Brazilian Equity Crowdfunding - Trajectory, reality and future

 
Are we prepared for collaborative investment? Will Brazil be able to undo its bureaucratic ties to facilitate equity crowdfunding? Such inquiries initiated debates between jurists and enthusiasts of collaborative investment and the shared economy.
 
Among the challenges, the biggest one was the breaking of the paradigm that only joint stock companies can issue securities, demystifying the realization that there is no sense in thinking about equity crowdfunding for a limited company.
 
To circumvent this mantra, alternative forms were developed by lawyers, having designed hybrid securities issued by limited companies, which, with convertibility, bind the investor to the issuing company without necessarily adhering to the business risks.
The first borrowings based on these securities took place in 2014, with the exemption from registration by the CVM for some public offerings of convertible debt securities, where issuers distributed such securities without the intermediation of financial agents through collaborative investment platforms.
 
In 2015, a new horizon was opened for equity crowdfunding, with the CVM waiving the registration of the first public offering of a convertible collective investment contract, which in turn was backed by limited company shares, bringing together a group of investors on the rules of a same title, allowing the investor to participate in the results of the invested company, even before the conversion.
 
Regarding the bureaucratic knot, it is already in the process of unraveling. There are regulatory movements that seek to improve the rules applicable to the case, the main one being the regulatory framework of the activity within the scope of the CVM. The Municipality has already signaled that it is writing the draft of the normative instruction, which will be submitted to the public hearing in 2016.
 
With regard to legislative power, the reform of the Statute of Micro and Small Enterprises brought sophistications that favor a scenario of investment and capital injection in micro and small companies, while also enabling their access to the Brazilian capital market. The final text was approved in the first round in the Chamber and is currently being processed by the Senate.
 
With the promulgation of these normative advances, a scenario of legal certainty is certain to encourage the involvement of the other agents that integrate the securities distribution system, which due to their relevance and operational reach can drive the consolidation of investment operations via equity crowdfunding and contribute to the development of the Brazilian capital market.
 
In view of these four years of walking, much has been discussed and concluded, and that all these efforts have broken down barriers. Regarding the questions that opened this article, yes, we are prepared for collaborative investment, and yes, Brazil is capable and is already getting rid of bureaucratic bonds to facilitate equity crowdfunding.