we have a conversation with Emil Kerimov, the founder of the Ektico project, who will share his experience and views on the current challenges in the crowdfunding industry. Emil has extensive experience in investment real estate and deep financial market knowledge, making his opinions particularly valuable. Below are the answers to what we believe are the most pressing questions in this field.
What regulatory barriers exist for crowdfunding platforms?
One of the main problems remains the complex and varied regulatory requirements in different countries. In the USA, for example, crowdfunding platforms must comply with SEC and FINRA rules, which require significant compliance costs and legal support. The European Union has the European Commission’s Crowdfunding Service Providers Regulation (ECSPR), which aims to standardize rules, but many local differences still create barriers to cross-border financing.
What issues are related to trust and transparency?
Crowdfunding attracts many novice investors who often lack sufficient knowledge to assess risks. This leads to increased vulnerability to fraud and unscrupulous projects. Issues with transparency and a lack of quality information about projects remain acute. Platforms must provide investors with access to complete and reliable information about projects to minimize risks and increase investment trust.
How do competition and differentiation affect the market?
As crowdfunding grows in popularity, so does the number of platforms offering their services. Competition for projects and investors is becoming fiercer, making it difficult for platforms to stand out and attract quality projects. Additionally, many platforms face the need for constant innovative development to remain competitive.
What risks exist and how can they be managed?
Investors often do not realize that crowdfunding is associated with high risks, especially in the case of startups and innovative projects. Platforms must implement effective risk management mechanisms and provide investors with adequate information about potential losses and risk minimization strategies.
How does economic instability affect crowdfunding?
Global economic fluctuations, such as the COVID-19 pandemic, affect the behavior of investors and projects. During periods of economic instability, fundraising becomes more challenging, and projects may face problems due to decreased investor interest in risky investments. Personally, I also faced serious difficulties during the pandemic. My investment real estate project received a wave of negativity due to delays and financial issues caused by the crisis. Despite successfully resolving all claims and settling conflicts, this experience left a bitter aftertaste.
What technical problems and security issues exist?
Cybersecurity remains one of the key issues in the digital economy. Crowdfunding platforms must ensure a high level of data protection for users and transactions to prevent leaks and cyber attacks. Technical failures and insufficient scalability of platforms can also negatively affect user experience and trust in the platform.
Conclusion
Despite the challenges listed, crowdfunding continues to be a powerful tool for raising capital, especially for startups and small businesses. To successfully overcome current challenges, more attention must be paid to regulatory issues, increasing transparency and trust, as well as developing effective risk management and technical security strategies. The crowdfunding industry has significant potential for growth, and companies capable of adapting to these challenges can expect a successful future.
