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Spanish government backs down on crowdfunding limits

Written by Jessica Hashemi Friday, 30 May 2014.

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.

shutterstock 191838713The 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.

Click here to read this article in Spanish.

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About the Author

Jessica Hashemi

Jessica Hashemi joined entrepreneurcountry in December 2013 as the content manager, after graduating from the University of Leeds with a degree in English Language and Literature. Her current responsibilities include managing the entrepreneurcountry website and online articles, as well as creating a weekly newsletter for investors and entrepreneurs.
Her main priorities are to search for, and find, unique and intelligent contributors, assisting them in the construction of informative and relevant articles as well as promoting them through social media channels.
With a background in writing, social media, travelling, and student led startups, Jessica occasionally contributes her own pieces to entrepreneurcountry as well as maintaining the site.



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