April 24th, 2017
French Startups Can Now Raise Up To $1.4 Million In Crowdfunding And Syndicates In France
The crowdfunding rules in France will become startup-friendlier in the coming months. The government announced today that companies will be able to raise up to $1.4 million (€1 million) per Kickstarter-like crowdfunding campaign. The same limit will apply to equity crowdfunding (also known as AngelList-style syndicates) — startups will be able to raise up to $1.4 million per year without having to notify the financial markets authority.
Previously, equity crowdfunding was limited to $140,000 (€100,000) and your company couldn’t be an SAS (the French equivalent of an LLC). And if you raised more than $140,000, you had to work with a lawyer to produce hundreds of pages of legal documents. With the new law, as long as you raise less than $1.4 million in an equity crowdfunding round, you only have to file a short document of 3 or 4 pages.
Investors have been anticipating the new law for months. Back in September, the government presented a half-baked law with a very low limit of $410,000 (€300,000) — the government had to go back to the drawing board.
View: Frequently asked questions of Equity Crowdfunding in Canada for portals, issuers and investors
There are a couple of restrictions. When it comes to Kickstarter-style crowdfunding, individuals won’t be able to invest more than $1,400 in a campaign (€1,000). This will prevent, or at least limit, potential disappointment from over-promising campaigns. This only applies to French crowdfunding platforms, such as Ulule, KissKissBankBank and My Major Company.