top of page
  • Bartłomiej Dmitruk

VDR SECUDO as a professional tool supporting the crowdfunding process

Investment crowdfunding has recently become a very fashionable form of investing for individual investors. The lack of a legal definition of the concept of investment crowdfunding has resulted in the emergence of doubts on the part of investment crowdfunding platforms as to the compliance of their activities with the provisions of the law or the scope of legal and regulatory requirements that must be met in connection with the conduct of such activities.

These doubts were described and analyzed by the Polish Financial Supervision Authority (UKNF), inter alia in the position of the PFSA Office on the definition of the service of offering financial instruments contained in Art. 72 of the Act of July 29, 2005 on Trading in Financial Instruments of March 29, 2019 and the Position of the Polish Financial Supervision Authority on the principles of operation of the so-called investment crowdfunding platforms of April 9, 2020.

Definition of crowdfunding and crowdinvesting

Crowdfunding has been defined, among others, by in the European Commission Communication of 14 March 2014 as crowdfunding essentially referring to an open call to the public to raise funds for a specific project. Most often, such invitations are published and disseminated via the Internet and are only valid for a specific period of time. They make it possible to reach a wide group of people and constitute an offer of involvement in the project by transferring funds for a purpose specified by the organizer. However, there is no legal definition of this concept.

A variation of crowdfunding is investment crowdfunding / crowdinvesting, i.e. where the activity of the entity running the so-called the crowdfunding platform is implemented for companies acquiring capital by issuing securities (e.g. shares or bonds), there are also situations when shares in a limited liability company are distributed in this way.

Offering process in investment crowdfunding

Crowdinvesting platforms offer the possibility of investing in projects and companies that are most often looking for seed funding to implement their idea, giving away some ownership in the form of shares or stocks. The form of crowdfunding investments takes place on the basis of an offer conducted by specialized platforms that are responsible for the entire process of preparing the company / issuer as well as information and offer documents.

It should be noted that the shares may be offered by the issuer on their own or by a brokerage house, regardless of whether the offer is private (up to a maximum of 149 investors) or public. This means that a crowdinvesting platform without a brokerage license cannot formally offer shares in the issuer's company and pay particular attention to the division of competences between the issuer and the issuer and / or the offering broker if involved in the process. The position of the KNF Office indicates in particular that a crowdfunding platform that is not authorized to provide brokerage services referred to in Art. 69 of the Act on Trading, it should organize and conduct its activities in such a way that the actual activities it undertakes do not fall within the scope of activities qualified as the provision of an offering service.

Virtual Data Room SECUDO as a platform supporting the process of offering and conducting crowdfunding investments

The investment crowdfunding process can be divided into several main stages:

1. preparation of the issuer's company / project for the capital raising process;

2. the process of offering and promoting the company / project to investors along with the allocation of shares to individual investors;

3.conducting investor relations with investors during the project / investment;

4. documenting the process of offering and obtaining capital as part of investment crowdfunding for the needs of regulators.

Preparation of the company / project to raise capital

The process of preparing a company / project to raise capital in the form of investment crowdfunding usually requires the involvement of many advisers (crowdfunding platform, legal advisers, brokerage house, IR / PR agency) and preparation of offer documentation and materials promoting the offer. Work on this stage also requires a huge commitment of the originators (company or project owners). This process can be compared to preparing the company for sale (M&A and related due diligence) or entering the public market (IPO). Final information documents and presentations are prepared on the basis of data and documents received from the company and advisers. This usually requires adequate confidentiality and secure communication. Therefore, these works can and should be successfully conducted in a professional Virtual Data Room, such as VDR SECUDO.

We wrote in detail about the advantages of conducting the due diligence process in Virtual Data Room SECUDO some time ago on our blog:

Offering a company / project as part of investment crowdfunding and closing the investment process

Offering shares in a project is a process that requires confidentiality, discipline and full control on the part of the offeror or the company. In Virtual Data Room SECUDO, you can carry out such a process in one place, having it fully under control. Starting with documents and information that, after preparation, are to be made available to investors, through the process of securing these documents (encryption, watermarks, several levels of permissions and sharing options) and the process of inviting investors and monitoring their number, especially in the case of an offer addressed to a maximum of 149 investors . In VDR SECUDO, you can conduct and monitor the entire process on an ongoing basis. Communication with investors during the offering process, the possibility of asking questions in the Q&A module and placing orders - all this can be documented and saved permanently in VDR SECUDO.

Due to the more and more similarities and potential regulations on the part of the UKNF, we suggest you read the entry on our blog regarding the use of VDR SECUDO in the processes of offering on the public market, such as IPO or SPO:

Maintaining investor relations with investors acquired as part of investment crowdfunding

Conducting investor relations in a company that has acquired individual investors as part of investment crowdfunding is often more difficult than investor relations in a public company listed on the stock exchange. Very often, these investors have a series of questions to the owners of the company and want to have close or direct contact with the management board. In the case of several crowdfunding rounds, the number of investors increases and the scale of communication grows. The entire process can be carried out very well with the use of VDR SECUDO, providing all investors with information and documents and preparing such moments in the company's life as the general meeting of shareholders or shareholders.

More on investor relations in VDR SECUDO as part of the entry on IR in a public company:

Documenting the process of offering and obtaining capital as part of investment crowdfunding for the needs of regulators

There is no doubt that investment crowdfunding will be regulated in detail sooner than late, and the positions of the EU Commission clearly indicate the direction of these regulations. Bearing in mind the increasing requirements for professional participants of the capital market (brokerage houses, banks, funds), it is worth getting ready for proper documentation of crowdinvesting. And again, the Virtual Data Room SECUDO can be used in a special way when properly documenting the process of preparing a transaction, offering and running an investment project together with investors obtained in the investment crowdfunding process.

VDR SECUDO monitors and records all activities that have taken place in the system. Starting with users, granted permissions, documents and activities on documents, all activities are put in the history of events and the project administrator has unlimited access to them. In addition, in order to meet technological changes, VDR SECUDO allows you to record all project activity on the so-called a durable medium, prepared in the blockchain technology.

The process documented in this way can be archived and transferred at any time for the needs of the regulator, audit or as part of another review or control.

We write more about the durable medium in blockchain technology and its use in VDR SECUDO in a separate post on our blog:

About us

DealDone is a specialized company that offers high-quality products in the field of information and data security. The DealDone team consists of people with many years of international experience in investment banking, investor relations, technology and cybersecurity. We offer services and software in the field of modern technologies for the circulation of confidential information, classified information, sensitive data and digitization, security, encryption and sharing of data and documents inside and outside the organization.

DealDone independently developed and introduced for sale the Virtual Data Room SECUDO solution. VDR SECUDO is a platform for secure exchange and processing of confidential information offered in the Software-as-a-Service model for business clients, in the form of virtual data rooms.


bottom of page