Determinants and Role of a Business Meta-Organization in Regulatory Changes and Market Development

Crowdfunding is a growing financing system. Its emerging business models deeply disrupt traditional banking activities, but also pose risks for consumers and therefore call for the development of new regulatory frameworks around the world (Philippon, 2016). How may crowdfunding platforms collectively organize to successfully dialogue with public actors and develop a new regulatory framework?

In France, January 2013, a legislative assembly commission invited crowdfunding platforms to a hearing to initiate a dialogue about the regulatory requirements to develop the market. Rapidly during the meeting, participants realized that the hearing was destined to fail for a lack of structured collective action. Our article examines this specific moment in time, when participants realized that they needed to organize themselves in an industry representative capable of engaging in regulatory dialogue. This representative took the form of a meta-organization named “Financement Participatif France”.

The paper studies how this meta-organization emerged and developed from an informal network. It also analyzes how the MO contributed to co-construct crowdfunding’s regulation with public actors, thus breaching half a century of banking monopoly. Our methodology builds upon a body of legal literature and interviews to reconstitute sequences in this co-construction and identify determinants and roles of the meta-organization.

Our results show that the transformation of collective action from an informal network into a strong meta-organization happened by: 1) defining governance mechanisms within the meta-organization, 2) borrowing legitimacy from traditional sectors such as consulting or banking, and 3) ensuring market trust by building members’ ethics. The MO became a strong and credible device for Business Collective Action, which facilitated the successful co-construction of industry regulations. This article helps develop the idea of an “organizational gap” in policy networks, i.e. the lack of a structured intermediary in negotiations and regulation, that meta-organizations may fill under certain conditions.