Is Europe’s equity crowdfunding sector sleepwalking into redundancy? ESMA’s 2024 market data shows performance in terms of deal volume and value remains low, with 181 ECSPR licensed platforms across 21 the EU raising just over €4.25 billion in total, of which only 12%, or around EUR 510m, went via equity investments into some 820 SME (ESMA 2025). In comparison, the European venture capital sector invested around EUR 7bn into some 4,200 Seed and Start-up stage companies in 2024 (InvestEurope 2025). The average deal size is the difference for now. EUR 620,000 versus some EUR 1.6m, respectively.
There has already been a trend for platforms across member states to move from self identifying as crowdfunding platforms to “digital investment” or even “venture capital” player, dropping the term “crowdfunding” from their name and public representation. This is purely cosmetic but likely in response to lack of investor alignment, for example with angel networks and private investors with deeper pockets. Venture capital, after all, has become “cool” again lately, even though there is no data available that would suggest any change in its impact performance. In 2024, for example, Venture Capital exits were to just under 30% write offs, nearly one third of investments failed, and a similar amount was simply repayments of prefered shares or mezzanine. That is nearly 60% of all exits in that market. Only 4% were sold in an IPO, 9% to another venture capital fund, 2% to another financial institution and 7% back to management.
The data speaks for itself
There are opportunities for equity crowdfunding to create a clear value proposition to investors. The European Union Intellectual Property Office’s IP Backed Finance Report 2026 lays bare the continent’s crippling inability to finance its intangible economy. This is as much a problem in staying competitive against the US and China as it is an opportunity. And still, the European Crowdfunding Service Providers Regulation ecosystem remains stubbornly disconnected from the asset class that could define its relevance: intellectual property.
The numbers are stark. EUIPO estimates that Europe could mobilise €70 to 150 billion annually if its financial infrastructure adapted to IP backed finance. With appropriate disclosure, valuation and risk sharing infrastructure, IP backed instruments could realistically mobilise €30 to 120 billion annually in new financing flows. Over a ten year horizon, this translates into €150 to 580 billion of additional mobilised financing, with a cumulative GDP impact estimated between €70 billion. Yet ECSPR platforms, the regulatory framework theoretically best positioned to bridge this gap, have shown little appetite for the challenge. The result is a sector at risk of declining into irrelevance, ceding innovative SME finance to the same old networks of wealthy individuals and risk averse fund managers.
Perfect Tools, Poor Adoption
ECSPR was designed for this moment. Cross border by regulation, digital by design, and unburdened by the capital constraints that make banks allergic to intangible assets, crowdfunding platforms possess the structural advantages to pioneer IP backed finance. They can integrate standardised IP disclosures, leverage community driven valuation models, and mobilise both retail and professional capital, exactly the architecture EUIPO’s report identifies as necessary.
Yet the sector’s response has been tepid at best. Despite extensive engagement between Eurocrowd and EUIPO throughout 2024 and 2025, ECSPR platforms remain largely indifferent to IP’s potential. Lack of expertise, lack of The consequences are becoming clear: ECSPR is failing to evolve beyond a niche equity market into the innovation finance backbone Europe desperately needs.
The Cost of Inaction
What happens when a financial ecosystem ignores 90 percent of enterprise value in high growth sectors? Nothing good. The study explicitly states that intangible assets are now responsible for some 90 percent of all business value. And yet, SMEs with strong IP portfolios continue to struggle for finance in the early stages.
Foreign investors already dominate late stage funding. And some of the promising companies relocate to jurisdictions where intangible assets are understood and financed. JRC data shows that between 3.3 and 4.3 percent of European VC backed startups relocate abroad (JRC 2026), with almost three quarters heading to the US. In Central and Eastern Europe, nearly half of all scaleups have moved their headquarters outside the region to access deeper capital markets.
The irony is biting. ECSPR was meant to democratise finance. Instead, it risks reinforcing the status quo: innovation funded by the few, for the few. And Europe’s crowdfunding sector seems to be set to become a small actor in its own niche innovation economy, while traditional finance, with its preference for physical collateral and short term returns, maintains its stranglehold on growth capital.
The Market’s Resistance to Adapt
Not to adapt to IP Backed Finance might be self defeating, at least if you care for deal flow from high growth potential SME is key innovation markets with significant intangible assets, especially since follow-on funding for good performers is lining up in form of professional growth investors.
- For platforms, ignoring IP means missing an entire asset class and the high quality, innovation driven issuers that come with it.
- For retail investors, it means forgoing early access to the deep tech, AI, and biotech firms that will define Europe’s competitiveness.
- For SMEs, it means continuing to rely on personal guarantees or equity dilution because the system can’t value what they actually own.
Worse, inaction would undermines broader European priorities. The Savings and Investment Union agenda, meant to channel household savings into productive investment, will falter without mechanisms like ECSPR to direct capital toward innovative firms. Crowdfunding is one of the few systems capable of mobilising retail capital as SME direct investment cross border at scale.
Up for grabs
The EUIPO report isn’t just a policy document. It’s a diagnosis. Europe’s financial system is structurally unprepared for an intangible economy. ECSPR crowdfunding isn’t just compatible with the solution. It’s essential to it. Yet the market’s disconnect from IP value suggests a deeper problem: a lack of urgency, a resistance to change, and a failure to recognise that the future of SME finance is already here.
Tats into the hands of the same elitist networks that have always controlled it. The tools are in place. The need is evident. What’s missing are the actors, the will and the capacity.
Disclaimer: Eurocrowd is a member of the EUIPO Ideas Powered for Business Network
