Crowdfunding in financing investment projects in Poland

What is the specificity of investment crowdfunding and what is its potential in the development of the capital market in Poland? These and other questions regarding social financing of investment and development projects were raised during the 173rd mBank and CASE Seminar.


Watch the recording of the Seminar (in Polish):


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Social financing of investment and development projects is a new method of gaining capital, and one that is fast gaining popularity, in which investors are recruited through crowdfunding platforms. In addition to the fast-growing role of crowdfunding, another reason for bringing up this subject is new regulations at the EU level, which took effect in November 2021.

The first presentation was by Marcin Czugan of the Association of the Financial Enterprises in Poland (ZFP), who spoke about the development of investment crowdfunding in Poland. This development was presented in the regulatory context – from the first attempts in 2017, which took on the form of a handbook of good practices, through the aforementioned European Parliament regulation, which took effect in November 2021. The presentation clearly showed the exceptionally fast growth of social financing of investment and development projects in Poland over the past five years, which justifies regulation.

Mr. Czugan also presented the structure of companies which thus far have used crowdfunding,   according to their legal form and the sectors in which this form of raising capital is most often used. Among these industries, the gaming sector stands out with 21.8% of value, along with cannabis (16.0%), which also demonstrate high levels of achievement of the campaign’s goals.

The next speaker, Jarosław Mizera of StockAmbit, discussed, from the perspective of an issuer, the practical side of the social financing process in the form of shareholder crowdfunding. Even though this form of raising capital has been chosen mainly by companies at an early stage of development, nothing would hinder more mature companies from using it as well. Increasing the share of more mature and experienced companies should be helped by new legal solutions, which improve the credibility of the entire process. Mr. Mizera described the benefits for companies of conducting a crowdfunding campaign in comparison to other forms of raising capital. Among the benefits he mentioned was the lack of a dominant investor, building an engaged investor community and promotion of the company. He also described what issuers should look at and how they should prepare for a public offering in a crowdfunding campaign.

The last presentation was from Michał Karwasiński of the law firm Karwasiński Szpringer i Współnicy, who compared the legal conditions from before the introduction of the European Parliament regulation to those coming into effect from November 2021. He also presented widespread opinions of the new EU regulations, which he believes are untrue. He pointed out that despite certain simplifications in comparison to typical brokerage services, the operations of crowdfunding platforms based on the new regulations may not be less regulated: the obligations on an entity that would like to receive a license are in fact relatively high. The procedures related to investor verification and disclosure obligations are also demanding. According to Mr. Karwasiński, the new regulations will certainly impose a new operating cost, but they may also offer an opportunity for development in areas of the market that until now have been inaccessible for crowdfunding platforms.

To conclude, the initiator of the seminar’s subject, Dr. Mieczysław Groszek, took the floor. He pointed out the problems with nomenclature and the potential distinction between investment crowdfunding with a typical business purpose and e.g. donation crowdfunding, for which profit isn’t primary or isn’t present at all. He also stated that it’s necessary to limit associations related e.g. to charitable activity or support based on sentiment in order to increase confidence in investment crowdfunding. In the end, Dr. Groszek asked each presenter one question, concerning whether the new regulations will increase investors’ sense of security, how the issue of withdrawing from an investment will look and thus how easy it will be to liquidate invested capital, and whether the regulators will make the crowdfunding model too similar to classic capital market solutions.