Abstract
Recently, crowdfunding has caused a revolution in startups’ financing in Taiwan. Nevertheless, equity crowdfunding is highly regulated by Taiwan’s securities laws, so it seems that running a project of equity crowdfunding on a funding portal is prohibited now in Taiwan. In fact, through equity crowdfunding, startups, who traditionally have difficulty obtaining capital, could format capital on early-stage. The Jobs Act, enacted in 2012, focused primarily promoting capital formation and provided exemptions for companies to raise capital through equity crowdfunding. To consider the background of the Jobs Act, the articles in the Jobs Act seems reflect the idea of libertarian paternalism and keep the rules governing equity crowdfunding simple to nudge people. However, in Taiwan, there is “Go Incubation Board for Startup and Acceleration, GISA” which is similar to the equity crowdfunding but managed and leaded by GreTai Securities Market, a quasi-government organization. Furthermore, the rules regarding GISA were primarily designed to provide investor protection but not to promote capital formation. There is no doubt that rules cannot be implemented without a consideration of investor protection, but to balance these two goals is needed. This article is based on the experience of the Jobs Act, and takes the viewpoint of the stakeholders of equity crowdfunding into account to rethink the laws regarding equity crowdfunding and GISA in Taiwan. In the view of regulatory humility, laws regarding equity crowdfunding and GISA should nudge people and promote capital formation but would not unduly compromise investor protection.