact.

Expertise in Gender-Smart Investing

Meseret's commitment to women's economic empowerment extends beyond her platform operations to her broader professional engagements. As former President of the African Women Entrepreneur Program (AWEP) Ethiopia Chapter and recent Women's Economic Empowerment Technical Advisor for GIZ-funded initiatives, she has consistently championed policies and programs that increase women's participation in entrepreneurship and investment.

Her work with GOPA Worldwide Consultants on strengthening Ethiopia's Business Development Services market included designing the country's first technology-enabled voucher-based service delivery model, expanding affordable access to business development support for underserved entrepreneurs, particularly women-led enterprises.

Academic and International Experience

Meseret's educational foundation includes a Bachelor's degree in Computer Science and Mathematics from the University of Regina and a Master's in Globalization and Development from the University of Manchester. This academic background, combined with her entrepreneurial experience in the Bizdom Cleveland accelerator, provides both theoretical understanding and practical knowledge of global investment markets.

Her international experience spans humanitarian work with UN OCHA in Pakistan, technical and advisory roles in Canada and Ethiopia, and startup development in the United States, creating a unique perspective on how investment flows can be optimized across different economic and regulatory environments.

Strategic Vision for Global Crowdfunding

Meseret's appointment to GECA's steering committee comes at a critical moment as the organization works to establish harmonized standards and facilitate cross-border investment flows. Her expertise in emerging market dynamics, diaspora engagement, and regulatory navigation provides essential insights for GECA's mission to create truly borderless equity crowdfunding.

"I'm honored to join GECA's steering committee during this transformative period for global equity crowdfunding," Meseret commented. "Throughout my career, I've seen how innovative financing models can unlock entrepreneurial potential while creating sustainable economic development. GECA's vision for borderless investment aligns perfectly with our work to redirect diaspora capital toward productive enterprises that drive continental growth."

Andrew Field, Head of GECA's steering committee, noted: "Meseret brings exactly the type of innovative thinking and market-building expertise that GECA needs to advance our global vision. Her success in mobilizing diaspora capital and creating sustainable investment ecosystems provides a proven model for how equity crowdfunding can transcend traditional geographic boundaries while maintaining appropriate investor protection."

Advancing African Financial Innovation

As GECA continues expanding its global influence, Meseret's expertise in African markets and diaspora capital mobilization will prove invaluable for developing strategies that address the continent's unique opportunities and challenges. Her proven ability to build trust between investors and entrepreneurs across geographical and cultural boundaries aligns perfectly with GECA's mission to create efficient, transparent global investment markets.

Her work demonstrates that successful international crowdfunding requires more than technological platforms - it demands deep understanding of cultural and market dynamics, regulatory requirements, and the institutional relationships necessary to build sustainable investment ecosystems.

Building Tomorrow's Investment Landscape

With Meseret Warner's addition to our steering committee alongside other recent strategic appointments, GECA is assembling the comprehensive expertise needed to address equity crowdfunding's most complex challenges. Her appointment brings critical perspectives on emerging market development, diaspora capital mobilization, and gender-inclusive investment strategies.

"The future of African economic development lies in entrepreneurship, investment, and trade rather than traditional aid models," Meseret emphasizes. "I'm excited to work with GECA's global network to ensure that Africa's vast entrepreneurial potential receives the capital and support necessary to create sustainable prosperity across the continent."

As we welcome Meseret to our steering committee, we're reminded that the path to borderless equity crowdfunding requires not just regulatory innovation, but also the cultural intelligence and market-building expertise that enables confident investment decisions across diverse global markets.

The appointment of Meseret Warner signals that GECA is not just planning for the future of global equity crowdfunding - we're building it with the expertise and institutional relationships necessary to unlock investment potential across every continent.

About GECA

The Global Equity Crowdfunding Alliance (GECA) is an international organization dedicated to advancing regulatory harmonization, market development, and best practices in equity crowdfunding worldwide. Learn more at thegeca.org.

Contact: For media inquiries about GECA's steering committee appointments and global initiatives, please contact the steering committee at: contact@thegeca.org

Want to join GECA's mission? Visit thegeca.org/join to learn about supporter opportunities for platforms, service providers, and industry stakeholders.

 

 

 

by GECA

The $1 Trillion Opportunity: Building Liquidity Through Innovation for Crowdfunding

The $1 Trillion Opportunity: Building Liquidity Through Innovation for Crowdfunding

Could secondary market liquidity unlock crowdfunding’s next growth phase? In this GECA Architects of Change panel, industry leaders explore how trust-first trading infrastructure, regulatory harmonization, and technology innovation can transform investor participation and capital velocity. Watch for actionable insights on valuation transparency, cross-border frameworks, and mainstream distribution strategies.

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Devin Thorpe — Moderator Founder of Superpowers for Good and CEO of SuperCrowd. A seasoned author and speaker focused on impact investing, social entrepreneurship, and sustainability. Devin has interviewed 1200+ thought leaders and innovators, organizing industry events and building global networks around positive change and accessible capital markets.

Chris Lustrino Founder and CEO of KingsCrowd, the leading data and analytics platform for equity crowdfunding. With deep expertise in investor behavior analysis and market transparency, Chris provides Morningstar-style insights for private markets, helping investors make informed decisions through comprehensive company ratings and market research.

Scott McIntyre Co-founder of WEconomy, Vice-Chair of the Crowdfunding Professional Association (CfPA) board, and GECA Steering Committee member. Scott champions trust, transparency, and investor protection in alternative finance while implementing equitable social and financial movements through innovative tools that establish thriving regional economies.

Nora Szeles Co-founder of TokePortal, one of Hungary’s first equity crowdfunding platforms with expanded presence in Malta. With a capital markets background as former derivative trader and fund manager, Nora brings practical insights on making liquidity solutions scalable and accessible for both entrepreneurs and retail investors.

Neera Patel Product Lead at Dacxi Chain, a technology company focused on enabling crowdfunding platforms to scale effectively across global markets. Neera specializes in frameworks that balance investor protection with innovation, working extensively on legal infrastructure requirements for global secondary market implementation.

by GECA

Regulation as Rocket Fuel: How Smart Compliance Drives Growth in Global Crowdfunding

A Strategic Analysis of Expert Insights from GECA's Architects of Change Panel

How industry leaders transform regulatory compliance from operational burden to competitive advantage

Executive Summary

The crowdfunding industry stands at an inflection point where regulatory compliance has evolved from operational burden to strategic differentiator. Analysis of insights from leading industry practitioners across four major markets reveals a fundamental shift: platforms that embrace compliance as a core competency are achieving superior performance metrics while their competitors struggle with enforcement costs and market access barriers.

Key Strategic Findings:

  • Compliance ROI Reversal: "Compliance is the pathway to profitability," according to Eric Cox (Netcapital COO), with non-compliance costs vastly exceeding compliance investment when enforcement actions materialize
  • Market Creation Through Regulation: Florence de Maupeou (France FinTech) revealed how France's 2014 regulatory framework didn't constrain innovation -it created an entire crowdfunding market by eliminating banking monopolies
  • Institutional Validation Accelerating: Bruce Davis (UK Crowdfunding Association Chair) announced the London Stock Exchange's entry into crowdfunding via PISCES permission, signaling mainstream financial institution acceptance
  • AI-Driven Efficiency with New Risks: Karsten Wenzlaff (German Crowdfunding Association) reported widespread AI adoption for due diligence, while Cox warned of emerging threats including AI-generated fake companies

Panel Insights: Global Leaders on Regulatory Reality

The Global Equity Crowdfunding Alliance's (GECA) "Architects of Change" roundtable featured senior executives from leading platforms and associations across the US, UK, Germany, and France.

Panel Participants:

The Contrarian Economics of Compliance

Eric Cox articulated the fundamental reframe that challenges industry orthodoxy: "Compliance is the pathway to profitability. Being non-compliant is far more expensive than being compliant to begin with. It's a matter of when you pay, not if you pay, and it's a function of how much."

This principle is validated by Netcapital's operational data: as one of the few top platforms never fined by FINRA or SEC, they report 23% higher issuer retention rates and 31% premium pricing power compared to competitors with regulatory violations.

Legal Uncertainty as the Hidden Cost Driver

Karsten Wenzlaff identified the core friction in cross-border expansion: "Legal uncertainty drives up the prices because you have to find lawyers. And in the field of crowdfunding, there are very few very specialized lawyers who actually know what they're talking about."

The European solution through ECSPR demonstrates the power of standardization: while the Key Investment Information Sheet (KIIS) spans just six pages, it's supported by approximately 150 pages of regulatory guidance. This approach has reduced cross-border compliance costs by an estimated 60-70% while providing access to a unified 450 million person market.

Regulation as Market Creator

Florence de Maupeou provided the most compelling counter-narrative to regulation-as-constraint thinking: "Actually crowdfunding, crowd equity, crowd lending, were able, thanks to regulation, it creates the markets. So the regulation in 2014 was the beginning of the real development of the market... before the regulation, crowd lending was just not possible because they were a bank monopoly."

France's experience demonstrates regulation-enabled market expansion: the country now hosts what de Maupeou describes as "too many platforms," indicating successful ecosystem development rather than constraint.

The Trust Foundation

Moderator Gene Massey captured crowdfunding's fundamental challenge: "The whole system is based on trust - if I give you my money, can I trust you?"

The panel revealed how regulatory frameworks systematically build this trust:

  • Disclosure Standardization: Jenny Kassan highlighted critical gaps: "The Form C can be very hard to find on some of the platforms. Which is really frustrating... there could be more uniformity."
  • Investor Protection: The ECSPR framework includes loss-capacity checks (10% of net assets as reference) and mandatory four-day reflection periods to protect retail investors.
  • Marketing Discipline: Cox shared Netcapital's pre-emptive approach: "One of the things that we do is we have people submit their transcripts for their videos before they even go to shoot. It's so heartbreaking when people create these incredible high budget productions, Hollywood-esque videos. And then they'll say something like, 'we're gonna be the next Uber.' And it's just oh yeah, cut, reshoot."

AI Implementation with Governance

The panel revealed widespread AI adoption with emerging challenges. Wenzlaff reported platform evolution: "Most of them use machine learning models for due diligence... they will feed documents, legal documents about the issuer and try to distinguish or understand what is actually going on."

However, Cox identified critical new risks: "We just got our first fake company that tried to raise capital with us... some of the team members were just entirely not real. Fictitious members." His warning was direct: "AI isn't your attorney."

Strategic Framework: Five Core Challenges and Solutions

Note: This framework represents strategic interpretation of panel insights rather than formal GECA recommendations. Working groups will further develop these concepts.

Challenge 1: Compliance Cost Management

The Traditional View: Regulatory compliance represents pure operational expense, with platforms reporting 15-25% of revenue allocated to legal and compliance functions.

The Strategic Reframe: Cox's contrarian position challenges this orthodoxy, supported by Netcapital's performance data demonstrating competitive advantages from proactive compliance investment.

Implementation Strategy:

  • Establish compliance as revenue enabler, not cost center
  • Invest in pre-emptive compliance infrastructure before issues arise
  • Market regulatory track record as competitive differentiator to both issuers and investors

Challenge 2: Cross-Border Market Access

The Problem: Legal uncertainty across jurisdictions creates prohibitive expansion costs, with platforms reporting $500K-$2M in legal fees for each new market entry.

The European Solution: The ECSPR framework addresses this through standardization, reducing compliance costs while enabling access to unified markets.

Strategic Approach:

  • Prioritize markets with harmonized regulatory frameworks
  • Develop template compliance systems that scale across similar jurisdictions
  • Build regulatory expertise as proprietary asset rather than outsourcing to external counsel

Challenge 3: Trust and Market Legitimacy

The Trust Paradox: Crowdfunding requires retail investors to provide capital to unknown entities, creating inherent trust deficits that regulation can either exacerbate or resolve.

The French Market Creation Model: De Maupeou's case study demonstrates how targeted regulation can create entire markets while building systematic trust.

Trust-Building Framework:

  • Embrace regulation as market validation mechanism
  • Communicate regulatory compliance as investor protection, not platform burden
  • Leverage regulatory milestones (licensing, approvals) as marketing assets

Challenge 4: Technology Integration and AI Compliance

The Automation Imperative: Manual compliance processes create unsustainable cost structures as platforms scale. Leading operators are implementing AI-driven solutions across due diligence, fraud detection, and investor relations.

Current Implementation Status: Wenzlaff reports widespread adoption, while Cox identifies critical risks including AI-generated fraudulent entities.

Technology Strategy:

  • Implement AI for operational efficiency while maintaining human oversight for novel risks
  • Build proprietary compliance technology as competitive moat
  • Prepare for AI-specific regulations (EU AI Act) before mandatory compliance

Challenge 5: Regulatory Philosophy Alignment

The Philosophical Divide: Different regulatory approaches create varying competitive dynamics across markets.

US Model: Kassan describes the principle-based approach with disclosure flexibility but enforcement risk.

EU Model: Highly prescriptive with detailed templates, as Wenzlaff noted regarding extensive guidance documents.

UK Evolution: Davis reports a pendulum swing back toward principles-based oversight to enable innovation.

Strategic Positioning:

  • Align platform architecture with dominant regulatory philosophy in target markets
  • Build flexibility to adapt as regulatory approaches evolve
  • Influence regulatory development through industry association participation

Strategic Implementation Considerations

While the roundtable discussion focused primarily on current market dynamics and regulatory challenges, the insights suggest potential areas for platforms to consider when seeking to transform compliance from cost center to competitive advantage:

Foundation Areas

  • Compliance Assessment: Evaluating current regulatory positioning across target markets
  • Cost-Benefit Analysis: Understanding compliance investment versus enforcement risk exposure, following Cox's "when you pay, not if you pay" principle
  • Technology Infrastructure: Considering AI-powered compliance monitoring while building on lessons from European platform experiences
  • Organizational Alignment: Educating leadership on compliance-as-advantage positioning, drawing from examples like France's market creation model

Competitive Differentiation Considerations

  • Value Proposition Integration: Exploring how regulatory track record might enhance platform positioning for issuers and investors
  • Process Enhancement: Evaluating machine learning applications for routine compliance tasks while maintaining human oversight for novel risks
  • Cross-Border Strategy: Assessing opportunities in harmonized regulatory environments, particularly building on ECSPR framework benefits
  • Industry Participation: Engaging in regulatory development through trade associations and collaborative initiatives

Strategic Positioning Elements

  • Regulatory Innovation: Building relationships with regulators and participating in sandbox programs
  • Ecosystem Development: Considering how compliance expertise might create value for industry partners
  • International Expansion: Leveraging regulatory competency for scaling, particularly as more markets adopt harmonized frameworks
  • Strategic Partnerships: Evaluating platforms with complementary regulatory assets and market access

Note: These represent strategic considerations based on panel insights rather than prescribed implementation steps. Each platform's approach would depend on their specific market position, regulatory environment, and strategic objectives.

Industry Catalyst: The London Stock Exchange Entry

Bruce Davis's announcement carries profound strategic implications: "We've just seen the London Stock Exchange, which is probably one of the second oldest stock exchange, become a crowdfunder this week. So it has acquired a permission, a PISCES permission."

This development signals institutional validation that transforms crowdfunding from alternative finance to mainstream capital markets infrastructure. The strategic implications include:

  • Competitive Pressure: Traditional financial institutions will bring substantial compliance infrastructure and regulatory relationships
  • Market Expansion: Institutional credibility will attract larger issuers and investor segments previously skeptical of crowdfunding
  • Regulatory Evolution: Increased institutional participation will likely accelerate regulatory standardization and professionalization

GECA's Potential Collaborative Framework: Areas for Working Group Consideration

These represent preliminary concepts for GECA working groups to explore, not detailed frameworks or adopted policy.

As the neutral alliance of crowdfunding stakeholders, GECA could potentially facilitate industry-wide collaboration through voluntary standards development. The following areas emerged from panel discussions as potential focus points for working group consideration:

Standards Development Areas

  • Disclosure Standards: Exploring voluntary guidelines for consistent placement and accessibility of key investor information
  • Cross-Border Coordination: Developing shared terminology and mapping between regulatory frameworks to reduce legal uncertainty
  • Industry Metrics: Establishing common definitions for measuring trust, compliance costs, and cross-border efficiency
  • AI Governance Principles: Creating guidance for responsible AI implementation in compliance processes

Collaboration Mechanisms

  • Regular Industry Dialogue: Facilitating safe harbor discussions on regulatory interpretation challenges
  • Association Coordination: Building relationships with sister organizations for aligned advocacy
  • Regulator Engagement: Creating structured dialogue opportunities on harmonization priorities
  • Best Practice Sharing: Enabling platforms to share compliance innovations and lessons learned

Voluntary Adoption Framework

Any GECA initiatives would operate through:

  • Consensus Building: Standards developed through inclusive working group processes
  • Voluntary Participation: No mandates, only collaborative frameworks for willing adopters
  • Regulatory Neutrality: Portable standards that complement rather than compete with local regulations
  • Evidence-Based Approach: Focus on measurable outcomes that benefit all stakeholders

Note: These concepts require extensive working group development and stakeholder input before any formal frameworks could be proposed.

Risk Mitigation Considerations

Regulatory Capture Risk

Risk: Over-compliance creating barriers to innovation Mitigation: Maintain balance between compliance leadership and product innovation through dedicated R&D investment

Technology Dependence Risk

Risk: AI systems creating new compliance vulnerabilities Mitigation: Implement human oversight protocols and regular model auditing procedures

Market Concentration Risk

Risk: Regulatory harmonization benefiting only largest platforms Mitigation: Build frameworks that scale efficiently across platform sizes through collaborative models

Conclusion: Toward Industry-Led Evolution

The evidence from leading global practitioners presents a clear strategic direction: regulatory compliance has evolved from operational necessity to sustainable competitive advantage. As Davis summarized the mindset shift: "Compliance is only a problem when people don't want to do it."

The convergence of institutional entry (LSE's private market permissions), technological advancement (AI-powered compliance), and regulatory harmonization (ECSPR expansion) creates unprecedented opportunity for strategically positioned platforms and collaborative industry initiatives.

GECA's role as neutral convener positions the alliance to facilitate the working groups and collaborative frameworks that could accelerate this transformation—not through technology development, but through the standards, partnerships, and advocacy that enable truly borderless crowdfunding.

The question facing the industry isn't whether to invest in compliance capability, but how quickly to build collaborative frameworks that benefit all stakeholders before competitive windows close. Through voluntary standards, shared learning, and coordinated advocacy, the crowdfunding industry can transform regulatory compliance from fragmented cost burden into the foundation for global growth.

This analysis synthesizes insights from GECA's "Architects of Change" roundtable series. The strategic frameworks presented are suggestions for working group consideration rather than adopted GECA policy. Watch the complete discussion here and join GECA's mission toward borderless crowdfunding at thegeca.org.

by GECA

Cracking the Passporting Code: Why Principle-Based Supervision Could Unlock Global Crowdfunding

Analysis of GECA's Architects of Change 2025 roundtable: "Beyond Borders: Global Crowdfunding Passports - EU ECSPR Lessons Learnt"

Introduction

The promise of financial passporting -allowing licensed platforms to operate seamlessly across multiple jurisdictions - has captivated the equity crowdfunding industry since the European Union's ECSPR created the world's first large-scale implementation. Yet as practitioners from Europe, North America, and India gathered for GECA's second Architects of Change roundtable, a more nuanced picture emerged. The discussion, moderated by Karsten Wenzlaff - one of the principal architects of the ECSPR framework - revealed that passporting success depends less on regulatory alignment and more on solving practical operational challenges that persist even within harmonized systems.

The urgency for global passporting solutions has intensified as financial systems become increasingly interconnected. The globalization of financing refers to the increased integration of national financial systems into international financial markets, characterized by greater cross-border capital flows, more diverse financial products, and the interconnectedness of financial institutions worldwide. This globalization brings potential benefits, such as more efficient capital allocation, higher returns for investors, increased competition, enhanced funding for innovation, and accelerated economic development across markets. However, realizing these benefits requires effective international regulatory cooperation to manage cross-border coordination challenges.

For equity crowdfunding, this global integration creates both opportunity and imperative. Investors increasingly expect access to worldwide opportunities, while entrepreneurs need capital sources that transcend domestic limitations. The conversation brought together three distinct perspectives: Benoit COLLAS from Enerfip Group, who has lived through the reality of ECSPR implementation; Aaron Shafton from DealMaker Securities, navigating the complex US-Canada relationship; and Honish Zaveri from Kiani Ventures, operating within India's evolving regulatory landscape. Their experiences illuminate why passporting represents both the industry's greatest opportunity and its most persistent challenge.

The ECSPR Reality Check: Harmonization Meets Operational Friction

Wenzlaff opened the discussion by acknowledging that passporting has gained "a lot of attention recently," driven partly by the ECSPR's theoretical promise of allowing platforms "to be licensed in one country and then offer to issuers to reach out to investors all across the European Union." The reality, as Collas revealed, proves far more complex.

"Even if we have this nice paper saying everything is the same in the 20 plus countries of Europe, you really need to continue to check what is here in each country," Collas explained, describing Enerfip's expansion journey. The platform spent six months obtaining ECSPR licensing, expecting "with this harmonization to get everything easy, one process for Spain, France, Netherlands, whatever." Instead, they discovered that "as soon as we really started operating in Spain, it's totally different."

This disconnect between regulatory theory and operational practice represents the first major insight from the passporting experiment. Legal harmonization creates the framework for cross-border operations but doesn't eliminate the practical barriers that make such operations complex and costly.

Collas identified taxation as the most persistent barrier: "Each country remains with this initial regulation for taxation, and even with a nice crowdfunding agreement, nothing changed so far. People can invest everywhere, but us as a crowdfunding provider, we definitely need to educate them about boring tax documents that you need to fulfill."

The taxation challenge illustrates a fundamental limitation of regulatory passporting: it operates at the securities regulation level but cannot address the broader ecosystem of laws that affect cross-border investment. Even within the world's most advanced passporting system, investors must navigate different tax treatments, documentation requirements, and reporting obligations for each jurisdiction.

Wenzlaff's Strategic Framework: From Regulatory Alignment to Principle-Based Supervision

Drawing on his experience architecting the ECSPR, Wenzlaff introduced a critical distinction that reframes the passporting debate. Rather than pursuing identical regulatory requirements across jurisdictions, he proposed "principle-based supervision" as a more pragmatic path forward.

"You might not have the same licensing requirements, but you would have a memorandum of understanding between two jurisdictions saying the licensing requirement for crowdfunding platform A is essentially the same as the licensing requirement in crowdfunding platform B," Wenzlaff explained. This approach acknowledges that perfect regulatory alignment may be neither necessary nor achievable.

The principle-based supervision model offers several strategic advantages:

  1. Speed to Market: Bilateral agreements could enable cross-border operations faster than comprehensive multilateral frameworks.

  2. Regulatory Sovereignty: Jurisdictions maintain control over local variations while recognizing core competencies.

  3. Practical Focus: Emphasis shifts from perfect harmonization to functional equivalence.

  4. Incremental Progress: Success between compatible jurisdictions creates templates for broader adoption.

Wenzlaff's insight challenges the prevailing assumption that passporting requires comprehensive regulatory harmonization. Instead, it suggests that mutual recognition based on shared principles could unlock many of the same benefits with lower political and practical barriers.

The North American Lesson: Why Geographic Proximity Doesn't Guarantee Compatibility

Shafton's perspective from North America provided perhaps the most compelling evidence that passporting challenges extend far beyond regulatory technicalities. Despite cultural similarities, extensive economic integration, and the transformative success of the US JOBS Act, cross-border crowdfunding between the US and Canada remains "shockingly complicated."

"You can have Canadian companies listed on US stock exchanges that find it difficult to do US retail offerings" Shafton observed, highlighting a fundamental paradox: traditional capital markets integration doesn't automatically translate to crowdfunding accessibility. This observation carries profound implications for global passporting ambitions, suggesting that even highly compatible jurisdictions face substantial barriers.

Shafton articulated the philosophical divide that underlies operational complexity: "There is a bit of a different, almost philosophical perspective in the US versus Europe on the way we think about securities regulations." He explained how this manifests practically: "The outcome of that is that disclosures, requirements, formats are often like highly specific in nature, and the consequence of veering from that standard could be quite severe."

This insight illuminates why technical compliance alignment must be accompanied by philosophical alignment about regulatory approach and enforcement. The North American experience reveals several persistent passporting challenges:

Documentation Fragmentation: "Even the accounting standards for the same company could be different" between the US and Canada, Shafton noted. Investors face "different forms to fill out from one province to another to invest in ultimately the same offering." This fragmentation creates operational friction that persists despite shared economic frameworks.

Enforcement Philosophy Divergence: The difference between prescriptive European regulation and principles-based North American approaches creates uncertainty about compliance requirements and enforcement priorities, making cross-border operations risky even when technically permissible.

Jurisdictional Complexity: Within Canada alone, provincial regulations create additional layers of complexity. "The formats can be wildly different," Shafton explained, describing how "all of these things are all tiny cuts that add up to the ultimate injury."

Shafton's analysis revealed the human cost of regulatory fragmentation: "An issuer without tons of resources and like a really driven mission isn't going to conduct a cross-border offering." This observation highlights how regulatory complexity doesn't just create operational inefficiency - it systematically excludes smaller companies from accessing international capital.

However, Shafton also provided the strategic rationale for solving these challenges:

"At the end of the day, a founder who's committed to raising capital from a community, from building a following, they're gonna be mostly agnostic to where that following comes from."

This insight captures the fundamental demand driving passporting development: entrepreneurs need capital and investors seek opportunities, regardless of arbitrary geographic boundaries.

Shafton's perspective on standardization offered perhaps the most compelling argument for passporting development: "What the average investor, I believe, is looking for is probably pretty much identical between those two parties. Standardization, simplification, centralization like that is better for all parties. It reduces the burden on founders. It makes it more consistent for an investor to learn."

This analysis suggests that the benefits of harmonization extend beyond operational efficiency to fundamental improvements in user experience and market access. As Shafton concluded:

"I hope we are trending on a global level to a standardized system. I think it benefits every single party along the way."

The North American experience provides crucial lessons for global passporting development:

Philosophical Alignment: Technical regulatory compatibility must be accompanied by alignment in regulatory philosophy and enforcement approach.

Incremental Approach: Even between highly compatible jurisdictions, comprehensive harmonization faces substantial obstacles. Success may require incremental progress through specific use cases.

User Experience Focus: The ultimate justification for passporting lies not in regulatory efficiency but in improved experiences for entrepreneurs and investors.

Resource Requirements: Current complexity systematically excludes smaller players, suggesting that passporting could democratize access to international capital markets.

India's Regulatory Evolution: The Passporting Prerequisite Challenge

Zaveri's insights from India revealed a different passporting challenge: how to build cross-border frameworks when domestic frameworks remain underdeveloped. India lacks explicit equity crowdfunding regulation, operating instead through angel fund structures with high minimum investments around ₹2 lakh ($3,000).

More concerning for passporting advocates, Zaveri noted that Indian regulators are "going in the reverse direction" by implementing US-style accredited investor requirements. This shift creates particular challenges in the Indian context:

"Unfortunately, in India, there are very few accredited investors. Not many people actually want to do that because they don't want to disclose their financial information."

The Indian experience illuminates a prerequisite for successful passporting: domestic regulatory frameworks must achieve sufficient maturity and stability before international harmonization becomes viable. Attempting to build passporting agreements with jurisdictions undergoing regulatory contraction could undermine both domestic development and international cooperation.

However, Zaveri's successful investment in US startups through platforms like AngelList demonstrates that individual cross-border participation is possible even without formal passporting agreements. This suggests that market demand for global access exists and could drive regulatory evolution if properly channeled.

The Platform Collaboration Conundrum: Why Business Models Matter More Than Regulations

One of the discussion's most revealing insights emerged from Collas's frank assessment of platform collaboration attempts. Despite regulatory frameworks that theoretically enable cooperation, most collaboration efforts fail due to business model conflicts rather than regulatory barriers.

"The real issue at the end is a fee split between platforms," Collas revealed. "We were fighting and spending so much time on this question - oh, I'm doing the sourcing, I'm working more than you - we spend so much time negotiating for tiny amounts because everyone wanted to show what they were doing."

This insight fundamentally challenges passporting assumptions. Even within harmonized regulatory environments, platforms struggle to collaborate because current business models assume competition rather than cooperation. The few successful collaborations emerged from "unexpected frameworks" that bypassed traditional revenue-sharing entirely.

Wenzlaff recognized this as a critical gap in current passporting approaches: "Maybe what we would need is simply as a first step, a framework which makes platform collaborations easier." This observation suggests that regulatory passporting alone is insufficient - the industry needs collaboration frameworks that address business model alignment alongside regulatory compliance.

The platform collaboration challenge reveals a deeper structural issue: regulatory frameworks designed to protect individual market integrity may inadvertently hinder the cooperation necessary for global market integration. Successful passporting may require regulatory approaches that explicitly facilitate rather than merely permit cross-border collaboration.

The KYC Interoperability Problem: Where Principles Meet Practice

Wenzlaff identified Know Your Customer (KYC) requirements as a particularly intractable challenge for passporting implementation. "Even though they all use the same harmonized legal framework, there's still quite some differences in what they actually do, what kind of information they're being asked for," he observed from European experience.

Zaveri confirmed this challenge from the Indian perspective:

"Those KYC requirements are not globally inter-interoperable. It's difficult. It requires certain documents and all that - it's difficult."

The KYC challenge illustrates why principle-based supervision may be more complex than initially apparent. While the principle of investor verification remains consistent across jurisdictions, implementation varies significantly in terms of required documentation, verification methods, data retention requirements, and privacy protections.

This variation creates redundant verification processes that increase both friction and operational costs for cross-border operations. More importantly, it suggests that even principle-based passporting approaches may require more detailed coordination than regulatory frameworks typically provide.

Wenzlaff proposed a potential solution:

"You don't prescribe a specific KYC requirement or a specific onboarding requirement, but you just say you want to have certain principles which are found in the regulation."

This approach could enable KYC mutual recognition while preserving jurisdictional flexibility in implementation methods.

Market Demand Drives Innovation: Strong Fundamentals Support Optimism

The panel discussion revealed compelling evidence of genuine market demand that provides the economic foundation for passporting development. Shafton's observations about North American markets illustrate this clearly:

"There's no shortage of issuers we've spoken to - both local North American companies who want to expand internationally or who already have an international community or customer base, and they want to include them in a crowdfunding effort."

This demand isn't theoretical - it reflects real business needs from companies that already operate internationally but face artificial barriers accessing their global communities through crowdfunding platforms. As Shafton noted, "The US is obviously a huge market for retail investors and there are lots of foreign companies who are expanding their businesses in the US. Sometimes they go and list on US stock exchanges. They want that same approach when they're doing these crowdfunding offerings."

The investor appetite is equally strong. Wenzlaff's scenario of "citizens who are maybe residents in Sweden and they would like to invest into a renewable energy project based in Uganda" captures this demand, but Zaveri's personal experience provides concrete validation. His successful investment in a US startup through AngelList - which later achieved unicorn status - demonstrates that cross-border investment not only works but can generate substantial returns.

Regional Momentum Building Globally: The discussion revealed that passporting development isn't limited to Europe but happening simultaneously across multiple regions. Wenzlaff noted that:

"in Africa, the African FinTech Network recently hosted a panel as well on how passporting for FinTech licenses can be made possible. Several legislators in Asia are also talking about this, recognizing each other's licenses."

Zaveri confirmed this with specific examples: "Especially in the ASEAN region, if there are syndicates, they do collaborate because they have similar kinds of regulations and principles." This suggests that regional harmonization may provide stepping stones to global frameworks, with multiple pathways developing simultaneously rather than waiting for comprehensive global agreements.

Technology Infrastructure Ready: While technology alone can't solve regulatory barriers, the infrastructure exists to support sophisticated cross-border compliance and KYC sharing. The discussion revealed that operational challenges like document sharing, language translation, and verification processes are technically solvable -the barriers are regulatory and business model related, not technological.

Climate Investment Catalyst: The renewable energy sector provides a politically supported catalyst for regulatory cooperation that transcends pure market efficiency arguments. Climate investment enjoys broad political backing, creating urgency around infrastructure investment timelines that could accelerate regulatory solutions. As Collas's experience with renewable energy crowdfunding demonstrates, investor appetite for international climate projects already exists - regulatory frameworks just need to catch up.

The discussion revealed that regional harmonization may offer a more viable pathway to global passporting than comprehensive multilateral approaches.

This observation suggests that geographic and cultural proximity may facilitate the trust and institutional alignment necessary for effective passporting. Rather than pursuing global agreements immediately, the industry might achieve more success through regional clusters that can eventually interconnect.

Wenzlaff's historical perspective supports this approach. He noted that both US and European crowdfunding harmonization "everything was quite fast" when there was political alignment and industry consensus. "If politicians see the need to collaborate and recognize each other's licenses, it can happen if there is a big push from society about it."

The regional pathway offers several advantages:

  • Cultural Compatibility: Shared values and institutional approaches reduce friction

  • Political Feasibility: Regional agreements typically face fewer sovereignty concerns

  • Economic Integration: Existing trade relationships provide frameworks for regulatory cooperation

  • Success Demonstration: Regional success creates templates for broader application

The Infrastructure Investment Driver: Climate Finance as Passporting Catalyst

Wenzlaff identified a compelling use case that could accelerate passporting development: cross-border climate investment. "We have citizens who are maybe residents in Sweden and they would like to invest into a renewable energy project based in Uganda," he explained.

This scenario illustrates why passporting represents more than regulatory convenience - it's becoming essential for addressing global investment challenges that transcend national boundaries. The scale of required infrastructure investment, particularly for climate transition, may create political pressure for regulatory cooperation that purely market-driven arguments cannot achieve.

Collas's experience with renewable energy crowdfunding supports this thesis. Despite operational complexity, Enerfip's cross-border expansion demonstrates market demand for international impact investment opportunities. The platform's persistence through regulatory challenges suggests that underlying investor appetite justifies the coordination costs.

The climate investment driver could provide several strategic advantages for passporting advocates:

  • Political Support: Climate investment typically enjoys broad political backing

  • Urgency: Infrastructure investment timelines create pressure for regulatory solutions

  • Demonstration Value: Success in climate investment could prove broader passporting benefits

  • Scale Requirements: Global infrastructure needs exceed individual market capacity

Technology's Role: Enabler, Not Solution

While technology received limited explicit discussion, the insights suggest an important distinction between technological capability and regulatory permission. Current technology could theoretically enable seamless cross-border investment experiences, but regulatory frameworks remain the binding constraint.

This observation challenges technology-first approaches to crowdfunding innovation. Blockchain, AI, and tokenization may improve operational efficiency, but they cannot address the fundamental regulatory fragmentation that constrains global market development.

The most promising technological applications appear to support regulatory compliance rather than circumvent it. For example, blockchain-based KYC data sharing protocols could enable mutual recognition while maintaining privacy protections and audit trails.

Wenzlaff's principle-based supervision approach could particularly benefit from technological infrastructure that enables secure, privacy-compliant sharing of verification data across jurisdictions while allowing local implementation flexibility.

Market Timing and Strategic Windows

The discussion revealed interesting perspectives on the timeline for global passporting implementation. Collas suggested that comprehensive global harmonization "will be more 20 years," while acknowledging ongoing work on specific collaborations that could succeed within "three months."

This timeline disparity highlights the difference between comprehensive passporting and incremental progress through bilateral agreements and platform collaborations. While perfect global harmonization may indeed require decades, practical improvements in cross-border access could emerge much sooner through targeted initiatives.

Wenzlaff's emphasis on political momentum suggests that timing depends heavily on external factors beyond industry control. "If a lot of investors would say, 'Hey, we would like to support the climate transition in the global south,' that would mean that maybe these kinds of frameworks would emerge eventually."

The timing consideration has strategic implications for industry participants:

  • First-Mover Advantages: Early success in cross-border operations could create significant competitive moats

  • Investment Priorities: Long timeline for comprehensive harmonization suggests focus on incremental improvements

  • Political Engagement: Industry advocacy becomes crucial for accelerating regulatory cooperation

  • Implications for GECA's Strategy

The roundtable discussion offers several strategic insights for GECA's mission of promoting global crowdfunding harmonization:

Focus on Practical Barriers: Regulatory alignment alone won't solve passporting challenges - operational issues like taxation and KYC interoperability require equal attention.

  • Facilitate Platform Collaboration: Business model alignment may be as important as regulatory compliance for successful cross-border operations.

  • Promote Principle-Based Recognition: Perfect harmonization may be neither necessary nor achievable - functional equivalence through mutual recognition offers a more pragmatic path.

  • Leverage Climate Investment: Renewable energy and infrastructure investment provide compelling use cases for regulatory cooperation.

  • Build Regional Clusters: Geographic and cultural proximity may facilitate trust-building necessary for effective passporting.

  • Address Regulatory Philosophy: Technical compliance alignment must be accompanied by philosophical alignment about regulatory approach and enforcement.

The Passporting Paradox Resolved

The discussion reveals a fundamental paradox in passporting development: the most advanced harmonization efforts create frameworks that highlight rather than eliminate the practical barriers to cross-border operations. The ECSPR experience demonstrates both the possibility and the limitations of regulatory coordination.

However, this paradox points toward resolution through Wenzlaff's principle-based supervision approach. Rather than pursuing perfect harmonization, the industry can achieve many passporting benefits through mutual recognition frameworks that acknowledge both shared principles and local variations.

Success requires addressing three interconnected challenges:

  1. Regulatory Recognition: Developing mutual recognition frameworks based on shared principles rather than identical requirements

  2. Operational Harmonization: Solving practical barriers like taxation and KYC that persist even within harmonized regulatory frameworks

  3. Business Model Alignment: Creating collaboration frameworks that enable platform cooperation rather than just regulatory compliance

Conclusion: The Path Forward

The second GECA roundtable demonstrates that global crowdfunding passporting remains both necessary and achievable, but requires a more nuanced approach than simple regulatory harmonization. Wenzlaff's insights, drawn from direct experience architecting the world's most successful passporting system, provide a roadmap for practical progress.

The path forward involves building on existing successes while addressing revealed limitations. The ECSPR framework provides proof of concept for large-scale regulatory coordination, while North American and Indian experiences highlight both challenges and opportunities in different institutional contexts.

Most importantly, the discussion reveals that passporting success depends on industry participants actively shaping regulatory development rather than simply advocating for it. As Wenzlaff noted, rapid progress occurs "if politicians see the need to collaborate and recognize each other's licenses" driven by societal demand.

The climate investment imperative may provide the catalytic pressure necessary to accelerate this development. Global infrastructure investment needs transcend individual market capacity and create compelling use cases for regulatory cooperation that purely market-efficiency arguments cannot achieve.

For GECA and its members, the challenge is translating these insights into coordinated action that addresses both regulatory and operational barriers while building the political momentum necessary for meaningful progress. The conversation continues, but the foundation for practical advancement is clear.

Ready to explore the full discussion? Watch the complete Architects of Change panel where industry leaders examine the future of global equity crowdfunding: Breaking Down Borders - Full Discussion

Join the movement for borderless investment. GECA brings together platforms, regulators, and industry stakeholders to advance global equity crowdfunding. Learn more about membership opportunities and help shape the industry's future: thegeca.org/membership-app-form

by GECA

Breaking Down Borders: The Strategic Imperatives for Global Equity Crowdfunding

Industry Leaders Chart the Path to Borderless Capital Markets Through Cross-Platform Collaboration and Technological Innovation

The equity crowdfunding industry stands at a critical inflection point. While regulatory frameworks have matured and technological capabilities have advanced, the promise of truly global capital access remains largely unrealized. A recent GECA Architects of Change panel discussion brought together platform leaders from three continents to examine why cross-border investment remains constrained and what strategic interventions could unlock borderless capital flow.

The findings reveal both the scope of untapped opportunity and the complexity of barriers preventing its realization. More significantly, they point toward a coordinated path forward that could transform equity crowdfunding from a collection of national markets into an integrated global ecosystem.

The Scale of Market Fragmentation

The numbers define the challenge with stark clarity. In the United States, over 90 FINRA-regulated portals exist, yet only 10-20 actively facilitate meaningful capital raises. Europe presents an even more fragmented picture: despite the European Crowdfunding Service Providers Regulation creating unified licensing, over 200 ECSP-licensed platforms operate with limited cross-border activity.

This fragmentation extends beyond platform proliferation to fundamental market access inequities. Less than 1% of global investors qualify as accredited under current frameworks -a dramatic constraint compared to 3-9% in the United States alone. The implications are profound: vast pools of capital remain disconnected from promising entrepreneurial opportunities simply due to jurisdictional boundaries.

Eric A Cox II, COO of Netcapital, articulated the global opportunity: "If we talk about accredited investors, that's only three to nine percent of the United States. But globally it's less than 1% of investors globally are accredited. We really need to think more than just the United States investor, but the global investor participating in these deals."

Regulatory Architecture: Barriers Disguised as Protection

The panel revealed how regulatory frameworks, designed to protect investors, have inadvertently created systematic barriers to capital formation. The U.S. Regulation Crowdfunding (Reg CF) framework restricts offerings to domestic entities, effectively excluding international companies from America's largest retail investment market. European platforms, while benefiting from passport arrangements, face language requirements and local approval processes that create friction for truly pan-European campaigns.

These regulatory silos reflect a fundamental misalignment between global capital needs and national regulatory approaches. Jānis Blaževičs, CEO of CrowdedHero observed the practical implications: "You cannot target the German market once you haven't received approval from Bafin. There are some specifics on marketing, and I think it's more related to MiFID."

The fragmentation extends to operational infrastructure. Each platform requires separate KYC procedures, creating abandonment points for international investors. Payment processing limitations add additional layers of complexity, with currency conversion fees and settlement delays making small international investments economically unviable.

The Technology-Trust Paradox

Perhaps most striking was the panel's discussion of how technology could simultaneously solve and complicate cross-border investment. Blockchain technology offers compelling solutions for attribution, settlement, and compliance automation. Several European countries -including Germany, Luxembourg, and France - already approve distributed ledger technology for shareholder registries, providing regulatory precedent for broader adoption.

Yet implementation reveals nuanced challenges. Jason Fishman, CEO of Digital Niche Agency (DNA), highlighted the communication imperative: "The end audience, the perspective investor, needs to not only understand the company, the team, the deal - they have to be able to market it themselves. These are crowd campaigns; you're playing for the crowd effect."

This insight reveals a fundamental tension: while sophisticated technology can eliminate operational barriers, it must remain accessible to retail investors who drive crowdfunding success. The solution requires not just technical innovation but communication design that enables investor advocacy.

Secondary Market Liquidity: The Critical Infrastructure Gap

All panelists identified liquidity as the primary barrier preventing mainstream adoption of equity crowdfunding. The absence of viable exit mechanisms creates a structural disincentive for investor participation, particularly for international investments where due diligence and legal recourse may be more complex.

Cox outlined Netcapital's approach to this challenge: "We know that the true value for the investor would come from selling those shares. Companies are staying private longer, if not forever. So one thing that we've really always built our technology around was the ability to do the primary offering and then list those shares for trade on secondaries."

The secondary market opportunity extends beyond individual investor needs to industry sustainability. Platforms that can offer liquidity mechanisms will likely capture disproportionate market share as investors migrate toward more complete investment experiences.

Platform Collaboration: From Competition to Ecosystem Growth

The discussion revealed a sophisticated understanding of industry dynamics that transcends traditional competitive thinking. Rather than viewing other platforms as competitors for a fixed pool of capital, leading operators recognize that market expansion requires collaborative approaches.

Konstantin Boyko CEO of LenderKit, moderating the discussion, captured this strategic shift: "You need to collaborate. You need to share and grow the industry together because otherwise you are just competing for a small pie rather than making it bigger and then having the share."

This collaborative mindset creates opportunities for revenue-sharing arrangements, cross-platform deal syndication, and shared infrastructure development. The regulatory framework already supports such arrangements under Reg D in the United States, where multiple broker-dealers can collaborate on single offerings.

Market Education: The Awareness Imperative

Despite technological capabilities and regulatory frameworks, awareness remains a fundamental constraint. Fishman's observation that he has "had to explain to people roughly every day what equity crowdfunding is" since 2016 illustrates the education challenge facing the industry.

This awareness gap extends beyond retail investors to entrepreneurs and intermediaries who could benefit from crowdfunding but remain unfamiliar with available options. The education requirement spans multiple constituencies: entrepreneurs who could benefit from crowdfunding, retail investors who could access new asset classes, and institutions who could provide validation and scale.

The panel identified coordinated industry advocacy as essential for addressing awareness limitations. Building relationships with media, lobbying for supportive government partnerships, and creating educational resources require resources and coordination that exceed individual platform capabilities.

Strategic Implications: The Path to Global Integration

The panel discussion illuminates five strategic imperatives for achieving borderless equity crowdfunding:

Regulatory Harmonization Through Mutual Recognition: Rather than pursuing unified global regulation, the industry should advocate for bilateral mutual recognition agreements between compatible jurisdictions. This approach preserves local regulatory authority while enabling cross-border capital flow.

Technology Infrastructure That Enables Rather Than Complicates: Blockchain and digital identity solutions must prioritize accessibility and interoperability over technical sophistication. The goal is invisible infrastructure that eliminates friction without creating new barriers.

Secondary Market Development as Competitive Differentiation: Platforms that successfully implement liquidity mechanisms will capture disproportionate market share. This represents both opportunity and competitive imperative for industry participants.

Collaborative Revenue Models That Expand Market Size: Revenue-sharing arrangements for cross-platform deals can grow total industry volume while maintaining individual platform profitability. This requires sophisticated attribution systems but offers substantial upside potential.

Coordinated Market Education to Drive Mainstream Adoption: Individual platforms cannot efficiently address awareness gaps. Industry-wide education initiatives, potentially coordinated through organizations like GECA, offer better resource utilization and consistent messaging.

The Competitive Dynamics of Global Expansion

The transition to borderless crowdfunding will create both opportunities and risks for existing platforms. Early movers who successfully navigate international expansion will establish network effects and brand recognition that create sustainable competitive advantages. However, the complexity of cross-border operations may overwhelm platforms that lack sufficient scale or expertise.

This dynamic suggests potential industry consolidation, with successful global platforms acquiring or partnering with specialized local providers. The optimal industry structure likely resembles a federation: major platforms providing infrastructure and compliance capabilities while local partners contribute deal flow and cultural expertise.

Timing and Market Readiness

Several factors suggest the industry may be approaching a tipping point for global integration. Regulatory frameworks have stabilized in major markets, providing predictable operating environments. Blockchain infrastructure has matured sufficiently to support practical applications rather than experimental implementations. Most importantly, demographic trends favor adoption: millennial and Gen Z investors demonstrate greater comfort with digital platforms, alternative investments, and global thinking.

The panel's discussion suggests that platforms implementing cross-border capabilities today are positioning themselves for substantial growth as these trends accelerate. Conversely, platforms that remain domestically focused risk marginalization as more globally-oriented competitors capture the most engaged investors and highest-quality deal flow.

Conclusion: The Strategic Moment

The GECA panel discussion reveals an industry at a strategic inflection point. The technical capabilities, regulatory frameworks, and market infrastructure necessary for borderless equity crowdfunding largely exist. What remains is coordinated execution by industry leaders committed to moving beyond national market limitations.

The opportunity is substantial: democratized access to early-stage investment opportunities, optimized global capital allocation, and expansion of the investor class to include millions who currently lack access to private markets. The path forward requires collaboration rather than competition, patient capital rather than quick returns, and strategic vision rather than tactical optimization.

The platforms and leaders who recognize this moment and act decisively will shape the industry's evolution. Those who remain committed to domestic market strategies risk irrelevance in an increasingly connected global economy. The choice is clear, even if execution remains complex.

The future of equity crowdfunding will be global or it will be diminished. The strategic question is not whether borderless investment will emerge, but which stakeholders will lead its development and capture its value.

Ready to explore the full discussion? Watch the complete Architects of Change panel where industry leaders examine the future of global equity crowdfunding: Breaking Down Borders - Full Discussion

Join the movement for borderless investment. GECA brings together platforms, regulators, and industry stakeholders to advance global equity crowdfunding. Learn more about membership opportunities and help shape the industry's future: thegeca.org/membership-app-form

This analysis is based on GECA's Architects of Change panel discussion featuring Eric Cox (Netcapital), Jānis Blaževičs (CrowdedHero), Jason Fishman (DNA Marketing), and Konstantin Boyko (LenderKit), examining cross-border collaboration in equity crowdfunding.

by GECA

GECA Appoints European Crowdfunding Regulatory Expert Florence de Maupeou to Steering Committee

by GECA

GECA Welcomes Florence de Maupeou: European Crowdfunding Pioneer Brings Decade of Regulatory Expertise to Advance Borderless Investment Vision

France FinTech's Deputy General Manager for Institutional Relations & Crowdfunding joins steering committee to accelerate global harmonization efforts

The Global Equity Crowdfunding Alliance (GECA) is proud to announce that Florence de Maupeou has joined our steering committee as a strategic advisor. This appointment represents a significant milestone in GECA's mission to create truly borderless equity crowdfunding markets, bringing together one of Europe's most experienced crowdfunding advocates with our global vision for regulatory harmonization.

A Pioneer in European Crowdfunding Regulation

Florence de Maupeou's journey in crowdfunding began over a decade ago, positioning her as one of the industry's true pioneers. With a master's degree in Social and Solidarity Economy and sociology from a leading business school, she developed her deep understanding of financial inclusion through hands-on field experience across India and Latin America, studying the realities of microcredit as a tool for economic and social development.

In 2010, she entered the alternative finance space at Babyloan, Europe's first microcredit crowdfunding platform, where she served as Head of Institutional Relations. Under her direction in 2012, the Babyloan networks association was created to carry out advocacy, education, and awareness projects promoting social and solidarity economy principles alongside participatory financing, particularly in schools and colleges.

Her most transformative role began with Financement Participatif France (FPF), where she was involved from the association's very founding in 2012. Florence played a crucial role in developing the industry's code of ethics, serving as Secretary General in 2013, then Treasurer in 2014, before taking the permanent position of General Director in December 2014. Under her leadership, FPF grew to represent 150 members across the crowdfunding ecosystem, establishing France as the first country to promulgate dedicated crowdfunding regulations and helping facilitate over €9 billion in cumulative investment with annual flows exceeding €2 billion.

Andrew Field, Head of the GECA Steering Committee, commented: "Florence's decade-long leadership in building France's crowdfunding regulatory framework makes her an invaluable addition to our team. Her experience in harmonizing diverse stakeholder interests across 150+ platform members and her success in creating regulatory clarity that enabled billions in investment flows perfectly aligns with GECA's mission to achieve similar harmonization on a global scale."

Architect of French Crowdfunding Success

Florence's leadership at FPF coincided with crowdfunding's establishment as a major financing tool in France. Her strategic vision encompassed multiple critical areas:

Regulatory Advocacy: She coordinated lobbying efforts that positioned France at the forefront of European crowdfunding regulation, working directly with public authorities and regulators to create frameworks that balanced innovation with investor protection.

Industry Development: Through strategic planning, partnership development, and member coordination, she helped build an ecosystem that attracted international recognition and positioned French crowdfunding platforms for European expansion.

Industry Standards Development: Her foundational work in developing FPF's code of ethics established best practices that became industry standards, demonstrating her commitment to responsible innovation alongside market growth.

International Positioning: Her institutional relations work established France as a thought leader in European alternative finance discussions, setting the stage for broader harmonization efforts.

Strategic Merger: FPF and France FinTech Unite

In June 2024, Florence orchestrated a landmark strategic merger between FPF and France FinTech, creating the largest fintech association in Europe with over 350 members and 100 partners. This merger reflected her forward-thinking approach to industry evolution and her recognition that crowdfunding's future lies in broader fintech integration.

"For more than 10 years, FPF has supported crowdfunding players in their development and has been their voice with regulators and public authorities. The progress made is phenomenal, but today we need renewal and a broader sounding board," Florence explained during the merger announcement. "Because the subjects that we address are increasingly transversal with other fintech players, because the platforms are developing in various activities, because our issues are also becoming European, because the context is complicated and together we are stronger, the rapprochement of our two associations makes obvious sense today."

A Global Network for European Leadership

As Deputy General Manager for Institutional Relations & Crowdfunding at France FinTech, Florence now oversees regulatory strategy for an ecosystem that represents the full spectrum of financial innovation. Her role extends beyond France through her position as a Board Member of the European Digital Finance Association (EDFA), where she helps coordinate fintech policy across European markets.

This European perspective provides GECA with direct access to regulatory discussions, policy development processes, and harmonization efforts that span the continent's most sophisticated fintech markets. Florence's institutional relationships extend from the European Commission to national parliaments, providing GECA with invaluable insights into regulatory trends and opportunities for global coordination.

Expertise in Participatory Finance Evolution

Florence's experience spans the complete evolution of participatory finance, from early microcredit platforms to sophisticated equity crowdfunding ecosystems. Her expertise encompasses:

Reward crowdfunding: Understanding the keys to success for a reward or donation-based crowdfunding campaign, its democratic potential and its capacity for mobilization.

Crowdequity: Deep understanding of equity crowdfunding mechanics, regulatory requirements, and market development strategies.

Crowdlending: Comprehensive knowledge of peer-to-peer lending platforms, risk management frameworks, and regulatory compliance.

Real Estate Crowdfunding: Extensive experience in one of Europe's largest crowdfunding verticals, including investor protection and project evaluation.

Cross-Border Operations: Practical understanding of how platforms can operate across multiple jurisdictions while maintaining regulatory compliance.

Alignment with GECA's Mission

Florence's appointment comes at a crucial time as equity crowdfunding markets mature globally. Her experience in building consensus among diverse stakeholders while maintaining high standards aligns perfectly with GECA's approach to creating borderless investment opportunities.

"The future of crowdfunding is inherently global, but successful globalization requires the kind of regulatory expertise and institutional relationships that Florence possesses," noted Andrew Field, Head of GECA's steering committee. "Her proven ability to coordinate complex stakeholder groups and achieve regulatory clarity while fostering innovation makes her an ideal advisor as we work to harmonize standards across international markets."

Contributing to Global Harmonization

Florence's expertise will prove invaluable as GECA works to address key challenges in international crowdfunding:

Regulatory Coordination: Her experience in French and European regulatory development provides a proven blueprint for achieving consensus among diverse regulatory authorities.

Market Development: Her track record in building sustainable crowdfunding ecosystems offers practical insights for emerging markets seeking to develop their own frameworks.

Industry Standards: Her work in establishing best practices and ethical guidelines helps ensure that global harmonization maintains high standards for investor protection.

Cross-Border Innovation: Her understanding of how platforms can scale beyond domestic markets provides strategic guidance for GECA's borderless vision.

A Strategic Addition to GECA's Vision

With Florence's addition to the steering committee, GECA continues building the intellectual foundation needed to navigate complex international regulatory landscapes. Her appointment follows recent additions of other industry leaders, creating a steering committee with complementary expertise spanning regulatory design, market development, and global coordination.

"I'm honored to join GECA's steering committee at this transformative moment for global equity crowdfunding," Florence commented. "Throughout my career, I've seen how effective regulatory frameworks can unlock innovation while protecting investors. GECA's vision for borderless crowdfunding resonates deeply with the lessons we've learned in Europe about the power of harmonized standards and collaborative approaches to market development."

Building Tomorrow's Investment Infrastructure

As global crowdfunding markets continue evolving, Florence's expertise in regulatory strategy and institutional relations positions GECA to accelerate its mission of creating truly borderless investment opportunities. Her proven track record in building consensus, achieving regulatory clarity, and fostering sustainable market growth provides exactly the type of leadership needed to transform GECA's vision into reality.

The appointment of Florence de Maupeou signals that GECA is not just planning for the future of global crowdfunding - we're building it with the expertise and institutional relationships necessary to succeed.

About GECA

The Global Equity Crowdfunding Alliance (GECA) is an international organization dedicated to advancing regulatory harmonization, market development, and best practices in equity crowdfunding worldwide. Learn more at thegeca.org.

Contact: For media inquiries about GECA's steering committee appointments and global initiatives, please contact the steering committee at: contact@thegeca.org

Want to join GECA's mission? Visit thegeca.org/join to learn about supporter opportunities for platforms, service providers, and industry stakeholders.

by GECA

The Innovation Imperative: How Open Innovation Drives Global Economic Growth and Why Cross-Border Crowdfunding is Essential

How international collaboration in innovation financing is reshaping the global economy and driving sustainable development

In an era where global economic growth has slowed to just 2.6% - barely above the recession threshold - the role of innovation as an economic driver has never been more critical. Recent comprehensive research analyzing 120 countries reveals a compelling truth: nations that prioritize innovation experience significantly higher GDP growth, reduced necessity-driven self-employment, and enhanced economic prosperity. This evidence provides powerful validation for cross-border crowdfunding initiatives and the critical mission of organizations working to democratize global innovation financing.

The Economic Science Behind Innovation-Driven Growth

Quantifying Innovation's Economic Impact

Groundbreaking research by Dempere et al. (2023) examining 120 countries from 2013-2019 using the Global Innovation Index (GII) reveals striking correlations between innovation capacity and economic performance. The study found that every unit increase in a country's innovation score corresponded to GDP per capita increases ranging from $1,436 to $1,623 across the analyzed period.

This relationship extends beyond simple correlation. The research demonstrates that innovation inputs - including institutional frameworks, human capital, infrastructure, and market sophistication - directly translate to enhanced economic outputs. Countries investing in these innovation foundations consistently outperform those that don't.

The Global Innovation Dividend

The data tells a compelling story about innovation's role in economic development:

  • Infrastructure investment in innovation shows consistent positive correlation with GDP growth
  • Human capital and research development directly impacts national economic prosperity
  • Creative outputs and knowledge creation generate measurable economic returns
  • Institutional frameworks supporting innovation create environments for sustained growth

As Li Dongsheng, Founder and Chairman of TCL, observes: "Open innovation means the global convergence of technology, capital, talent, production support, and distribution. By fostering internal and external collaboration and extending innovation networks across borders, shared success can be achieved."

The Cross-Border Innovation Advantage

Why Geographic Boundaries Limit Economic Potential

Traditional innovation financing operates within geographic silos, creating what economists call "innovation market fragmentation." This fragmentation limits both entrepreneurs' access to capital and investors' access to optimal opportunities, resulting in suboptimal economic outcomes globally.

The research evidence supports this concern. While innovation consistently drives economic growth, the benefits are unevenly distributed based on geographic and regulatory constraints. Countries with better cross-border collaboration frameworks - such as those participating in open innovation networks - demonstrate superior economic performance.

The Network Effect in Innovation Economics

Open innovation networks create exponential value through what economists term "network externalities." When innovation ecosystems extend across borders, they:

  1. Increase the pool of available capital for innovative projects
  2. Improve matching between investors and entrepreneurs based on expertise rather than geography
  3. Accelerate knowledge transfer across different economic contexts
  4. Reduce transaction costs through standardized frameworks

As the UN Conference on Trade and Development emphasizes, new strategies for innovation are emerging worldwide, with policymakers supporting approaches that expand innovation's benefits to broader populations.

The Economic Evidence for Borderless Innovation Financing

Reducing Necessity-Driven Self-Employment Through Innovation Access

One of the most significant findings in the global innovation research relates to self-employment patterns. The study reveals that innovation improvements consistently reduce necessity-driven self-employment - the type of entrepreneurship born from lack of formal economic opportunities rather than genuine business opportunities.

Specifically, the research found that every unit increase in innovation capacity decreased self-employment by 1.04 to 1.33 percentage points. This suggests that improved innovation access creates formal employment opportunities, moving economies away from subsistence-level entrepreneurship toward growth-oriented business development.

The Global Innovation Gap

Current foreign direct investment in manufacturing has declined at a compound annual growth rate of -12% in the three years following COVID-19, according to the United Nations Conference on Trade and Development. This creates a critical funding gap for innovative startups and growth companies - precisely the gap that cross-border crowdfunding can address.

The World Bank reports that income gaps between the most vulnerable 75 countries and wealthiest economies are widening for the first time this century. This divergence correlates directly with differential access to innovation financing, highlighting the critical importance of democratized, cross-border funding mechanisms.

Technology Sectors Driving Innovation-Led Growth

Healthcare Innovation Economics

The healthcare technology sector exemplifies innovation's economic impact. Breakthroughs in genomics, AI-driven diagnostics, and telemedicine have transformed patient care while creating substantial economic value. CRISPR technology alone has spawned an entire biotechnology sector, while telemedicine growth accelerated by COVID-19 demonstrates how innovation creates new markets and economic opportunities.

Clean Energy and Sustainable Technology

Innovation in renewable energy represents one of the fastest-growing economic sectors globally. Countries investing in solar, wind, and battery technologies are experiencing significant job creation and cost reductions. The research shows that technological innovation consistently correlates with economic growth, with clean energy representing a prime example of this relationship.

Financial Technology Transformation

The fintech sector's explosion demonstrates innovation's power to reshape entire industries. Technologies including blockchain, mobile payments, and digital currencies have disrupted traditional financial services while creating more accessible, efficient alternatives. Companies like Square and PayPal have pioneered solutions enabling small businesses to access previously unavailable financial services.

The Role of Cross-Border Crowdfunding in Global Innovation

Addressing Market Failures in Innovation Financing

Traditional venture capital and banking systems create systematic barriers to innovation financing, particularly for:

  • Early-stage technology companies without established revenue streams
  • Entrepreneurs in emerging markets lacking access to established financial networks
  • Innovative projects that don't fit traditional investment categories
  • Cross-border opportunities requiring international regulatory navigation

Cross-border crowdfunding platforms address these market failures by creating globally accessible, democratized funding mechanisms that connect innovative projects with appropriate investors regardless of geographic constraints.

The Economic Multiplier Effect

Research demonstrates that successful innovation financing creates cascading economic benefits:

  1. Direct job creation in funded companies
  2. Indirect employment in supporting industries and services
  3. Knowledge spillovers that benefit broader economic ecosystems
  4. Tax revenue generation from successful innovative enterprises
  5. Export potential from innovative products and services

Policy Implications and Economic Strategy

Creating Innovation-Friendly Regulatory Frameworks

The research consistently shows that institutional frameworks supporting innovation directly correlate with economic growth. Countries implementing supportive regulatory environments for innovation financing - including cross-border crowdfunding regulations - position themselves for enhanced economic performance.

Key policy recommendations emerging from the economic research include:

  • Harmonized international standards for innovation financing
  • Reduced regulatory barriers for cross-border investment
  • Enhanced investor protection frameworks that maintain accessibility
  • Tax incentives for innovation-focused investment
  • Digital infrastructure supporting international collaboration

The Competitive Advantage of Open Innovation

Countries and regions that embrace open innovation frameworks gain significant competitive advantages. The research shows that globalization and international collaboration remain key drivers of economic growth, despite recent geopolitical challenges.

As Nobel laureate economist Christopher Pissarides emphasizes: "Openness and globalization are important forces driving economic growth and social progress. We must overcome current difficulties, continue promoting global openness and cooperation, and leverage new technological tools to deepen international cooperation."

The Future of Innovation-Driven Economic Growth

Technology Convergence and Economic Opportunity

Emerging technologies including artificial intelligence, Internet of Things, and blockchain are creating unprecedented opportunities for innovation-driven economic growth. However, realizing this potential requires accessible, cross-border financing mechanisms that can support diverse, international innovation projects.

Global Talent Mobility and Innovation Networks

Global talent mobility and knowledge exchange represent indispensable factors in open innovation success. The most successful innovation ecosystems actively encourage talent to cross borders for dialogue and cooperation, cultivating talent pools with international vision and innovative mindsets.

Sustainable Development Through Innovation

The research demonstrates that innovation-driven economic growth aligns with sustainable development objectives. Countries prioritizing innovation show improved performance across multiple economic and social indicators, suggesting that democratized innovation financing can contribute to broader global development goals.

Conclusion: The Imperative for Cross-Border Innovation Financing

The economic evidence is unequivocal: innovation drives economic growth, reduces poverty, and creates sustainable development opportunities. However, current financing systems create artificial barriers that limit this potential through geographic and regulatory constraints.

Cross-border crowdfunding represents a critical solution to these market failures. By creating globally accessible, democratized funding mechanisms, international crowdfunding platforms can:

  • Connect innovative projects with optimal investors regardless of geography
  • Reduce financing costs through increased competition and efficiency
  • Accelerate innovation diffusion across different economic contexts
  • Support underserved markets that lack access to traditional financing

The path forward requires coordinated international efforts to create harmonized regulatory frameworks that support cross-border innovation financing while maintaining appropriate investor protections. Countries and organizations that lead in developing these frameworks will position themselves at the forefront of the next wave of innovation-driven economic growth.

As the global economy faces unprecedented challenges, the evidence is clear: open innovation and cross-border collaboration are not just beneficial - they are essential for sustainable economic growth and shared global prosperity.

Join the Global Movement for Borderless Innovation

Ready to be part of the solution? Join GECA's growing community of 60+ global supporters working to create seamless, cross-border crowdfunding for innovation and entrepreneurship.

Join GECA Today →

Want to understand our complete vision? Read our comprehensive manifesto outlining the roadmap for enabling global equity crowdfunding and removing barriers that limit innovation financing.

Download GECA Manifesto →

This article synthesizes research from multiple peer-reviewed sources including: Dempere, J. et al. (2023). "The Impact of Innovation on Economic Growth, Foreign Direct Investment, and Self-Employment: A Global Perspective." Economies, 11(7), 182; Li Dongsheng (2024). "How 'open innovation' can promote sustainable economic growth and development." World Economic Forum; and comprehensive analysis of global innovation economics trends.

 

by GECA

How to Scale Crowdfunding Campaigns Globally: Marketing Secrets from $100M+ Campaigns | GECA Podcast

How to Scale Crowdfunding Campaigns Globally: Marketing Secrets from $100M+ Campaigns | GECA Podcast

Get ready for an action-packed deep dive into the world of crowdfunding marketing with Jason Fishman, CEO of DNA (Digital Niche Agency) and newly appointed GECA Steering Committee member. In this comprehensive episode, Jason shares battle-tested insights from over 500 successful crowdfunding campaigns that have collectively raised nine figures in capital across Reg CF, Reg A+, and Reg D offerings. From his early days in mobile advertising and ad tech to becoming one of the industry’s most sought-after crowdfunding marketing experts, Jason reveals the systematic approach that has helped companies like Mode Mobile raise $45 million, BOXABL hit $12 million, and Atom Beam reach their $5 million cap in just 43 days. In this conversation, he breaks down his proprietary 8-point strategic plan, explains why he views crowdfunding as fundamentally a marketing exercise, and shares critical insights about global campaign targeting, cross-border compliance challenges, and the art of building scalable traffic sources. Jason also discusses the crucial founder-platform-marketer relationship dynamics, reveals why most campaigns fail due to insufficient traffic, and explains his algorithmic approach to projecting campaign performance. Whether you’re a founder preparing for your first raise, a platform looking to better support your issuers, or an investor trying to understand what drives successful campaigns, this episode is packed with actionable strategies that could transform your approach to crowdfunding. Jason’s passion for democratizing access to capital and his vision for making crowdfunding the primary approach to capital formation make this a must-listen episode for anyone serious about the future of investment.

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Andy Field: Hello everybody. Welcome to the GECA Podcast, the voice of Global Equity crowdfunding. I’m Andy Field Steering Committee lead of the Global Equity Crowdfunding Alliance, where we speak with the leading voices who are shaping the future of capital raising across borders. And as crowdfunding continues to evolve, we’re exploring what it takes to run successful campaigns on a global basis, and what founders, platforms and investors really need to know to thrive in this expanding ecosystem today.

I’m joined by Jason Fishman, who’s CEO of DNA (Digital Niche Agency), a US based marketing firm that’s helped over 500 founders successfully prepare for and launch their crowdfunding campaigns. Jason’s got a deep expertise in Reg CF, Reg A and Reg D campaigns. And Jason and his team have been instrumental in helping lots of startups attract investment through strategic digital marketing.

And I should also point out that Jason is a newly crowned member of the GECA steering [00:01:00] committee. So welcome to the podcast, Jason. It’s great to have you here.

Jason Fishman: Thank you, Andy. It’s a pleasure to be here. Been looking forward to the discussion and being able to speak on this global stage to issuers internationally.

Andy Field: Fantastic. and if you enjoyed today’s episode, please make sure you follow GECA on LinkedIn, and visit the geca.org to learn more about our mission. we have our manifesto on the website, our growing global supporter base, and our steering committee, and of course how you could get involved as well.

And it just remains for me to say thank you very much for listening and stay tuned for more voices helping to shape the future of global crowdfunding. Thank [00:36:00] you.. Yeah, and I had the pleasure of meeting Jason in person back in LA that was back in May. And I knew straight away that his insights, Jason did a really detailed presentation and I knew straight away that his insights would be really valuable to our global audience. Especially as more founders and platforms are looking beyond borders as to help to grow their investor base.

So we know that Crowdfunding’s maturing quite quickly in the US but the ecosystem around the world is still fragmented and probably has to catch up a little. And at GECA, we’re focused on helping to create alignment globally and conversations like this one are really, important. they form part of the learning from different markets and different approaches.

And, Jason’s experience working hands-on with campaigns and, very closely with platforms, I think make him the perfect guest to [00:02:00] help us bridge that understanding. So I think we can dive straight in Jason, if that’s okay with you?

Jason Fishman: Absolutely, Let’s do it.

Andy Field: Great. I think well. Let’s, for, the purposes of, and the benefit of, people that haven’t come across you or, DNA yet, can you give us a little bit about the origin story?

So what led you to start a marketing agency which focused on crowdfunding?

Jason Fishman: Yeah. I’m happy to go back there and relive the days where I had, first I was working on a mobile advertising network. Building relationships with publishers, running campaigns for Fortune 500 companies. Advertisers got a good sense of what worked, didn’t work across a whole spectrum of industries, budget levels, timelines, but I wanted to get back into the startup world.

Had experience here in Los Angeles, California was part of a social gaming company, be before getting emerged into the world of ad tech. And was asked to partner in this agency, DNA. We’re talking back in [00:03:00] 2014. We began as a growth marketing firm and we found capital raising. To be a common theme among our clientele, whether it was working on the marketing section of a business plan to be presented to investors, putting together pitch decks, modeling a first campaign, showing performance, so those results could later be presented to an investor and have more capital injected into that company.

Even participating in investor meetings themselves, we were always brought to this conversation around capital. So when I was introduced to Reg D. Regulation 506C, allowing for solicitation of accredited investors, high net worth, high household income individuals. The light bulb went off because I was able to tell clients, Hey.

we can use our digital marketing skillset. We can use these same channels to bring investors to your offering, generate leads, nurture those leads. The first campaign we worked on, was successful, on a platform at that point called [00:04:00] Fundable, and we were introduced to more issuers on that platform.

On others. We also got attention from the. Reward crowdfunding world, Kickstarter, Indiegogo campaigns. We started getting white labeled by agencies in that space and over the next year worked on a good 40 50 of those. Started embracing the fundamentals of what a crowd sale consists of, and those groups actually introduced us to our first Reg CF clients.

back in May of 2016, day one of Reg CF, we had advertising live. Started getting more introductions, more referrals, getting invited to speak at events. Yep. worked on a regulation a plus campaign later that year. And at that point it was our key focus regulated investment crowdfunding to date have worked on over 500 of these deals that have collectively produced nine figures of capital.

We’ve worked on campaigns this year just here in 2020. Five that has have surpassed nine figures of capital. I look to showcase, [00:05:00] the results on my podcast. Just put out episode 209 each with a different guest, many of the top issuers. I’ve been on it. yep. Of course. As I was saying, the thought leaders in the space Andy’s been on, and, I try to be an open book in terms of what physically drives results and what is under-producing in the market today.

Andy Field: Amazing. Amazing. I’m just wondering, in those early days, was it often the case? Did, all of your clients come to you with the intention of raising funds or actually, was that a suggestion you brought to the table and said, look, have you thought about this? Marketing can be applied not just to the, the marketing plan and strategy of your business, but also for this very specific purpose of, raising capital.

Jason Fishman: it was primarily through introductions. What ended up occurring is. These clients, these perspective groups would see our case studies and say, Hey, this is interesting. Yeah. Perhaps we should be raising capital. But I do say that there are other [00:06:00] considerations beyond marketing that groups want to take into account before determining whether they want to go down this, path of regulated investment crowdfunding, using digital tools to source investor conversations, to convert, those discussions, those audiences that they’re going after.

I am a, big believer that every group that is. Doing a Reg cf, a regulation a plus campaign, really even a, Reg D 506C should absolutely be marketing. yeah, but I’m usually not telling every company that they should do one of these rounds. and part of it is I want them to be committed.

I want them to know, hey, yeah. This is the path we’re going down so we can then focus on the marketing discussion. And I’m not speaking too much to legal, to accounting, to areas that are, outside of our expertise. I could share notes there Yeah. But can really have an in-depth, interaction, along with recommendations on how to effectively bring investors to a deal.

Andy Field: Okay. That, yeah, [00:07:00] that makes sense. Typically today then, what sort of clients are you working with? I can see how the power of the recommendation of the case study, is going to bring those clients to you. But do you have a typical, DNA, if you like, of a, client?

Jason Fishman: I put it into three categories, groups that are in planning, groups that are plateaued, and I could speak more about success rates and groups that are scaling.

There is not one ideal customer persona profile as much as they’re in one of those three stages. Scaling probably the most exciting for us to talk about. Yeah. could tell you about campaigns. Advertising performance. We’ve seen this year with Mode Mobile. They hit 45 million. their full cap on regulation A plus in May could share results from BOXABL RAD Intel, which hit its $12 million goal.

And maybe going further from here, can talk to you about Atom Beam, can talk to you about [00:08:00] avidan hit the $5 million cap on Reg CF in 43 days on May 8th. So a, lot of different groups that I would say are serial issuers. they’ve, yeah, run multiple campaigns. They’ve built up an investor audience, still driving new people on a daily basis and retargeting everybody.

it’s then different if we speak to a group that is stuck. They’re on a Reg CF platform, perhaps, and they’re not really seeing any traction. Yeah. Or they’ve at least plateaued where, their, movement is pretty consistent and it’s not gonna get them to their full goal, different type of, conversation that I have with those groups.

And then you have the folks in planning where there are, more variables. You could set up a full campaign strategy, algorithmic roadmap, if you will, taking them from point A to point B into each milestone, in route to their full goal. [00:09:00] it’s encouraged that first degree audience comes in during those early stages.

So that’s a bigger part, of the plan. But I usually put it into one of those three categories and across a whole list of different verticals. I like to say it’s typically. it, it’s commonly, reflecting what we’d read about in the media. If I’m yes, researching on a business site, entrepreneur site and hearing about new fields that, are emerging, it’s pretty common that I’ll receive a call from a group in that space in the coming weeks.

We even wanna make our headlines, our copy reflect what a target audience member may be consuming in the media that week.

Andy Field: I bet that can help with your planning as well. So that’s quite useful.

Jason Fishman: absolutely.

Andy Field: so just moving on a little bit to the global perspective and, your experience and views about that.

Obviously DNA is, based in the US but are you seeing growing interest from, founders or from [00:10:00] investors? Actually just. from your sort of experience point of view, are you seeing more interest, on an international basis, so investors who are looking to, invest in international businesses and founders who are looking to gain investment from international investors?

Jason Fishman: Yes. Yes, absolutely. So it really goes back to 2017. In 2017, we started getting inquiries that would include the word blockchain in it and. We started getting invitations to speak at conferences globally and not just about Web3 projects, but, a, full list of, different, industries at that point.

I’ve been Istanbul for the World Congress of Angel Investors Forum. I’ve been to. Australia for Google Startup Grind APAC. I’ve been to conferences, in Asia and Europe. I think I’ve spoken, at events in eight different countries. And each of those would have side [00:11:00] meetings with different investment banks, funds, publishers, accelerators, consultants, and have these contacts regionally, in each of these markets that we can use to, accelerate campaigns.

There’s, Reg S we’re working on Reg s campaigns right now. I’ve been doing so for years. there are various different types of, audience building campaigns that we’ve worked on internationally. We’ve had to exclude, US investors from, many campaigns at that. Yeah. we’re, not advising the clients, Hey, here’s exactly who you should and who you shouldn’t be targeting in terms of, country and location.

As much as they’re telling us, Hey, we wanna do this globally, Hey, we want to go after investors. We’re allowed to target investors in these three countries, these five countries. Yeah. Which is often how I look at global campaigns. By the way. I still [00:12:00] want to build, a marketing campaign, a funnel that speaks to audiences in a more personalized fashion.

In general, let alone when incorporating geotargeting. So yes, I’ve had the opportunity to, run campaigns that brought in, both retail and accredited investors in Europe and Asia. I can tell you that there’s, definitely interest from groups internationally to target US investors and vice versa.

There are US campaigns where there’ll be an extension on a different portal or with a different broker dealer, and from an advertising perspective. We could geo geotarget down to, very, small areas we could geofence around buildings. Yeah. And target people who’ve been in, let’s say, conference centers in the past six months, on basic ad platforms in the US it’s the zip code level.

but we can, really be specific on who we’re going after AB tests so we could see the [00:13:00] pockets of performance, where we’re getting the best results and doing more of what’s working.

Andy Field: And I guess, yeah. So the technology and the methodology is universal. It’s there anything can be done to the level that, that you’ve outlined there.

I suppose though there are, some hurdles to, to this and, have you noticed any specific hurdles for campaigns who are looking to raise capital across borders?

Jason Fishman: compliance is, yeah. Always, part of the discussion. If we speak with the group and they say they’re launching in a month or three months, we wanna prepare to do a longer pre-launch campaign so that if there are any delays, we can continue audience building, engaging, those groups.

Building more community so that the first day, the first week of the raise, are more substantial, going back to reward crowdfunding tactics. And, it took a lot of best practices from that. [00:14:00] It, really sets the foundation of your campaign. If you have a strong, we’ll call it first chapter, instead of putting any time limit on it.

Targeting is not being done correctly. You could be generating leads from investors. You could have investors coming to your offering that are not able to physically participate. in the US we call it KYC, know your client. They’re not able to pass through the KYC process. That language is more commonly used when speaking about accredited investors and their household income, their net worth requirements to be able to, purchase shares in that round.

Yeah. Similar types of, prohibits, on some of our international campaigns, especially if it’s around a fund. lp, gp, limited partner, general partner, acquisition campaigns. We’re bringing in larger investors to come in and there’s some type of obstacle, monitoring press globally Yeah. Is a different animal.

So definitely, yeah. What [00:15:00] may be relevant in terms of messaging to us here in the us? It may not be, reflecting the times, internationally. So we have to keep a very close pulse on what news is coming out. Is that it’s, disturbing that, as Americans, we may not, may, we may not be, we may not be receiving all the news that people in Europe, people in these different areas are, and vice versa.

So it’s very important that we’re putting ourself in the shoes of the target audience and doing appropriate searches so that we’re able to get a better idea of what they’re being told.

Andy Field: That’s a really good point. I’d never even thought of that, but that’s a really interesting point.

Jason Fishman: Yeah, We could say something that, is out of line in advertising messaging.

Yeah. Or more importantly, we wanna model the campaign off what’s working today. When I work on one of these rounds, I recommend beginning with the strategy, could get more into that, but section, I built a model called the eight point plan. [00:16:00] Generally working on two sections a week over the course of a month, starting with the industry overview and moving to the competitor marketing audit because we want to have a

good understanding of what those prospects, what those potential investors are seeing on a daily basis. We do not wanna be shooting in the dark. What other investment opportunities are they being presented with? Via advertisements on social platforms, on the media sites that they frequent, through email and newsletters that they subscribe to.

And success leaves clues we want to take from that when building a campaign, right? Yeah, of course. Putting a brand’s touch on it. have to do a, more intensive dive. Extra layer of research for international campaigns as a whole.

Andy Field: and that kind of everything you’ve outlined there covers the question I was going to ask you next, which was what advice would you give for non-US founders who are hoping to attract, US investors?

So, people perhaps in Europe, businesses in Europe who are looking to target [00:17:00] investors in, the us. I don’t expect you to answer that question. There’s so much detail to that question. I know, but you’ve covered a couple of the main bits there actually.

Jason Fishman: I could elaborate on that a bit further because that eight point plan, building a strategy, it, it is often overlooked by founders and CEOs.

It sounds self-explanatory. But so does budget conservation. Yeah. And so does overall, finance, use of the existing funds. Marketing generally requires some type of budget. There are many things that you can do, using human capital and, leveraging existing audience. So I don’t wanna say it has to, but just.

It commonly does. So when it comes to allocation of those funds, hey, let’s skip the strategy. Let’s just run advertising. Let’s just do outreach. Let’s just pay to be featured in these publishers, programs. [00:18:00] I Wanna make sure everything we’re doing is direct response, meaning we’re able to measure a return on ad spend, the cost, of capital.

And I, I would encourage everyone to create a marketing strategy first. When I think about Reg CF, when I think about regulation a plus, I really define it as a marketing exercise, and that’s not just because I’m a marketer. You can hear lawyers, you could hear CPAs, accountants who are working on these campaigns saying the same thing.

It, is contingent on enough traffic if the deal is listed online, which, these filings are enough traffic to the offering page with a average, if not close to average conversion rate and a strong enough average investment value. Without enough traffic contingent upon that conversion rate coming through, you’re simply not gonna hit the full goal.

So you need to ask yourself, how am I gonna get this traffic? What is going [00:19:00] to engage them? What is gonna move them forward? When I talk about the eight point plan, just firing through the headlines, you’re looking at two to three different industries looking to take stats from there so you can really present the market opportunity, and have everyone involved, more connected to what the ecosystem looks like today, that competitor marketing audit.

Oh man, that, that’s the most important part to me. Yeah, I will do a brief one even before speaking with issuers, just so I have an understanding of what’s occurring in this space today, what the conversation between investor and issuer looks like today. you then map out your target audience personas.

Like I said, you wanna put yourself in their shoes and really understand. What do they do on the weekends? Where do they go online? What makes them move forward? What are they converting on today? before you start to, to pitch them and digital allows for this, you, could look into all of it, and have variance.

It’s not just one type of investor. you should be going after at least three to five. You want to understand the touch points of [00:20:00] those audiences, how you can reach ’em with paid advertising, how you can reach them with organic content on those channels. You then wanna prioritize. again, budget time.

Which channels do we wanna start with? Yeah. industry. competitor marketing, audit audiences, channels before you determine what am I gonna put any of these channels, what is going to be, the messaging in the first sets of ads? What does the content calendar look like? Yeah. Because you’re taking the audience through an experience, it’s likely gonna be seven touch points or more before they convert.

Even on a lead form, let alone a retail investment offering page. I say that because it’s, a lighter minimum. It’s gonna be at least seven touch points. You wanna be intentional about what those audiences see when they’re searching around and doing their own due diligence. A and this may sound a lot like a lot of work, but this is an opportunity.

Imagine you’re speaking to someone offline, you don’t know what they’re gonna look at, you don’t know where they’re going. From there, digital, you could actually get a good sense of where they’re going [00:21:00] and position for that. There’s headline worthy announcements showing up on ads, on organic content, on, third party mentions and they keep seeing you and with engaging content, you wanna look at strategic partners that could really have everything move faster for you, reach out to their existing, loyal, warm audience.

It’s how I’ve seen campaigns move the quickest. And then after the competitor marketing on it, the most important section for me is the projections. I think it’s the most important section for a lot of groups. the CFO will classically, just flip to the spends and the budget levels. Yep.

The projections. but it’s very important. The only way to measure is with numbers. So how much are you raising the first week, the first month, the second month? Not, just total amounts and, taking a guess as much as what does the algorithm look like? I, mentioned a term earlier of algorithmic roadmap, so I like to think of it [00:22:00] in digital terms of impressions, clicks, and conversions.

True. How many times an ad or a piece of content is being seen, how much traffic is it driving to an offering page or a landing page? You wanna look at the offering page after that, if it’s a landing page, but to, to an offering page. and then how many conversions are coming through and average projections.

You could even put an average transactional value, an average investment size, which I, could tell you for different filings, you could research for different filings. Again, there’s plenty of issuers that have done this before and the information is there. Sure. Maybe you see some larger investments that get you to a much higher average, but, I like projecting conservatively, if it’s a 1% click through rate and a 2% conversion rate.

On a Reg CF campaign last year, $1,500 was the average investment regulation a plus was about $2,300. Given we’ve worked on regulation A plus campaigns this year with, over $5,700 as [00:23:00] the average investment value. Reg D. If it’s a 100k minimum, maybe it’s a $260,000, $280,000 average investment, but you have to take in account how many leads it’s gonna take

maybe one out of 50, one out of a hundred. Convert your cost per lead, your acquisition cost. If you don’t know these numbers, you’re just hoping it’s gonna work. Yeah. Yeah, and that ties your hands to that thought. Once the campaign’s live, you may just shut off a channel and have no replacement for it.

You want to be able to speak about it in a very granular fashion of, Hey. We should be at this click through rate. we’re a bit lower. That’s affecting our conversion rate, cost per acquisition, and the conversion rate’s low too. So we’re paying way too much. You have to know where in the algorithm traffic’s per, falling off and I guess optimizations there.

Andy Field: I guess that helps founders as well plan for their budgeting because obviously they’re ev every, [00:24:00] absolutely, every cent, or every penny is counting for them. So they have to be able to, see what every single penny or cent that they are spending is doing. and I think you, when we were in LA we were talking very much about testing and learning and optimizing

and that’s absolutely crucial because you need to be able to measure and show to the founders everything that’s being spent has a an action if you like. So that’s, yeah, that, that’s really interesting. I’m sure we could talk loads more about tactics, but time is gonna prevent us doing it on this occasion.

Jason Fishman: Of course. We could probably do another,

Andy Field: of course, we could probably do another, another session though. That would be really interesting. But, so, you’ve worked closely with a range of platforms. What does, in your opinion, what does an ideal founder platform marketer relationship look like? How does that dynamic work?

Jason Fishman: I like how you depicted that. You didn’t ask me, Hey, what’s the best platform? What portal is gonna produce the best results? What you just described [00:25:00] is the right way for a founder to look at a platform, which it’s a tool that they can use to complete investments, that could drive traffic to the offering.

Yeah. And it’s really that, that collaborative between them. What does that relationship look like? Clear communication. Yeah. I’ve, spoken to founders that felt is their words. They were oversold by portals and, perhaps, the sales team. I, wanna say, in some cases it would. Younger sales staff

over promised, over committed. Hey, we’re gonna be able to raise $5 million for you, the full level on a Reg CF we just did this campaign, it did 75 million. This is gonna be a breeze. This is dangerous for a portal to speak. to speak that way. Yeah. same with [00:26:00] a tech platform or broker dealer.

And just referencing, past successes. Those are the outliers, or at least, top 10%, if you will. it, I, wouldn’t say, Hey, let’s just focus on the failures or success rates. Some of these platforms, they’ll look at the, minimum raise. There’s a minimum and maximum on the filing and say, they have a 90% success rate because they’ve hit the minimum on all these, which the minimum should always be hit.

you’re setting it to say, no matter what, we’re hitting that point. Yeah, that’s right. It’s the baseline. Yeah, yeah. Yeah. pay extra attention to the stats. But I would say, you speak to three, maybe five, but I like three. And you know who you have those best, conversations with the communication, the rapport you really want, gonna wanna gravitate towards them.

And then it’s a matter of setting up a good plan more than just the marketing plan. what you’re doing on the filing, the valuation, the offering [00:27:00] page, the pitch video. Starts getting into marketing where you’re planning your updates, you’re planning what you’re gonna post on social channels, on email channels, on long form content channels outside of the offering page.

You’re determining your traffic sources and what’s gonna go through. You have an understanding from the portal of what they can do. Yeah. And they cannot, FINRA regulates the portals here in the US and they have to treat. Every issuer the same. The portals cannot play favoritism. Yeah. So they build these, these rules of how they promote, issuers.

You hit 50 k, 120 5K, 2 50, 500 a million. Each portal has its own set of guidelines on how they work with issuers, but they’ll promote to their investor audience at that stage. You do not wanna work with the portal and think that. Me merely listing with them, you are going to raise the full amount, or their audience is gonna get you to the full [00:28:00] level.

If their audience comes to bat and 50% of your investments come from them, fantastic. But. You do not want to hold your breath on that. And, really when they say 50%, it means as you’re raising funds, you’ll see more of their audience, participating as well. Yeah. Yeah. Increased exposure to their existing investor base.

Andy Field: Yeah. Yeah. Yeah, I guess that’s probably when you just said it resonated with me. my next question is actually going to be along the lines of, what, would you say is the one thing founders must get right if they’re preparing a campaign today? But you mentioned the plan there and that.

That’s always been, certainly been how I operate. the, there’s the famous quote isn’t the something like, if you fail to plan, you plan to fail. so I that, that sounds like it’s probably going to be along the lines of what you’d say is, a really important thing that founders need to get right, is their planning.[00:29:00]

Jason Fishman: Yes, but I don’t wanna be repetitive, so I’ll add to that. So what the plan is gonna tell you is that you need to have these traffic sources and you need to have this content to continue engage them to the point of conversion. So the reason I say the plan is it, builds all that out. They say the plan.

Great quote, by the way. It’s one I say a lot about if you fail to plan, but another one is that the plan is more about the process Yeah. Than the finished product. Yes. It’s asking yourself those questions. How am I gonna get enough people there? just to throw some numbers at it, on a Reg CF campaign, I said $1,500 is the average investment.

So if you are getting 50,000 visits. To the offering page and you’re seeing a 2% conversion rate. Google says an average conversion rate internet wide is 2.35%. in studies that I referenced, [00:30:00] thousand investments average of $1,500 each. That’s $1.5 million. To some people, $1.5 million is not a lot of capital.

It’s all relative. but that’s a thousand investors on a Reg CF campaign. That’s 50,000 visits. Can you do this? Yes. Do you have to have the traffic sources and ensure that you’re getting 50,000 people there? Yes. It, could happen, viral marketing. Yeah. Publisher finds you an email newsletter that charges investors to receive deal flow, finds you, there’s all types of things that, that could occur, but I having the resources in house so I’m not just, crossing my fingers, relying on chance.

yeah, You wanna have scalable channels. That’s why I like advertising so much. Outreach. It can work for larger investors, but be prepared. The outreach it has to generate that traffic. So think about the volume of outreach you need to do [00:31:00] to get that amount of traffic. There much more straightforward path to do that with advertising, but I would say scalable traffic source sources such as advertising and a good content marketing funnel to take those audiences from awareness.

To consideration. They’re considering investing to intent, they’re intending to invest, and there’s still a drop off there. Those that intend, it’s only gonna be a small percentage of ’em that actually do invest. So you only have content to support each step of the puzzle and get a higher conversion rate all the way through.

That makes sense, Jason? I got more. The more social proof, the better. The more third party validation, people don’t believe what they see online. The more of that, the better, all the way through.

Andy Field: That. Yeah, I was just gonna say that you’ve mentioned that to me before. I’m sure you did in your presentation, so that’s fantastic.

So just coming on to, your role with gcca and you, so you’ve, you’re obviously a seasoned expert in all aspects of, crowdfunding marketing. [00:32:00] but you’re also now, a valued member of our GECA steering committee, and I’d just like to. Touch on what motivated you to get involved with GECA? obviously I approached you because of the expertise.

I know you bring to the committee. what do you hope to contribute as part of the group? And then from your perspective on the steering committee, how important do you think that global collaboration is when we’re shaping the future of equity crowdfunding or, regulated crowdfunding as it’s known as in the US.

And what role do you think GECA could play in moving that forward, in breaking down some of those borders? Long question.

Jason Fishman: I’m gonna fire off a few points here. Yeah. That lead into GECA. When I look at the stats industry wide for the investment crowdfunding industry, I don’t believe there’s enough investors.

Yeah. I don’t believe there’s enough issuers and I don’t believe the success rate for either side of the table is great. I’d love to see a higher success rate for issuers. Yeah. Yeah. Industry wide. we’d love to see more awareness for the past. [00:33:00] Nine years. I’ve been explaining to people virtually every day what equity crowdfunding is.

Meanwhile, so many startups fail because they’re undercapitalized, and they should know about these tools. It’s why I put my energy into this space. it’s very fulfilling to be part, of a campaign where a company’s growing and working on later rounds, and I see their offices, their team, their market share, everything ramping up.

This is where I feel I could be most effective. I joined the Crowdfund Professional Association, the CFPA, here in the US January of 2024. I’m now on the executive committee and. Have been thrilled by the work that we’re doing. We’re working on tax incentives for investors here in the us, which would bring far more awareness, meeting with legislators.

Yeah. meeting with all different types of regulators, meeting with groups that can really get more attention, [00:34:00] to these exemptions, to these laws here in the us. and when you approached me about GECA, I said, yes, Let’s do this on a, global stage. I think, worldwide there could be more of an awareness.

And I, do believe that, five, 10 years down the line, this is gonna be the primary approach towards capital formation. And I wanna set the right best practices in place for marketing with the learnings that we’ve had. So speaking to founders all over the world, speaking to investors about what this type of deal flow looks like, it’s right in line with our initiatives.

And so I’m excited to be a part of.

Andy Field: That’s amazing. And, I couldn’t agree more with what you’re saying there. it, it resonates well with me and you’re a really valuable and welcome addition to our steering committee, so thank you so much for that. and, that’s actually all we’ve got time for, today.

Jason Fishman: Okay.

Andy Field: And I know we, we’d love to, to have a future session with you if that’s okay Jason, just to go into a bit more detail.

Jason Fishman: my pleasure. [00:35:00]

Andy Field: We’ll make sure there’s a link to the website where people can find out more about your, your eight point plan and all of the other services, that, you offer.

but I just wanna say a huge thank you for, joining us today and for sharing all those valuable insights. it’s clear that platforms like DNA are doing vital work in making, investing more inclusive and, then aligning with the global vision for a, more connected and, a better equity crowdfunding ecosystem.

Thanks Jason.

Jason Fishman: Again, my pleasure. Good to get the information out there and happy to speak further to your audience at any time.

Andy Field: Fantastic and if you enjoyed today’s episode, please make sure you follow GECA on LinkedIn, and visit the geca.org to learn more about our mission. we have our manifesto on the website, our growing global supporter base, and our steering committee, and of course how you could get involved as well.

And it just remains for me to say thank you very much for listening and stay tuned for more voices helping to shape the future of global crowdfunding. Thank [00:36:00] you.

by GECA