The Global Significance of Crowdfunding: Solving the SME Funding Problem and Democratizing Access to Capital

This Article provides a comprehensive review of the crowdfunding phenomenon. It argues that equity crowdfunding (ECF) and, to a lesser extent, peer-to-peer lending (P2PL) offer the possibility of a global solution to the small and medium-sized enterprise (SME) funding problem. In the United States, the SME funding problem is exacerbated by the markedly diminishing rate of startup formation, a factor that injects a degree of urgency into resolving the optimal means to implement ECF. Here, as with the fin-tech revolution, the law lags behind technological developments. The second main argument is that ECF enhances access to capital for SMEs globally while simultaneously democratizing access to investments for ordinary citizens. The Article begins by providing definitions, business models, and historical background before outlining the SME funding problem and new constraints on SME lending since the global financial crisis. ECF is placed within the so-called financing escalator and is distinguished from venture capital and angel financing. The global market for crowdfunding is reviewed in order to indicate growth trends in the sector. Some common legal issues associated with crowdfunding are presented before a review of crowdfunding globally. Dominant models in some Organisation for Economic Co-operation and Development (OECD)countries and the potential for crowdfunding to assist SMEs in the undeveloped world are explored. The conclusion outlines key considerations and choices for legislators considering the regulatory puzzles presented by crowdfunding

Corporate Governance Research on New Zealand Listed Companies

"The purpose of this article is to review and add to approximately fifty years of research on New Zealand listed companies from various disciplines. The main findings are not controversial, as corporate governance standards are high by international standards. To be sure, there has been a rolling set of corporate failures in the finance company sector since the global financial crisis--principally involving nonlisted finance companies issuing debt securities to the public--but these failures have been comprehensively addressed by recent legislative reforms. In this regard, the article will be of interest to corporate governance researchers seeking a topical review of corporate governance in a small, common law jurisdiction. A key commercial context, however, is supplied by the regional free trade agreement between New Zealand and Australia, the recent free trade agreement between Australia and the United States, and the (largely moot) free-trade agreement between New Zealand and the United States....As stated, this article comprehensively reviews and adds to extant research on corporate governance of New Zealand listed companies. It is crossdisciplinary in nature and considers legal, managerial, and accounting perspectives, as well as literature on corporate governance....We conclude that while corporate governance of listed companies was good, the same cannot be said for nonlisted issuers of debt securities. Here, poor corporate governance and supervisory failures were causal in the failure of nonlisted finance companies.

The Global Significance of Crowdfunding: Solving the SME Funding Problem and Democratizing Access to Capital

This Article provides a comprehensive review of the crowdfunding phenomenon. It argues that equity crowdfunding (ECF) and, to a lesser extent, peer-to-peer lending (P2PL) offer the possibility of a global solution to the small and medium-sized enterprise (SME) funding problem. In the United States, the SME funding problem is exacerbated by the markedly diminishing rate of startup formation, a factor that injects a degree of urgency into resolving the optimal means to implement ECF. Here, as with the fin-tech revolution, the law lags behind technological developments. The second main argument is that ECF enhances access to capital for SMEs globally while simultaneously democratizing access to investments for ordinary citizens. The Article begins by providing definitions, business models, and historical background before outlining the SME funding problem and new constraints on SME lending since the global financial crisis. ECF is placed within the so-called financing escalator and is distinguished from venture capital and angel financing. The global market for crowdfunding is reviewed in order to indicate growth trends in the sector. Some common legal issues associated with crowdfunding are presented before a review of crowdfunding globally. Dominant models in some Organisation for Economic Co-operation and Development (OECD)countries and the potential for crowdfunding to assist SMEs in the undeveloped world are explored. The conclusion outlines key considerations and choices for legislators considering the regulatory puzzles presented by crowdfunding