Start-Up Funding Platforms: Need For A Robust Regulation

1. Introduction

The landscape for equity investments in start-ups has evolved drastically over the past few years. While traditionally such investments have been dominated by venture capitalists and angel investors, the emergence of fund-raising platforms are providing retail investors easy access to participate in start-up funding. Labelled as 'equity based crowdfunding' platforms, start-ups and small and medium sized enterprises ("SMEs") utilise such crowdfunding platforms to solicit small amounts of funds from many individual and organisational investors in consideration of equity instruments of such entities.

Such model of funding has its own unique characteristics and benefits. On one hand, not only does equity based crowdfunding provide for a new mode of financing and creatively utilise the advancements in technology to satiate the need for funding through alternative sources, it also allows start-ups and SMEs to raise capital in a more efficient and