NEWSLETTER-2017

227 CAPITAL MARKETS LAW Crowdfunding Platforms Crowdfunding Platforms are digital platforms where the entre- preneur and the project owner would meet with the investors and sup- porters in an electronic platform. The crowdfunding platforms would mediate all of the phases, from the application, including the payment mechanisms. Such platforms would not have any responsibility re- garding the realization of the projects and business opinions and appli- cations thereof 3 . As per the Draft Law, fund-raising through a crowd- funding platform is defined as the intermediary to the crowdfunding, and an entity serving in an electronic platform. Once the Draft Law is enacted, the respective enterprises will be obliged to obtain official authorizations from the Capital Market Board in order to operate. The Capital Market Board will additionally regulate secondary legislation regarding the establishment of the crowdfunding platforms, their shareholders, share ledgers, employees, upper limits to the funds to be collected from the public and from individual investors, the time period for a project to be announced for funding, and other required rules and principles. A New Alternative Funding for Entrepreneurs and the Importance of the Regulation Particularly following the global economic crisis in 2008, new entrepreneurs or the owners of projects in their preliminary stages have problems in terms of finding financing. Such innovative projects and business ideas, which are not implemented due to lack of financing, would not be able to substantially support the economic development. In addition to being an alternative financing method, crowdfunding provides many advantages to entrepreneurs. Principally, crowdfund- ing would test the market in terms of the project or the investment of the entrepreneur or the project owner and would determine the de- mand. As such, the risk undertaken by the entrepreneur or the project owner would decrease. Crowdfunding would check the salability and rate the investable level of the respective projects or the investments, and would further provide feedback, accordingly. Moreover, it would help in the marketing of the business opinion of the project, and would 3 Workshop Report, p. 8.