Background information

This measure establishes crowdfunding as a legitimate alternative to the traditional loan finance for start-ups and SMEs to access funding. The alternative financial instruments included in the act are stocks, bonds, shares in companies and cooperatives, participation rights, silent partnerships and subordinated loans.

Funding - National government: Legal framework and monitoring of compliance with the act.

Content of measure

The Act raises the threshold for publicly sourced funding from €200,000 to a maximum of €1.5 million, which means issuers will only have to draw up a simplified prospectus for loans up to these amounts. However, the maximum investment amount per private investor may not exceed €5,000 within 12 months.

SMEs which:

• employ fewer than 250 employees; and

• have an annual turnover not exceeding €50 million; or

• have an annual balance sheet not exceeding €43 million.

SMEs are not eligible when they have a concession pursuant to the Austrian banking act, the securities supervision act 2007, the alternative investment fund manager law, the payment services act, the insurance supervision act or the electronic money feature.

In 2018, the 'alternative financing act' has been adapted. The threshold for the law to apply has been raised to €2 million within 12 months.

Examples: Crowdfunding Examples (Donation and Reward): Küche am Graben, Kaahée, Mesnerhof-C, Magdas Hotel; Crowd-Investing-Examples: Alm-Resort Nassfeld, Kinderhotel Rudolfshof, Thermenhotel KUrz, Gasteiner Bergbahnen (Bank and Schopper 2017).

Use of measure

As the Federal Ministry of Digital and Economic Affairs has stated in a press release (see OTS ) in September 2018, a total of 342 projects have been realised in the area of crowdinvesting. Until the end of 2017, the project volume has reached € 65,8 Million. For the first half year of 2018, an additional € 18,2 Million has been allocated with the help of this instrument.

This act is the first of its kind in Europe. The OECD (2016) has reported that such measures have the potential to boost entrepreneurship and corporate investments.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Start-ups	Does not apply to citizens

Actors and funding

Actors	Funding
National government Company / Companies	No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Unknown

Involvement

Unknown

Views and reactions

Unknown

Sources

• 01 June 2015: AMS research network, economic report 2015 (www.forschungsnetzwerk.at)
• 14 August 2015: BGBL No. 114/2015 - Alternative financing act - AltFG (www.ris.bka.gv.at)
• 01 January 2016: OECD (2016), Inclusive Entrepreneurship Policies, Country Assessment Notes (www.oecd.org)
• 01 July 2017: Bank, M. and Schopper, A. (2017), Forschungsbericht zum Alternativfinanzierungsgesetz in Österreich Eine rechtliche und wirtschaftliche Analyse, Leopold-Franzens-Universität, Graz (news.wko.at)
• 01 November 2017: Federal Chamber of Labour (2017), Crowdfunding. Eine Untersuchung des VKI hinsichtlich der Probleme der alternativen Finanzierungsformen durch den Schwarm, Wien. (stmk.arbeiterkammer.at)
• 07 October 2022: FMA, Alternative financing act (Alternativfinanzierungsgesetz) (www.fma.gv.at)
• 07 October 2022: BMDW, Alternative financing act (www.bmdw.gv.at)
• 07 October 2022: BMDW, OTS Press release (www.ots.at)