Investing in crowdfunding: how does it work and what are the risks?

Investing in crowdfunding means directly financing a project, a company or a real estate operation through a crowdfunding platform rather than through a traditional banking channel. In France, this form of financing has been structured into several forms, with specific regulatory statuses, legal caps and taxation that varies depending on the type of investment chosen. This guide details the different forms of crowdfunding, how they work, the real risks they carry and how to choose a reliable platform, before presenting another route into investing in the real economy.

What is crowdfunding, or participatory financing?

Crowdfunding, or participatory financing, is a method of financing that consists of raising funds from a large number of individuals to support a business creation, takeover or development project, or a real estate operation. Crowdfunding platforms act as intermediaries between project owners and investors, overseeing the fundraising, investor information and the monitoring of operations.

Source: Bpifrance Création, “Crowdfunding ou financement participatif, un outil de financement” (2026),bpifrance-creation.fr.

Depending on the type of operation offered, the platform must hold a specific regulatory status: IFP (Intermédiaire en Financement Participatif, a crowdfunding intermediary) for donations and non-remunerated loans, or PSFP (Prestataire de Services de Financement Participatif, a crowdfunding service provider), approved by the AMF and registered with ESMA, for remunerated loans and equity operations. All platforms must also be registered with ORIAS.

What are the forms of crowdfunding?

Crowdfunding covers several forms that differ greatly in nature and in level of risk: donations (with or without a reward), loans, remunerated or not (crowdlending), subscription to a company's securities (crowdequity) and the financing of real estate operations.

Comparison of the forms of crowdfunding

Source: Bpifrance Création, op. cit.; entreprendre.service-public.gouv.fr, op. cit.

How does a crowdfunding campaign work?

A crowdfunding campaign follows a similar pattern whatever its form: the project owner submits a file to the platform, which assesses it and sets a fundraising target and a duration. Investors then subscribe online, often starting from small amounts, until the target is reached or the campaign fails. For each project, the platform specifies the commission rate applied, the conditions for releasing funds if the target is not reached, and the early repayment terms for loans.

Why invest in crowdfunding?

Crowdfunding appeals first for its promise of returns, clearly higher than those of risk-free investments: the Livret A and the LDDS pay 1.7% net, whereas some crowdlending or real estate crowdfunding operations advertise double-digit rates.

Source: service-public.gouv.fr, “Livret A et LDDS” (2026),www.service-public.gouv.fr.

Beyond returns, financing a project through crowdfunding lets you take part directly in the real economy, directing your savings toward identified SMEs, entrepreneurs or real estate operations rather than anonymous listed securities. This is something it has in common with other ways of investing in unlisted companies, such as private equity, or with SME investment and IR-PME schemes.

What risks do you take when investing in crowdfunding?

The AMF states it plainly: there is no high return without high risk, and the investor can lose all or part of the capital invested. The main risks identified are:

• Capital loss: if the project fails or the project owner defaults, the investor may recover only part of their capital, or none at all.
• Illiquidity: unlike a listed security, a crowdfunding subscription generally cannot be resold before the end of the operation.
• The risk of delay or failure of the project: construction, renovation or development may be delayed, postponing or jeopardizing repayment.
• Confusion between creditor and owner: in some profit-sharing arrangements, the investor remains a mere creditor of the sponsoring company and never becomes the owner of the property financed.

What taxation applies to crowdfunding gains?

Interest received from crowdlending and capital gains made from crowdequity fall, by default, under the flat tax (prélèvement forfaitaire unique) of 30%, which combines income tax and social contributions. Investors may opt for the progressive income tax scale if it proves more favorable given their marginal tax bracket. Crowdfunding platforms generally provide a summary document of the income received, to be reported in the annual tax return.

How to choose a reliable crowdfunding platform?

Before entrusting your savings to a crowdfunding platform, a few checks are needed:

• Check that the platform holds the status required for the operation offered: IFP for donations and non-remunerated loans, PSFP for remunerated loans and equity.
• Consult the register of approved providers maintained by the AMF (GECO register) or the European ESMA register for PSFPs.
• Check the platform's registration with ORIAS.
• Read the conditions for releasing funds, the level of commission charged and the exit terms before maturity.
• Diversify your subscriptions rather than concentrating your savings on a single project or a single platform.

Investing beyond crowdfunding with Fundora

Crowdfunding follows an intuition close to the one that led to the creation of Fundora: opening access to asset classes long reserved for informed investors, by pooling the subscriptions of several individuals within a single structure. Fundora applies this principle to private equity rather than to the financing of one-off projects: the platform identifies and offers private equity funds ranked in the global top 25%, with actual management carried out by Kyoseil Asset Management under the mandate, a portfolio management company approved by the AMF under number GP-99040. It is this pooling mechanism that now makes it possible to invest in private equity without the entry tickets required by a direct subscription to an institutional fund.

In practice, the subscriptions of individual investors are grouped within an FPCI (Fonds Professionnel de Capital Investissement, a professional private equity fund) and dedicated vehicles of the SPV (Special Purpose Vehicle) type, which then invest directly in the target funds. This pooling significantly lowers the access threshold compared with a direct subscription to an institutional fund, with the minimum amount varying according to the strategy open for subscription at the time of investment. It is this mechanism that, for example, made it possible to open the Atlas Space Ventures strategy, positioned on the space sector, to individual investors.

Unlike real estate crowdfunding or crowdlending, the investment horizon of private equity is longer, generally several years, and targets performance multiples of around 2.5x to 4x depending on the funds selected, in exchange for even lower liquidity than traditional crowdfunding. Private equity is only one of the routes offered by Fundora to invest in the real economy: discover all of our investment services.

SUMMARY TABLE of the differences between crowdfunding and private equity via Fundora:

Indicative comparison. Characteristics vary depending on the vehicles and managers. Any investment involves a risk of capital loss.