Abstract:

Equity crowdfunding (ECF) for investments is becoming a popular way to raise external funds for small businesses and Startups. As the main financial actors, such as the traditional banking system, stock markets, venture capitalists and angel investors, find it difficult in addressing the funding needs of SMEs and entrepreneurs. We also contend that India has the potential to create an ECF ecosystem to provide financing to entrepreneurial enterprises. The ECF ecosystem's credibility depends on investors' willingness to join, ECF platform setup, and entrepreneurs. To adopt ECF, an economy must be knowledgeable in the ecosystem, have support from communities and regulatory bodies, and also have the government's interest in supporting new initiatives. We investigate India's law and order. Equity crowdfunding legislation in India also synchronises with other legal regulations and permits some exemptions. This would enable start-ups and SMEs to get finance and create scalable employment for Indian youngsters, boosting the economy. It will be advisable to have a tailored legal framework that facilitates ECF as an alternative for entrepreneurs to finance to start their companies through proper awareness and careful differentiation of business needs in India. The report concludes that regulatory harmonisation is crucial to developing a crowdfunding-based business environment

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