A conversation with Karsten Wenzlaff reveals the strategic decisions, regulatory challenges, and collaborative pathways that transformed European crowdfunding – and what the world can learn from it

By Andy Field, Steering Committee Lead, Global Equity Crowdfunding Alliance

When Karsten Wenzlaff volunteered for Barack Obama’s 2008 presidential campaign, he witnessed something revolutionary: the power of combining digital fundraising with community building. That experience sparked a journey that would lead him to become one of Europe’s most influential voices in crowdfunding regulation – and ultimately, to help architect a framework that could reach €1 trillion in annual volume.

Today, as Secretary General of the German Crowdfunding Association and Research Director at the European Digital Finance Association, Karsten sits at the intersection of policy, platforms, and possibilities. In our recent GECA Podcast conversation, he shared insights from a decade of work harmonizing crowdfunding across Europe – lessons that hold profound implications for building a truly global crowdfunding ecosystem.

The Accidental Advocate: From Campaign Volunteer to Industry Leader

Karsten’s path into crowdfunding leadership wasn’t planned. After Obama’s 2008 campaign demonstrated the potential of massive online donations combined with community engagement, he began connecting with German platforms emerging in 2010-2011, just as Kickstarter was generating significant discussion in Europe.

“It was all about not just gathering money for the purpose of financing a project, but really about creating a community of people who are enabling an entrepreneur,” Karsten explains.

His neutral position – not running his own platform – made him the ideal moderator for what became the German Crowdfunding Network, an informal exchange between platforms. But in 2014, a proposed consumer protection law threatened to inadvertently make crowdfunding illegal in Germany. The platforms needed someone with organizing and political experience to represent their interests.

That’s when Karsten transitioned from facilitator to advocate, becoming Secretary General of what would officially become the German Crowdfunding Association in 2016. Next year, the organization will celebrate its 10th anniversary with a gathering in Frankfurt – a milestone that reflects not just organizational longevity, but the maturation of an entire industry.

The ECSPR Journey: Four Scenarios and a Difficult Choice

Before the European Crowdfunding Service Providers Regulation (ECSPR) became reality, Europe faced a fragmented landscape. Platforms operating in one country needed separate licenses for each additional market. In some countries, no specific crowdfunding regime even existed, forcing platforms to navigate complex workarounds using brokerage licenses or other financial services regulations.

The European Commission’s approach to solving this problem offers valuable lessons for any region considering regulatory harmonization. Rather than imposing a solution, they presented four distinct scenarios for stakeholder consideration:

Scenario 1: The Opt-In Regime

Under this model, platforms could choose between their national crowdfunding framework or a European one. While offering flexibility, this approach was ultimately rejected because it created confusion for investors. As Karsten notes, “If you have a crowdfunding platform, it should be clear to the investor how this platform is regulated. Having two regimes at the same time is a little bit difficult.”

Scenario 2: Best Practices Framework

This lighter-touch approach would have seen the European Commission identify and promote well-functioning national laws without creating binding requirements. The industry rejected this path because it lacked the regulatory certainty platforms needed to make significant investments in cross-border operations.

Scenario 3: Full EU Harmonization

This option would have created a single framework supervised entirely by European-level regulators ESMA and EBA, with no deviations permitted. While offering maximum consistency, platforms pushed back because they valued their relationships with local regulators who understood their specific markets.

Scenario 4: Harmonized Framework with Local Implementation (The Winner)

Europe ultimately chose a hybrid model: a unified European framework implemented by national regulators. While this creates some friction, it offers crucial benefits. Local regulators maintain ownership of their crowdfunding industries, platforms benefit from regulatory clarity, and the entire ecosystem can operate with a single passport across 27+ EU member states.

“The local regulators have this ownership of the crowdfunding industry as well,” Karsten emphasizes. “That’s in my view really important for the long-term development of this industry.”

The Reality of Implementation: Six Weeks vs. Eighteen Months

Creating a regulation is one thing. Implementing it fairly across diverse jurisdictions is quite another.

The ECSPR stipulates that regulators should provide a decision on platform license applications within three months. In practice, Karsten reveals, the variation is dramatic: “The regulator was able to process these license applications within six weeks, and then they had the license, everything was fine. And in other countries it took them sometimes 18 months because they were going back to the platform, asking for more information and then would drag this process along.”

Even more striking were the disparities in licensing costs. Through the working group that Karsten facilitates – which has been meeting monthly since 2015-2016 – platforms compared notes and discovered some countries charged €15,000 for licensing while others charged just €300.

“Just by doing that, you could say, it doesn’t seem to be fair. Not a level playing field,” Karsten observes.

The transparency created by this comparison prompted change. Countries with excessive fees have reduced them, demonstrating how industry collaboration and data sharing can drive regulatory improvement even without formal enforcement mechanisms.

Bridging the Research-Practice Divide

One of Karsten’s key contributions extends beyond regulatory advocacy to fostering connections between crowdfunding platforms and academic researchers. As Research Director at the European Digital Finance Association, he’s worked to ensure platform data informs scholarly understanding of what works in crowdfunding – and what doesn’t.

“Researchers often have really good ideas, but they lack this access to data,” he explains. “The impact on just this specific area is really phenomenal.”

This commitment manifests in the International Conference on Alternative Finance Research, which brings practitioners and researchers together annually. This year’s conference was held in Norway; next year, it moves to Malaga, Spain. These gatherings create vital feedback loops between theoretical understanding and practical implementation.

The emphasis on evidence-based policy reflects a broader philosophy: crowdfunding regulation should be informed by actual market dynamics, not just theoretical concerns. By facilitating data access for researchers at institutions like Cambridge University, Karsten has helped build an empirical foundation for policy development.

The €1 Trillion Vision and the Report That Benchmark’s Progress

The European Digital Finance Association has just released a comprehensive report examining ECSPR implementation challenges country by country. The report identify’s what regulators are doing well and where they’re falling short – creating accountability and encouraging mutual learning.

More ambitiously, the report articulates a goal: achieving €1 trillion in annual crowdfunding volume across Europe.

“We want 1 trillion euros to be on the platforms every year,” Karsten states, “and to get there, we need certain changes in the legal framework as well.”

These changes include reassessing the current €5 million threshold, which was itself a compromise. Some governments initially argued for lower limits, while others pushed for €8 million or higher. The upcoming evaluation will likely recommend expanding the scope of ECSPR to accommodate larger raises and more diverse use cases.

The report’s country-by-country benchmarking serves multiple purposes. It creates competitive pressure on underperforming regulators, provides best practice models for those seeking to improve, and offers the European Commission specific data points for refining the regulatory framework.

Karsten emphasizes that regulators aren’t deliberately obstructing the industry: “The regulators are not trying to be hurtful on purpose. It’s more that they come from a certain legal framework in which they have a certain interpretation of what it means to be compliant with a certain text.”

By bringing regulators together to compare interpretations, the industry can help them understand when they’re being overly restrictive or permissive – without requiring formal legislative changes.

Three Visions for Global Crowdfunding’s Future

When Karsten joined GECA’s Steering Committee, he brought not just European expertise but a clear vision for what global crowdfunding could achieve. He describes three types of campaigns he’d like to see become reality:

The Global Deep Tech Raise

“I would like to see a startup, maybe in the area of deep tech or quantum computing, which uses crowdfunding by maybe a platform from the United States, a platform from Germany and a platform from Singapore jointly raising enough money to really drive the innovation and have the equity supporters be part of it.”

This vision recognizes that truly transformative technologies often require capital pools larger than any single market can provide – and that community engagement across borders can accelerate both funding and adoption.

Cross-Border Climate Finance

“I would like to see more of projects where people invest into renewable energy and the transition into climate-friendly energy production. It should be those people, like in the colder countries in the north, they might have more money to invest in the global south, where it would actually make sense to create these kind of projects.”

This model addresses both capital efficiency (connecting investors where capital is abundant with projects where impact is highest) and mission alignment (enabling individuals to directly fund climate solutions regardless of geography).

Institutional-Retail Collaboration

“Crowdfunding becomes more and more also an interesting opportunity for institutional investors. Especially public institutional investors, people who want to make it easier to facilitate certain investments into specific areas.”

Karsten envisions public funding helping private investors understand risk while supporting important but sometimes uncertain ventures. He cites examples like the African Guarantee Fund and Swedish guarantee funds, which validate projects for retail investors without necessarily providing the bulk of capital.

“What we need is a way of making sure our investors increase their appetite for risk, that they feel more confident,” he explains. Currently, development banks and guarantee funds focus on massive projects – €500 million infrastructure investments, for instance – while smaller €1-5 million crowdfunding raises struggle to access this support simply because institutions aren’t familiar with how platforms operate.

GECA’s role, Karsten suggests, could be facilitating these introductions so institutional players understand crowdfunding’s potential for extending their impact.

A Four-Step Roadmap for Global Crowdfunding

Drawing from Europe’s experience, Karsten proposes a pragmatic pathway for building a global crowdfunding ecosystem:

Step 1: Platform Collaborations

Start with practical partnerships between platforms in different jurisdictions. These collaborations don’t require regulatory changes – just willing platforms and clear agreements about how to jointly support campaigns.

“I would like to bring my members in Germany to meet with platform members from other countries,” Karsten says. “Just getting them into virtual workshops and exchanges would be very helpful.”

Step 2: Framework Recognition

Develop mechanisms for recognizing different jurisdictions’ regulations as equivalent, even when the specific legal language differs. This principle-based approach asks: “Even if the law itself is different, is it still trying to achieve the same thing? It’s the same principle. Therefore we will recognize each other’s frameworks.”

GECA’s recent roundtable discussions – featuring Karsten alongside Jenny Kassan from the Crowdfunding Professional Association (US) and Bruce Davis from the UK Crowdfunding Association – identified benchmarking as a crucial early step. By documenting what different frameworks require and how they function in practice, the industry can build cases for equivalence.

Step 3: Passporting Rights

Once frameworks are recognized as equivalent, develop criteria allowing platforms licensed in one jurisdiction to offer services in another without obtaining a completely separate license.

This doesn’t mean zero local requirements – platforms would still need to meet standards around communication, disclosure, and potentially find local partners for compliance auditing. But it dramatically reduces the barriers to cross-border operation.

Step 4: Harmonized Global Campaigns

The ultimate goal: “A harmonized framework for a global equity crowdfunding campaign.”

Karsten acknowledges this will be extraordinarily difficult without a global legislative body. His proposed solution: allow fully licensed platforms from one jurisdiction to participate in truly global campaigns by partnering with platforms in other jurisdictions.

“You would need local partners for your global campaign,” he explains. “This would ensure that you would have a good use of the local ecosystem, but you would also be able to achieve this global reach.”

For example, platforms might need annual compliance audits demonstrating they’re meeting local requirements. This creates accountability while enabling international collaboration.

What GECA Brings to the Table: Knowledge Infrastructure and Convening Power

When asked about GECA’s role in fostering international alignment, Karsten emphasizes two critical functions:

Building a Knowledge Library

“The different formats that you have developed are very relevant to get these sometimes also details right,” Karsten notes. Understanding specifics – like how disclosure documents must be published, whether regulators validate them, and who bears liability – enables informed conversations with national regulators.

“When I then talk to the German regulators or the European regulators, I can say that, look, this is the way it’s being done in the United States, in Singapore and India, and tell them how they are benchmarking against these kind of comparisons.”

This comparative knowledge transforms regulatory conversations from abstract debates to evidence-based discussions about what works elsewhere.

Facilitating Meaningful Connections

Beyond documentation, GECA can connect platforms, institutions, and other stakeholders who might not otherwise find each other.

Karsten is particularly interested in connecting platforms with guarantee funds and development institutions that could validate projects for retail investors. Currently, these institutions focus exclusively on massive investments because they’re unfamiliar with crowdfunding’s operational model.

“We as GECA, what we can do is we can bring them together and give them a little bit more background information so that the step of interacting with the platforms isn’t such a big step anymore for them,” he explains.

This relationship-building addresses a consistent theme in global crowdfunding discussions: trust, transparency, and shared understanding enable collaboration more effectively than regulation alone.

The Consolidation Question: Platforms Merging Toward Maturity

Looking ahead five years, Karsten predicts both growth and consolidation in Europe’s crowdfunding landscape.

“I do think there is right now a process where platforms are merging and consolidating, but this is normal,” he observes. When ECSPR launched, many platforms rushed to obtain licenses. But operating a successful equity crowdfunding platform requires more than licensing and software -it demands building and maintaining an investor community, which is challenging and resource-intensive.

“It’s all about building that community of investors and that’s challenging,” Karsten emphasizes.

This consolidation shouldn’t be seen as failure, but as the industry maturing. Larger, well-capitalized platforms with established investor bases are better positioned to pursue cross-border opportunities and weather economic cycles. Meanwhile, specialized platforms serving specific niches or regions will continue thriving where they offer unique value.

The institutional collaboration Karsten envisions will accelerate this maturation. The European Commission’s current leadership is actively working to mobilize private capital through public funding mechanisms—a policy direction that will benefit crowdfunding platforms positioned to facilitate these blended finance approaches.

A Realistic Ambition: Platform Collaboration Examples and Regulatory Dialogue

Despite the ambitious €1 trillion target, Karsten maintains measured expectations for GECA’s near-term impact:

“Hopefully we see at least like a couple of dozens great examples of platform collaborations – like for joint financing rounds, where the platforms finance the same startup, maybe through an SPV which is being set up in each jurisdiction and that contributes to the same startup in the end.”

Even more fundamentally, he’d consider it a success if GECA creates space for regulators and platforms to engage across borders: “If we have created this dialogue, I think this would be also a perfect outcome for our very ambitious agenda.”

This reflects wisdom gained from Europe’s experience. Regulatory harmonization is a long-term project requiring patience, evidence, persistent advocacy, and relationship-building. Quick wins matter less than establishing the infrastructure for ongoing collaboration.

“With a network that you’re building, I also have a really positive feeling about this because there’s so many competent, and knowledgeable and energetic people there,” Karsten says of GECA. “It’s fun to be part of GECA.”

Lessons for the Global Crowdfunding Movement

Karsten’s journey from Obama campaign volunteer to European regulatory architect offers several takeaways for anyone working toward borderless crowdfunding:

Start with scenarios, not solutions. The European Commission’s four-scenario framework allowed stakeholders to debate trade-offs explicitly rather than defending entrenched positions. This approach could serve other regions well.

Transparency drives improvement. Simply documenting and comparing regulatory approaches – licensing timelines, costs, interpretation differences – creates competitive pressure for improvement without requiring formal enforcement.

Local ownership matters. While harmonization is valuable, regulators who feel ownership over their crowdfunding industries will be more engaged, responsive, and effective than those simply implementing external mandates.

Connect practitioners and researchers. Evidence-based policy requires platforms to share data and researchers to access it. Creating venues for this exchange strengthens the entire ecosystem.

Think in steps, not leaps. Platform collaborations can happen now. Framework recognition comes next. Passporting follows. Full harmonization is a long-term goal. Each step creates conditions for the next.

Build relationships before you need them. Karsten’s monthly working group has been meeting since 2015-2016, creating trust and shared understanding that proved invaluable when ECSPR implementation challenges arose.

Measure what matters. The EDFA report benchmarks regulatory performance, creating accountability and highlighting best practices. Global crowdfunding needs similar measurement frameworks.

The Role of Ambition in Building New Systems

There’s something notable about articulating a €1 trillion goal when Europe’s current crowdfunding volumes are orders of magnitude smaller. It could seem unrealistic – until you consider that audacious goals serve crucial functions.

They orient effort toward growth rather than merely managing existing systems. They justify the hard work of regulatory reform, platform investment, and international collaboration. They attract talent and capital to an emerging industry. And they signal to entrepreneurs and investors that crowdfunding isn’t a niche alternative but a fundamental approach to capital formation.

Karsten’s three vision scenarios – the global quantum computing startup, the cross-border renewable energy project, the institutional-retail collaboration – serve similar purposes. They make abstract concepts concrete. They illustrate why harmonization matters beyond regulatory tidiness. They give platform operators, policymakers, and investors something specific to build toward.

Whether Europe reaches €1 trillion in five years, ten years, or ever isn’t the point. The point is choosing an ambition that, if achieved, would represent transformation rather than incremental change.

Toward a Truly Global Ecosystem

The Global Equity Crowdfunding Alliance exists because people like Karsten Wenzlaff believe the current system – where promising companies struggle to access capital beyond their home markets and investors can’t support innovations happening elsewhere – can and should be different.

Europe’s experience demonstrates that change is possible but difficult. It requires patient coalition-building, evidence gathering, regulatory education, and persistent advocacy. It demands willingness to compromise on details while protecting core principles. It benefits enormously from platforms sharing knowledge rather than hoarding competitive advantages.

Most fundamentally, it requires people willing to invest time and energy in collective goods – harmonized regulations, shared research, convening spaces, relationship infrastructure – that benefit everyone rather than just themselves.

Karsten’s decade of work building Germany’s crowdfunding association, shaping European regulation, connecting researchers and practitioners, and now contributing to GECA’s global mission exemplifies this kind of leadership. His insights reveal both how far crowdfunding has come and how much further it could go.

The question facing the global crowdfunding community isn’t whether a borderless ecosystem is theoretically possible. Europe has already proven the basic model works. The question is whether enough people in enough places will commit to the collaborative, evidence-based, relationship-intensive work required to extend that model globally.

Based on conversations like this one – where experienced practitioners candidly share lessons learned, acknowledge challenges ahead, and articulate practical pathways forward – there’s reason for optimism.

The movement toward truly global crowdfunding has begun. With platforms connecting across borders, regulators learning from each other’s experiences, and organizations like GECA creating infrastructure for collaboration, the pieces are coming together.

As Karsten observes: “The challenges of global crowdfunding are very complex, but they’re also solvable when people come together to share their knowledge, their expertise, and align their efforts.”

That’s not just a vision. It’s an invitation.

About the Author

Andy Field is Steering Committee Lead of the Global Equity Crowdfunding Alliance (GECA), an international organization working to create a borderless global equity crowdfunding ecosystem through industry collaboration, regulatory alignment, and knowledge sharing.

About Karsten Wenzlaff

Karsten Wenzlaff is Secretary General of the German Crowdfunding Association, Research Director at the European Digital Finance Association, and a member of GECA’s Steering Committee. He played a pivotal role in designing and implementing the European Crowdfunding Service Providers Regulation (ECSPR) and has been instrumental in connecting crowdfunding platforms with academic researchers. He teaches alternative finance and organizes the International Conference on Alternative Finance Research.

Listen to the Full Conversation

This article is based on Episode 11 of the GECA Podcast. Listen to the complete conversation with Karsten Wenzlaff:

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The Global Equity Crowdfunding Alliance brings together platforms, associations, regulators, service providers, and other stakeholders working to create a truly borderless crowdfunding ecosystem. Learn more about our mission and how to get involved at thegeca.org.