Why Raising Money from the Public Requires a Regulatory Framework

Everyone has their difficulties, but let us focus on raising money from the public. Past fundraising scandals involving Hongyuan and other companies led the government to restrict fundraising from the general public to designated institutions operating within specified legal frameworks. My personal impression is that most countries regulate this activity. Banks, for example, may take funds from the public but are highly regulated. Insurers and public companies likewise face laws and supervisory bodies intended to protect every dollar belonging to depositors, policyholders, and retail investors, using established systems to create value. Banks: the Banking Act, the Financial Supervisory Commission’s Banking Bureau, and banking-association self-regulation. Insurers: the Insurance Act, the Insurance Bureau, and insurance-association self-regulation. Public companies: the Securities and Exchange Act, the Securities and Futures Bureau, and supervision by listing authorities. Not every individual or company can freely collect money from the public. Otherwise, anyone could open a bank or set up a company to do so. Small frauds and pyramid schemes should face stricter oversight and heavier penalties when caught. Taiwan has many startup-funding channels: angel organizations, VC, and CVC are widely available. Spend time with one or two incubators or accelerators if possible. They can help refine the business model, strengthen entrepreneurial understanding and finances, offer peer encouragement and alumni resources, and match companies with investors suited to their stage and characteristics.