A productive debate hosted by fi-compass on the potential for crowdfunding to be supported by cohesion funds, notably the European Social Fund, took place on 5 December 2019 in Brussels.
Andrea Leruste, Deputy Head of Unit at the European Commission’s Directorate for Employment and Social Inclusion opened the workshop.
According to a study drafted within the fi-compass and presented by Francesca Passeri (ECN), since its first emergence on the European market, crowdfunding has gradually established itself as an increasingly reliable option for start-ups and SMEs looking to raise capital. Individuals can easily contribute to projects hosted within online platforms.
In 2013, the size of Europe’s start-up market was value at roughly EUR 1 billion, the latest report from 2017 estimated this has grown to over EUR 10 billion. This means that, on average, the market in Europe grew at an annual rate of approximately 80%.
European Institutions have started to take an active interest in this form of financing. Given the trends and potential to become an important source of financing for public interest projects, as well as the peculiar nature of this financing mechanism, crowdfunding could now be considered when implementing cohesion policy.
When microcredit meets crowdfunding: Startnext
IBB is the business development bank of the Federal State of Berlin. It focuses on supporting start-ups, SMEs and social housing companies with loans and venture capital but also by offering grant programmes and advisory services.
As explained by Irene Schucht (IBB), Startnext was funded by IBB in 2010 as Germany’s first crowdfunding platform to help support these innovators. The platform gives entrepreneurs, inventors and creative people the opportunity to present their ideas and projects, raise funds with the support of several people, and build a community.
Startnext is now the largest crowdfunding community for creative and sustainable projects, and start-ups in the German-speaking countries. So far, it has financed 7,900 projects and start-ups, raising funds of EUR 73 million with a success rate of 55-60%.
Featuring an innovative model, Startnext combines microcredits, crowdfunding and social media-based marketing strategy.