CONSTRUCTION DEVELOPMENT AS AN INSTRUMENT FOR REALIZATION OF STATE INVESTMENT POLICY

Abstract

By definition Toloka referres to the gathering of neighbors, relatives, comrades, organized to accomplish a large-scale task quickly (without payment, but for food and drink), which took place not long ago all around the world. Nowadays mutual assistance has morphed into crowdfunding - use of small amounts of capital from a large number of individuals to finance a new business venture. Change of titles was accompanied by the change of terms and conditions of assistance provisions: at present we observe a process of commercialization, which is by Cambridge dictionary definition, is the organization of something in a way intended to make a profit. Although nowadays anyone can donate money without indemnity, more frequently crowd-funders invest their money in order to turn into a beneficiary, creditor and/or co-owner of a project. The article deals with specifics of different types of crowdfunding (prepayment, donation-, royalty-, debt-, equity-based types and ICO), listing platforms providing corresponding services. Special attention is devoted to risks facing investors, investees and platforms in the process of crowdfunding, including risks of illiquidity, fraud, valuation and capitalization. With a glance to these and other risks an eye is given to financial instruments, issued by investees or platforms. In particular a reader of the article can familiarize himself with new types of securities – SAFEs (”Simple Agreement for Future Equity”) and KISSes (”Keep It Simple Security”), both being contractual rights to purchase the company’s equity at a future date, similar to warrants, but with undetermined (at the moment of their emission) conversion price. Last problem, discussed in the article, is legislative regulation of crowdfunding business in the USA: legislative requirements for investees (disclosure of information) and platforms (registration and licensing), as well as restrictions for investors (maximum amount for a period – depending on their annual income). The article is intended to provide appropriate understanding of the complexity and the practical implications of the phenomenon with the aim of enhancing crowdfunding in Ukraine.