Equity crowdfunding in Ukraine: the proposal of legal solutions at the background of regulations in the selected countries

Abstract

Motivation: The capital market developing in Ukraine is not capable of filling the capital gap for innovative ventures presenting high risk of failure, therefore equity crowdfunding can be perceived as a significant alternative offering a source of funding for enterprises, primarily in relation to the development of initiatives and projects, the value of which has not yet been verified by the market (the so-called startups). At the same time, it should be remembered that one of the important factors responsible for the development and popularization of crowdfunding in a particular country is the development of the explicit crowdfunding regulation. Aim: The aim of this article is to propose legal solutions dedicated to ECF in Ukraine, developed based on the analysis of legal regulations in the selected countries. The model of legal regulations proposed by the authors was assessed by the experts from Ukraine. The study consisted in an expert assessment of the suggested model solution being the result of legal regulations regarding the functioning of crowdfunding in the selected countries worldwide, an identification of the desired changes in legal regulations in Ukraine, and the assessment of the potential for the development of equity crowdfunding as the source of funding for the Ukrainian companies. Results: The results of the conducted research show that as many as 90% of the Ukrainian experts agreed with the proposed legal solutions dedicated to equity crowdfunding and described the developed legal model as suitable for the Ukrainian market. At the same time, the vast majority of respondents (85%) acknowledged that the scope of regulations proposed in the model is appropriate, without indicating the need for introducing regulations in other areas.