Spanish government backs down on crowdfunding limits
Leaked laws would have hamstrung Spanish innovators by cutting off 80% of their funding, but the ecosystem showed power and resilience to force a government climb-down.
The proposed legislation plotted to cap individual investments in startups at €3,000 per project and prevent investments of more than €6,000 on a single platform each year. The limits were expected to be applied to both crowdfunding and peer-to-peer loans.
However, 12 Spanish startup associations joined forces to present evidence of the damage such a law would do: providing stats to show that the caps would cut startup funds by as much as 80% and eliminate 40% of investors from the ecosystem.
Business experts also rallied to the cause. Speaking to Crowdfund Insider, IE Business School professor Enrique Dans slammed the government's approach which, he says, "will block the possible potential and development of a financial ecosystem [and] stifle creativity and new ideas, in all likelihood prompting a brain drain to other countries with more enlightened approaches."
Despite the government U-turn on the sweeping caps, a €1million limit on crowdfunding projects, and limits for investors with an income below €100,000, will remain in place: meaning that young Spanish Davids still face a fight to change government attitudes.