Members of parliament have proposed removing legal barriers to equity crowd funding and allowing startups and entrepreneurs to take advantage of the alternative funding arrangement, whereby crowd investors acquire a small equity stake in the company. If the proposal is adopted, parliament would remove the legal obstacles and recognise crowd funding as a reputable and viable form of finance.
Parliament member Jakob Engel-Schmidt, a former head of the Danish Entrepreneur Association, is the driving force behind opening up equity crowd funding in Denmark.
“Danish banks are reluctant to provide risk capital,” Engel-Schmidt told trendsoline.dk. “Danish entrepreneurs cannot find the capital to realise their ideas. The government needs to allow crowd funding as a form of financing in Denmark.”
Forced to find funds outside of the country
Engel-Schmidt said that it was absurd that Danish entrepreneurs are forced to seek financing from Sweden and England.
“It is ridiculous that entrepreneurs need to raise funds abroad and I find it hard to understand why anyone would be opposed to a proposal that would create jobs and growth in Denmark”
Rewards-based crowd funding, where businesses give some type of incentive for participating, is already legal in Denmark.