The ROC Strikes Back At The Crowd Funding Model

Start-ups and small companies in India are always on the lookout for viable sources of capital. At the same time, small investors are interested in diversifying their portfolios and betting on promising new ventures. This has led to the mushrooming of many platforms offering companies an opportunity to connect with investors to crowdsource their funding goals.

Equity crowdfunding is not explicitly regulated under Indian law. In light of this, the platforms have taken a considered view that so far as they and the companies using them comply with the provisions of the Companies Act, 2013 and the applicable SEBI regulations, their activities would be permissible. Afterall, most such platforms merely act as technology intermediaries connecting the investors and the companies with each other.