The paper "Equity Crowdfunding in Brazil: a closer look at recent regulatory development", authored by partner Gustavo Flausino Coelho and attorney Matheus Chagas Lamarca, was published in the Summer 2022 Corporate and M&A Law Committee eBulletin of the International Bar Association ("IBA").
The paper addresses the most significant changes introduced by the Resolution 88, issued by the Brazilian Securities and Exchange Commission ("CVM"), in the regulation of Equity Crowdfunding in Brazil and its possible impacts on the fundraising market for startups, such as:
(i) the expansion of the annual gross revenue limit eligibility criteria from R$10,000,000.00 (ten million Brazilian Reais) to R$40,000,000.00 (forty million Brazilian Reais) allowing a greater number of companies to access the equity crowdfunding mechanism;
(ii) the increase in the maximum aggregate amount that a small company can raise through equity crowdfunding offerings from R$5,000,000.00 (five million Brazilian reais) to R$15,000,000.00 (fifteen million Brazilian Reais);
(iii) the increase of the investment cap that individual non-accredited investors can invest in crowdfunding offerings over a 12-month period from R$ 10,000.00 (ten thousand Brazilian Reais) to R$ 20,000.00 (twenty thousand Brazilian Reais); and
(iv) the possibility for platforms to create secondary markets of securities of the invested companies after the crowdfunding offer, with the intermediation of peer-to-peer transactions in the digital environment of the platform, giving liquidity to the participation acquired by investors.
The eBulletin is a periodic publication held by the IBA Corporate and M&A Law Committee to promote important topics on Corporate and M&A. The Summer 2022 eBulletin received nine articles from various jurisdictions covering a wide range of very topical corporate and M&A issues, which can be accessed here.
The article is available on the IBA website at the following link: https://www.ibanet.org/equity-crowdfunding-in-brazil
Bastilho Coelho Advogados