The law applicable to cross-border investment-based crowdfunding: contractual obligations

For a long time, small and nascent businesses have encountered difficulties in attracting external funding through bank loans or equity capital. Online crowdfunding may provide a viable alternative to these traditional modes of financing. The rise of the platform economy, however, has sparked a debate on the legal and regulatory challenges that these technology-enabled services bring in their wake. This article aims to assess whether such challenges extend to the area of private international law insofar as it concerns cross-border investment-based crowdfunding. The primary problems in cross-border crowdfunding are the result of legal fragmentation. Platform operators as well as fundraisers may be subject to a variety of different laws mostly resulting from the different private international law connections that exist for professional and retail investors. In an effort to ensure uniformity and future transferability of, for example, shares and bonds, the article argues that a single law should be applied to all contracts concluded as a result of an offer via the crowdfunding platform