The Legal Nature And Legal Supervision Of Equity Crowdfunding

As an important mode of crowdfunding,equity crowdfunding refers to the financing mode in which initiators publish projects on internet to raise funds,in return investors obtain benefits in form of equity.The demand on domestic investment and financing has increased rapidly,with quick development of net technology the mode of equity crowdfunding has spread fast in China.Despite its considerable scale equity crowdfunding has not yet been incorporated into Securities Law in China.The private offering has limit on number and accreditation of investors,which run counter to the nature of crowdfunding,thus restricted its advantages of efficiency and low cost.The absence of regulation has caused great uncertainty.In fact,the financing mode of some so called "crowdfunding platforms" is more closer to private placement.Some other raise funds via public offering,running the risks of illegal fund-raising.To foster the growth of start-up enterprises,and to promote the formation of multi-level capital market,the constitution of legal system concerning equity crowdfunding is imminent.By using method of comparing analysis,this article analyze the advantages and risks of equity crowdfunding based on its legal nature.Equity crowdfunding regulation is the game of efficiency and security.In keeping the balance between investors' safety and issuers' interests,the JOBS Act has provided meaningful enlightenment.In the last part,this article put forward some suggestions on the legal system of equity crowdfunding.The article is divided into four chapters:chapter one gives the overview of equity crowdfunding.In this part different modes of crowdfunding are introduced.By reviewing the legal progress of equity crowdfunding,this article tries to define the new financial instrument.According to the current economic situation in China,chapter two clarifies the significance of equity crowdfunding to both financing side and investor side,and points out advantages and risks of equity crowdfunding in the light of its legal position,which provides support for the suggestions part.Chapter three sorts out JOBS Act for provisions concerning equity crowdfunding:Equity crowdfuning is not the blind pursuit of financing efficiency.Besides registration exemption,there is a series of measures to avoid information asymmetry.The last character introduces the status of the equity platforms in China,and analyzes the reasons from both legal aspect and business aspect.China should absorb the merits of foreign laws,and bring equity crowdfunding into the framework of the securities law as soon as possible.