How Communities Are Using Crowdfunding to Finance Public Projects

Startups

Crowdfunding is on the rise as a method to finance public projects.

University of San Francisco produced a guide to provide insights into how to develop a successful fundraising campaign and which civic crowdfunding platforms to use.

A University’s spokesperson said:

Our goal is to provide materials that can help communities create awareness around their initiatives and create real change by achieving their financial goals.

How Communities Are Using Crowdfunding to Finance Public Projects

Find out more here.

Taking ICOs Mainstream: Indiegogo Launches Initial Coin Offering Service

Markets

indiegogo_logo

While Kickstarter confirms to have no plans to get into the initial coin offering (ICO) business, by contrast Indiegogo recently announced a new service that will enable its community to participate in ICOs by companies that have been carefully selected and that comply with U.S. securities regulations.

Main goal of the move is to ensure that only high-quality and strictly vetted tokens and other unique digital assets are available to investors.

Following an announcement last November, 2016 when the popular crowdfunding site entered the equity crowdfunding segment, this time the platform expands the opportunity for participation in token offerings through their partnership with MicroVentures.

Indiegogo’s new ICO service also helps entrepreneurs ensure they are compliant with U.S. securities laws. All ICOs on Indiegogo will be listed as part of the company’s equity crowdfunding service, First Democracy VC – a FINRA registered funding portal which launched last year in partnership with MicroVentures  and comply with the SEC’s equity crowdfunding regulations that were passed as part of the 2012 JOBS Act.

The first ICO being offered consists of rights to purchase tokens that will be issued by the Fan-Controlled Football League (FCFL), the ultimate crowdsourced football experience where fans will choose the team names, uniforms, players and even call the plays in real-time. The FCFL team includes notable executives from the NFL, San Francisco 49ers, and cryptocurrency experts from such projects as Ethereum and Bancor. The FCFL’s ICO launches today as a pre-sale, enabling investors to get bonus tokens for early support, in advance of a final token sale by the FCFL targeted for early 2018.

ICOs are a profoundly important and exciting new means of Crowdfunding, says Slava Rubin, Indiegogo Founder and Chief Business Officer. But what has been missing to date is a platform that can make ICOs accessible to a global audience, while maintaining the strictest standards for legal compliance and quality control. This is a big step towards achieving our mission of democratizing finance around the world.

With more than $3 billion raised in 2017 alone, ICOs have become a leading source of funding for both entrepreneurs and established businesses. ICOs have also received significant interest from investors with the combined value of the world’s cryptocurrencies now surpassing $400 billion.

Together, Indiegogo and MicroVentures have facilitated nearly $2 billion in funds raised across both rewards-based and equity crowdfunding campaigns. ICO offerings will be listed on both Indiegogo and MicroVentures, with the transaction being made through the companies’ joint venture First Democracy VC or MicroVenture Marketplace Inc.

STUART EMMERSON (SEUK): Crowdfunding is Now Mainstream

Ideas

In times when blockchain and cryptocurrencies are casting a shadow over banks, Community & Social Enterprise featured as a top five industry in Equity-based Crowdfunding and Debt-based Securities, as well  as in both of the non-investment based models (i.e. Reward and Donation) according to the latest findings of a research by Cambridge Centre for Alternative Finance.

Top Five Represented Sectors by Model (2016)

(Source: 4th UK Alternative Finance Industry Report,  Entrenching Innovation, Cambridge Judge Business School, Cambridge Centre for Alternative Finance)

To find out more, Oliver* met up with Stuart Emmerson, Regional Director, West Midlands Social Enterprise UK , the UK body for social enterprise to talk about social enterprises, social finance and the role of crowdfunding.

Stuart Emmerson

Pictured: Stuart Emmerson is Regional Director at Social Enterprise UK.

Oliver*: Hi Stuart and thank you for joining us. Innovative finance has been indicated by many as a cross-cutting strategy for change. What role crowdfunding could play in the new fundraising ecosystem from your perspective? 

Stuart Emmerson: With banks not lending social entrepreneurs have used ‘the crowd’ to help fund projects that would otherwise have not got off the ground.

Crowdfunding is now a mainstream part of a suite of social finance offers available to those seeking cash.

I think its role is that it’s simply another tool in the box. But it’s no easy solution – it’s hard work and doesn’t always work!

O*: Indeed, it’s hard work but it helps to ease access to finance.

S: I think it can be particularly effective at directly linking in a tangible way the community with a project and can be part of an effective communications campaign to generate interest and support.

O*: Social enterprises are indicated to be leading the way for innovating business in many areas. Yet access to the right finance remains one of the principal barriers to sustainability and growth. How Social Enterprise UK (SEUK) is supporting social entrepreneurs in this respect?

S: SEUK is supporting access to finance by working closely with the social finance sector to raise awareness.

O*: Any example?

S: We partner with Big Society Capital (an independent social investment institution in the United Kingdom, which provides finance to organizations that support front-line social sector entities, Ed.) and other organisations such as Key Fund (a social enterprises investment provider, Ed.) , to run a range of ‘Let’s talk good finance’ events.

O*: What’s the purpose of these events?

S: To help demystify the sector and help social enterprise connect to investors. In fact they offer charities and social enterprises the opportunity to speak to charity and social enterprise leaders who have already accessed social investment, to meet potential social investors, to learn about new social investment initiatives, funds and instruments, to ask questions in a safe and non-judgemental space as well as to understand more about when social investment is not suitable or appropriate.

O*: Are there any additional projects you are working on?

S: We also support the development of the Good Finance website which helps social enterprises navigate the social investment market. It’s a simple, intuitive and free tool for the sector to use.

Good Finance Website

(Pictured: Good Finance Website, Screenshot)

S: Finally, we are constantly feeding back to the social investment sector our members’ views and experiences of social investment. The market is constantly evolving and there remains a need for investment to find it’s way faster to those social enterprises who need it and for it to be less risk averse and prepared to fail.

O*: UK is viewed by many as pioneering social entrepreneurship as well as digital fundraising. How the two dimensions are contributing to drive change from your perspective?

S: The UK is indeed a leader in social enterprise as well as digital fundraising. These two dimensions are driving change through the opportunity to amplify the transformative work of social enterprises.

GetImage

Social Enteprise UK’s #WhoKnew campaign.

For example, SEUK’s digital campaign #WhoKnew helps highlight fundraising campaigns, success stories and best practice. As a sector when we collaborate we have a strong loud voice which can support effective campaigns in the sector.

Digital fundraising is helping undercover ‘hidden gems’ or community projects that would have been difficult to garner support or awareness – digital fundraising is helping change this and as a result giving more chances of success for projects across the UK.

 

Daniel Laurén Joins Invesdor as Swedish Country Manager

Markets

Invesdor, “the largest equity crowdfunding platform in the Nordic region, in terms of volume and turnover”,  has appointed Daniel Laurén to lead its Swedish operations. Stockholm-based Laurén has been involved in founding more than ten companies and in investing in startups both as a business angel and venture capitalist.

invesdor_daniellauren_jr_1

Daniel Lauren is a venture capital and early stage investment professional based in Stockholm recently appointed Country Manager of Invesdor in Sweden.

I have worked with the financing of high-growth companies both as an entrepreneur and an early-stage investor for many years. Invesdor differentiates itself in Sweden with its fast, user-friendly and regulated investment service that has been missing from the market, says Daniel Laurén. We offer companies an easy way to reach and keep in contact with investors while also enabling ordinary people to invest in unlisted growth companies.

Daniel Laurén will be tasked with expanding Invesdor’s presence on the Swedish market.

We will make Sweden into Invesdor’s second main market in the next three years. Our goal is to reach an annual volume of approximately 20 funding rounds. We are very pleased to have Daniel join our team, as he has a large network within our target group of growth companies and knows the Swedish startup culture inside out, says Invesdor CEO and founder Lasse Mäkelä.

Find out more here.

 

Equity Crowdfunding Counts for 17% of all Seed and Venture Stage Equity Investment in the UK, Study Shows

Markets

According to the 4th UK Alternative Finance Industry Report,  Entrenching Innovation, published by Cambridge’s Centre for Alternative Finance at Judge Business Schoolequity-based crowdfunding now accounts for 17% of all seed and venture stage equity investment in the UK.

Equity based crowdfunding proportion.JPG

In particular, equity-based crowdfunding grew by 11% from £245 million in 2015 to £272 million in 2016. The growth rate has, however, substantially slowed down when compared to previous years.

Moreover, the institutionalisation of funding during 2016 continued to grow with 25% of equity-based crowdfunding being provided by institutional investors such as mutual funds, pension funds, asset managers, broker-dealers, family offices and banks.

most founded sectors

Top Five Represented Sectors by Model (2016). Source: CCAF

With regard to key sectors and industries, most funded sectors for equity-based crowdfunding were Technology and Renewable Energies, respectively.

Similarly, in 2016, equity-based crowdfunding now accounts for 17.37% of all seed and venture stage equity investment in the UK in line with Beauhurst data.

 

Equity based crowdfunding trend.JPG

Bryan Zhang, Co-Founder and Executive Director Cambridge Centre for Alternative Finance, commented:

Online funding channels, such as crowdfunding and peer-to-peer lending, have not only entered common discourse, but have also become embedded in the everyday infrastructure of finance; in many instances, they are now one of the default fundraising and investments channels for businesses, retail investors and institutions.

Download the full report HERE.

SyndicateRoom Presents a Roundup of the UK’s Most Promising Scale-Up Businesses

Markets

SyndicateRoom presents a Top 100 ranking of UK high-growth businesses developed by research house Beauhurst on valuation increase between 2014 and 2017.

Together, they span 12 different sectors, employ 10,200 people and generate more than £605 million in revenue.

The first thing that springs to mind is just how inspiring they all are – from businesses that redefine our relationship with money to companies that are literally recreating the sun’s power on Earth, commented SyndicateRoom CEO and Co-founder Gonçalo de Vasconcelos. When we consider that these are the fastest-growing private businesses by valuation, it’s not surprising that the winners’ relentless growth is drawing ambitious investors to join the action.

The UK boasts one of the most diverse talent pools in the world, with business hubs like London, Leeds and Manchester attracting native professionals as well as those from Europe and beyond.

In particular 71% of the Top 100 have their HQ in London. while cities like Birmingham, Leeds, Manchester and Glasgow are being heralded as flourishing startup ecosystems.

Main findings still include a gender issue as just 7 Top 100 businesses are led by a woman.

Find out more here.