Equity crowdfunding enables companies to raise capital while turning customers into engaged co-owners. To manage this growing community, strong corporate governance is essential: transparent reporting, clear shareholder rights, independent oversight and consistent processes – including specific rules for participation certificate holders. The article outlines these obligations and highlights how Konsento enables companies to handle governance efficiently and compliantly, even with hundreds or thousands of investors.
Modern forms of financing
In today's dynamic business world, companies are constantly looking for innovative ways to raise capital and engage their community more closely. Equity crowdfunding - also referred to as crowdinvesting - has emerged as an effective method in this context, not only providing financial support but also building an engaged customer base. However, this form of funding also brings with it a number of corporate governance obligations that are crucial to the success and long-term retention of investors and clients alike.
The goals of equity crowdfunding
Companies that opt for equity crowdfunding usually have two main objectives. First, they want to raise fresh capital to fuel their growth and expansion. Second, they want to build an engaged community, mainly of their customers, who feel more connected to the company. These customers become co-owners, which means that they can share in the success of the company. This shared vision creates not only financial support but also an emotional bond between the company and its customers.
The role of corporate governance
Corporate governance refers to the structures and processes that ensure that a company is run ethically, transparently and responsibly. In companies with a large number of co-owners, as is the case after equity crowdfunding, corporate governance plays a central role in gaining and maintaining the trust of investors and customers.
Important corporate governance duties for companies with many co-owners
Transparency and disclosure:
Companies must communicate openly and transparently about their finances, operations and risks. Co-owners and customers should have easy access to relevant information to make informed decisions.
Independent oversight:
Establishing a board of directors with independent members can ensure that strategic decisions are made objectively and in the best interests of the company and its stakeholders.
A say in the matter:
Shareholders have the right by law to vote on important decisions concerning the company, such as the election of members of the board of directors, the approval of the annual financial statements, the appropriation of profits, capital measures or amendments to the articles of association. Good corporate governance requires that the background and basis for such proposals be made transparent and as easily accessible as possible to the shareholders. Furthermore, technical and organisational hurdles must be reduced in such a way that as many shareholders as possible can participate in the vote as easily as possible.
Reporting:
Regular reporting on the financial performance, business development and strategic direction of the company is crucial to keep co-owners informed.
Avoiding conflicts of interest:
Companies should put in place mechanisms to minimise and deal transparently with conflicts of interest between managers, co-owners and other stakeholders.
Special rules for participants:
Participation certificates are also a popular means of making the community of a company co-owners. In principle, the above also applies to participants. However, special rules apply in the context of general meetings and resolutions: participants do not have the right to vote at general meetings and are basically not allowed to participate in them. On the other hand, the law explicitly stipulates that participants must be informed about the convening of the general assembly, the items on the agenda and the motions.
Conclusion
The importance of corporate governance for companies that fund themselves through equity crowdfunding cannot be overstated. If a company does not adequately fulfil its corporate governance obligations, it risks not only losing the trust of its investors, but also the loss of its committed customer base. Sound corporate governance is the foundation for long-term success, ethical behaviour and a sustainable bond between companies, investors and customers. By taking these duties seriously, companies can not only achieve their financial goals, but also build a strong and loyal community that will walk the path to success together.
Konsento operates a versatile digital platform whose intuitive tools for board members, corporate secretaries and co-owners significantly strengthen the corporate governance of stock corporations after a successful equity crowdfunding. Even with hundreds to thousands of co-owners, important corporate governance tasks can be carried out correctly with a few clicks and within a few seconds to minutes without any prior knowledge. The clever workflows of the Konsento platform automatically distinguish between the different rights of shareholders and participants.
Contact the Konsento team for a free, no-obligation consultation..
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