Crowdfunding platforms under capital markets law

Crowdfunding is a financing method allowing entrepreneurs that need financing to reach large audiences and obtain funds. Due to technological developments, it became a preferable method to raise funds. With crowdfunding, entrepreneurs can reach out to investors and introduce projects through online platforms. Crowdfunding is regulated under capital markets law since capital market instruments such as shares and debt instruments can be given to investors in return for the funds raised. This study aims to discuss this new financing method and to explain the obligations and responsibilities of platforms, which have an important role in the crowdfunding process, within the framework of Turkish capital markets regulations. In the first part, crowdfunding concept and its differences from similar financing methods, reasons for specific regulations, crowdfunding models were explained, and information on the legislative developments in comparative law and Turkish law were provided. In the second part, crowdfunding platforms' incorporation, the conditions required for shareholders, board members and investment committee members were explained, and the transactions carried out by platforms were outlined. Additionally, legal status of crowdfunding platforms and investment committee were determined through reviewing the opinions in the doctrine. In the third part, the platforms' legal relationship with the crowdfunding parties and its liability were analyzed. Additionally, the legal nature of the agreements between the platforms and investors-entrepreneurs were evaluated and the laws applicable to the legal relationship between the parties were determined. Subsequently, the liability of crowdfunding platforms due to their activities under the Turkish crowdfunding regulations was analyzed.