A comparative analysis of US and EU regulatory frameworks of crowdfunding for the cultural and creative industries

Abstract

In the face of the dramatic shrinking of public and private funding, the arts, culture and creative industries are increasingly relying on crowdfunding (CCCF). Furthermore, crowdfunding is relevant for its informative, promotional, co-creative and democratizing features. Yet CCCF is still a fragmented and below-potential market. Main reasons for this untapped potential include a lack of transparency and trust affected by national regulatory frameworks. We first assess the series of benefits and barriers of CCCF, and we propose and estimate a simple model of startup firms raising capital, pointing to the importance of how CCCF is regulated. We then critically analyze and compare the regulatory frameworks that may enhance CCCF benefits and limit its barriers and risks in both the United States and the European Union. We finally suggest some policy recommendations and future research in this field.