We are delighted to share that our team assisted the launch of the very first operative private crowdfunding platform in Bulgaria – Afranga, available at https://afranga.com/. Our experts in financial regulations, corporate structuring, and compliance supported Afranga to establish itself as a new opportunity for businesses seeking funding and investors looking to diversify their portfolios.

A New Investment Model

Afranga introduces a pioneering model for businesses aiming to expand by raising funds from a large pool of investors, without applying the stringent regime for the publicly listed companies. At the same time, investors can gain access to a unique financial product that allows them to contribute directly to existing businesses. Unlike traditional investment approaches, Afranga eliminates the need for investment intermediaries and complex authorizations.

The investments are made in the form of a loan agreement concluded directly between the business and the investors. This approach is similar to peer-to-peer (P2P) lending models but tailored to the specifics of the crowdfunding ecosystem.

Challenges

Our team encountered numerous challenges, primarily in adapting the conventional loan agreement framework to suit this innovative model.

Another challenge was aligning the processes of the platform with the dedicated EU Crowdfunding Regulation (2020/1503). The latter sets out specific requirements for platforms operating within the EU, including investor protection measures, disclosure obligations, and overall operational standards.

Our team continues to support the establishment of Afranga on the local and EU market and we remain committed to support the advancing fintech solutions.

Dedicated team: Asen Apostolov, Partner, Tihomir Tishev, Associate and Patrizia Foffo, Associate