The Turkish Capital Markets Board (SPK) prepared a regulation on the principles and procedures regarding share-based crowdfunding to facilitating easier access to financing for entrepreneurs, small and medium-sized enterprises (SMEs), offering them an alternative financial resource other than the conventional banks.
According to an SPK statement on the communique on Share-Based Crowdfunding published in the Official Gazette yesterday, the legal infrastructure is being prepared for the introduction of crowdfunding, which has become widespread all over the world, in Turkey. With the communique on the crowdfunding authorized by the SPK following the legal regulations in 2017, startup ventures will be able to raise money from the public to meet their capital needs, the statement further read.
The statement noted that entrepreneurs and individual investors would meet on a platform over the internet, stressing that only the platforms that the SPK authorized and included in the list could mediate the crowdfunding process. It was noted that not every startup would benefit from crowdfunding. "Startups that will be reviewed by investment committees, which will be formed by the intermediary platforms within their bodies, and which meet the criteria, will be able to raise funds," the SPK statement added.
"Besides, to limit possible losses, investors will be able to invest up to TL 20,000 within a year. This limit can be increased up to TL 100,000 depending on the income level of the investor. Thanks to rules and controls that protect the rights of investors, people can be prevented from falling into the trap of Ponzi schemes," the statement said.
It also pointed to access to finance as one of the biggest challenges experienced by entrepreneurs starting up new businesses, adding that entrepreneurs who could not find suitable loans from the bank could access the financing they needed thanks to crowdfunding.
Individual investors would also be able to combine funds in small amounts that could not have a significant impact on their own, thus enabling a company to be launched, the statement continued, suggesting that investors would have the opportunity to become a partner of a company with the potential for development in the startup stage.