LSP advises Kapilendo on Football crowdfunding with Hertha BSC Berlin, Karlsruher SC and 1. FC Kaiserslautern as pioneers

The Berlin based crowdlending platform Kapilendo, advised by LSP, sets the trend of online based crowdfunding for German professional football.

All three clubs are part of the German DFL professional leagues, enjoying a broad fan base and high click rates. This is increasingly used to raise financing as an alternative (or addition) to classic financing routes, such as bank credit and the stock markets. Kapilendo arranges crowdfunding projects individually designed for the football business. The investors are acquired via online marketing in addition to advertisement in the stadiums.

So far, the legislator has set fairly tight limits to this concept, by introducing the small investor protection act (“Kleinanlegerschutzgesetz” – “KASG”) in 2015. According to this legislation, these financings are admissible without a prospectus only up to € 2.5 million per issuer. As a consequence, this product is often quickly off the shelf: the last crowdlending tranche issued by Hertha BSC Berlin was sold out after less than 10 minutes.

Higher volume can be expected: In July 2019, the thresholds of the KASG were raised considerably. The threshold for prospectus free offerings is now at € 6 million and available not just once in the lifetime of the issuer, but every 12 months.

LSP advises Kapilendo since its founding in 2015 on regulatory and capital markets law, including the above projects.