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Crowdfunding


Written by Christian Saublens

 

The concept

How to implement it?

Step in the RIS process

What can be expected?

A quote

References

 

The concept


Crowdfunding – literally “funding by the crowd” – consists of financing projects by individuals using social networks. This funding instrument takes the form of donation, pre-orders, rewards, micro-credits, loans and equity.

Crowdfunding is a rather new mechanism to match innovators/entrepreneurs with investors/clients. In the USA, the concept started around 2005.

Today, there are more than 200 crowdfunding platforms operating in Europe. Some platforms specialized in the nature of money sought (loans, equity, donation, …) or by activity (creative industry, alternative energies, design, …).

 

How to implement it?


Public administration do not have to invest in their own platforms but they can support them just as they do for any other enterprise/start-up. In some cases, they could create a co-investment fund which will invest with the platform (for instance if a project collects 10 000 € on a platform, the co-investment fund will provide a certain amount of funding).

Moreover, the option of crowdfunding should be recommended to some start-ups as a synergy or an alternative to the classic funding providers (banks, business angels, seed funds, …).

 

Step in the RIS process


Step 5: Definition of a coherent policy mix

 

What can be expected?


An alternative to unfriendly investors vis-à-vis start-ups or pre-order to entrepreneurs. A direct market search response from the crowd. If no individual wants to invest or to receive the enterprise’s product/service as a reward for his investment, it is likely that the enterprise idea is not mature nor fit for a market outreach.

 

A quote


“All money is not the same.” by Christian Saublens

 

References


 

Mr Christian Saublens


 

Christian Saublens has more than 30 years of working experience in European trade organizations. Since 1992 he is the Executive Manager of EURADA, the European Association of Development Agencies, a network of 145 organisations. Christian has been involved in the organization of numerous conferences and meetings dealing with all matters related to regional development. He wrote several papers and working documents on business support schemes for SMEs. He played an important role for the dissemination in European regions of concepts such as benchmarking, business angels, investment readiness, proof of concept, clusters, open innovation, financial engineering, crowdfunding, … Several times Christian has been appointed as an expert by the European Commission and the Committee of the Regions.

christian.saublens@eurada.org

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