Prior to this change investors in both countries could simply self-certify as either sophisticated (in the UK) or accredited (in the US). While both countries still allow for self-certifications, in the US the onus for verifying accreditation has now been placed squarely on the companies seeking funding leading many to require proof or risk a downstream backlash from investors who later turn out to be un-accredited and claim to have been sold / mislead on what they were getting into. For the time being, the UK has a slightly more relaxed approach to handling the certification and to where the blame is put down the line if itturns out the investor is not actually sophisticated. Speaking about regulation is not the main point of this missive. Even if regulations were identical (which they will eventually approach) there are a number of initiatives taking place in the UK which keep the UK on the cutting edge of equity crowdfunding and will ensure that the proportion of the population involved in equity crowdfunding will remain higher than that of the US. I use proportion here as the size of the US Market is roughly 5x the UK market which would make comparing on absolutes a bit lopsided. With that in mind, here are a the top 3 reasons the UK will continue to lead: Government tax incentives for investing in start-ups: While the US has flirted with tax incentives in the form of reduced capital gains tax on early stage venture investments and even reduced capital gains on these investments to Zero for a short period of time as a part of the Small Business Jobs act of 2010, the UK governements Enterprise investment Scheme (EIS) and Seed Enterprise Investment Scheme offer not only Capital Gains Reductions but also tax liability reductions and loss relief in the event that the start-up fails. For investors who dont owe capital gains, the SEIS relief can cover over 70% of the investment meaning investors are only at risk for 30% of what they put up. Fewer Angel Investors: The UK Business Angel Association sticks Angel Investment in the UK at roughly 850 Million per annum. In the US the figure has surpassed the $20 Billion mark and is continuing to grow. Where most would look at this as a negative, for crowdfunding this is actually a positive as there is a large unfilled need for seed capital which can be filled by the crowd. History: Now this point is contentious but worth mentioning. Companies in the UK have had a longer time to get it right and will be able to export their more refined models to the rest of the world more quickly than those in the US.
22 its Initial Assessment and Fast Track Draft Determination as part of the agency’s price control review process for electric distribution networks in England, Wales and Scotland. The draft determination will indicate whether any of PPL’s four Western Power Distribution subsidiaries in the United Kingdom may receive accelerated consideration of their business plans. Ofgem’s price control review process, called RIIO ED-1, will determine base revenues for an 8-year period starting April 1, 2015. A fast track determination provides key incentives including additional revenue equivalent to 2.5 percent of total annual expenditures, greater revenue certainty earlier in the process and a higher level of cost savings retention. Ofgem expects to announce its Fast Track Final Determination in February 2014. PPL’s WPD subsidiaries, which own and operate electricity distribution networks serving 7.8 million customers in central and southwest England and south Wales, filed business plans in July. The plans and key milestones in the RIIO ED-1 process are posted on PPL’s website at www.pplweb.com/investors/research-tools/uk-regulatory-review . U.K. operations accounted for 49 percent of PPL Corporation’s 2012 earnings from ongoing operations. PPL Corporation, with revenue of more than $12 billion in 2012, is one of the largest companies in the U.S. utility sector. The PPL family of companies delivers electricity and natural gas to about 10 million customers in the United States and United Kingdom, owns or controls more than 18,000 megawatts of generating capacity in the U.S., and sells energy in key U.S. markets. More information is available at www.pplweb.com . @yahoofinance on Twitter, become a fan on Facebook Related Content Chart Your most recently viewed tickers will automatically show up here if you type a ticker in the “Enter symbol/company” at the bottom of this module.
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