Crowdfunding is becoming a widely favored alternative to raising capital rather than seeking loans from banks. Crowdfunding is a way for businesses or other organizations to raise money in the form of either donations or investments from multiple individuals. This new form of capital formation emerged in an organized way in the wake of the 2008 financial crisis largely because of the difficulties faced by artisans, entrepreneurs and early-stage enterprises in raising funds. With traditional banks less willing to lend, entrepreneurs started to look elsewhere for capital.
LTP has come up with a three-page sector snapshot of Europe’s crowdfunding and other online fundraising platforms. The report analyzes the crowdfunding market in Europe and discusses the various technology trends regarding the sector.
Characteristic of various crowdfunding platforms:
Advantages of crowdfunding for small and medium-sized businesses:
1. Crowdfunded projects can get huge amounts of attention on social media and elsewhere, which can help them grow.
2. Pitching a project or businesses through crowdfunding can be a valuable form of marketing. 3. Some businesses raise amount up to £100,000 in just a few days, giving them instant access to funds. 4. As part of a crowdfunding process, the business can get feedback about their idea and how to improve it. 5. Crowdfunding is great for niche ideas that would not have been able to raise funds through traditional methods.
According to the analysis of the snapshot, the crowdfunding market in Europe is expected to exceed $6 billion by 2020.
Technology Trends in Crowdfunding:
- Smartphones will take crowdfunding mainstream
With 24/7 mobile access, investors are constantly exposed to new fundraising initiatives—from a political campaign, to a new tech gadget, or even a cross-border investment in a promising new startup.
- InvestTech clubs will move online
Investment clubs and angel groups will move their operations online and social investing will take a giant leap forward. Investors will leverage personal connections to create online syndicates for startup investments, forming not just social circles but rather new investment circles.
- Digital-based equity crowdfunding
Combining blockchain technology and equity crowdfunding, decentralized exchanges are being used to create digital stock offerings. Equity crowdfunding itself is an emerging market with several early leaders like Seedrs and Crowdcube. The appeal of digital-based equity crowdfunding is that it is easier to create an aftermarket once a sale takes place as well as marketing the offering around the globe.
Table of Contents:
2. European Crowdfunding Market & Forecast, 2013-2020
3. Major Players in Europe’s Crowdfunding Market.
4. Various Technology Trends of Crowdfunding & Other Online Fundraising platforms
5. Regulations regarding Crowdfunding & Other Online Fundraising platforms in Europe
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