Crowdfunding for SMEs (eBook)

Roberto Bottiglia is full professor in Banking and Finance at the University of Verona, Italy, where he teaches Economics of Banking. He graduated in Business Administration from Bocconi University, Milan, Italy. His research interests include financial marketing, IT in banking, the structure of financial systems and the crisis of major banking groups in Europe and the USA. He recently edited The Crisis of Large Banking Groups: Systemic Dimensions and Business Issues. Flavio Pichler is Associate Professor in Banking and Finance at the University of Verona, Italy, where he teaches on Financial Markets and Institutions, Economics of Insurance and Corporate Finance courses. He graduated in Economics from the University of Verona and received a Ph.D. in Business Administration from Ca’ Foscari University of Venice, Italy. His research interests include regulation and supervision of financial systems, economics of insurance and banking and risk management.

Contents 6
About the Authors 10
Abbreviations 12
List of Figures 14
List of Tables 16
1: Introduction 17
2: Crowdfunding as a New Phenomenon: Origins, Features and Literature Review 20
2.1 Introduction 20
2.2 What Is Crowdfunding? 21
2.2.1 Features of Financial Return Crowdfunding Platforms 30
2.2.2 Motivations for Participation in a Crowdfunding Campaign 33
2.2.3 Risks of Crowdfunding 35
2.2.4 Crowdfunding Market 37
2.3 Literature Review 41
2.4 Future Research 56
3: Web 2.0 as Platform for the Development of Crowdfunding 59
3.1 Introduction 59
3.2 Features of Web 2.0 60
3.3 Crowdsourcing and Crowdfunding: Context, Subjects, and Objects of Exchange 65
3.4 Crowdfunding and Web 2.0: Mutual Interaction and Consequences 72
3.5 Questions for the Future 73
4: Competitive Frontiers in P2P Lending Crowdfunding 75
4.1 Introduction 75
4.2 P2P Lending: Types and Business Models 77
4.3 P2P Lending Market 81
4.4 Conditions Favouring the Growth of  P2P Lending 84
4.5 Competitive Advantages of P2P Lending 87
4.6 Problems and Risks of P2P Lending 94
4.7 Competitive Reactions and Positioning of Banks and Other Financial Institutions 97
4.8 The Role of Institutional Investors and Internet-Based Service Providers 101
4.9 Conclusions 103
5: How to Obtain Credit from Alternative Funding Agents 107
5.1 Introduction 107
5.2 Literature Review on P2P Lending 109
5.3 Analysis of P2P Lending Platforms 112
5.3.1 Sample Selection Process 112
5.3.2 Methodology and Results 113
5.4 Mini-Bonds 122
5.5 Conclusion 128
6: Competitive Frontiers in Equity Crowdfunding: The Role of Venture Capitalists and Business Angels in the Early-Stage Financing Industry 131
6.1 Introduction 131
6.2 The Early-Stage Financing Industry: The Funding Gap Issue 133
6.3 The Main Actors in Early-Stage Financing 136
6.3.1 Equity Crowdfunding 136
6.3.2 Informal Investors 140
6.3.2.1 Business Angels 140
6.3.2.2 Business Angel Networks, Syndicates, Groups and Clubs of Angels 142
6.3.2.3 Incubators and Accelerators 143
6.4 Institutional Investors 145
6.4.1 Venture Capital Firms 146
6.4.2 Corporate Venture Capitalists 147
6.4.3 Seed Venture Funds 147
6.4.4 Private Equity Firms 148
6.5 Non-investing Institutions 150
6.5.1 Gatekeepers 150
6.5.2 Non-profit Foundations 151
6.6 Business Angels and Venture Capitalists: A Comparative Analysis 152
6.6.1 Business Angels and Venture Capitalists: Similarities and Differences 152
6.6.2 Business Angels and Venture Capitalists: Empirical Evidence from the Italian Capital Market 155
6.6.2.1 Deals Performed by Institutional Investors 157
6.6.2.2 Deals Performed by Institutional Investors and Business Angels in Syndication 161
6.6.2.3 Deals Performed Only by Business Angels 164
6.7 Conclusions and Policy Suggestions 168
7: The Role of Equity Crowdfunding in Financing SMEs: Evidence from a Sample of European Platforms 172
7.1 Introduction 172
7.2 The Business Model of Equity Crowdfunding Platforms 175
7.3 Factors for Success of a Funding Campaign: an Explanatory Study 178
7.4 Features of a Sample of Successful European Equity Crowdfunding Campaigns 187
7.5 Conclusions 194
8: Financial Crowdfunding Regulation in EU Countries 197
8.1 Introduction 197
8.2 France 198
8.3 Germany 202
8.4 Italy 205
8.5 The Netherlands 210
8.6 Spain 213
8.7 The United Kingdom 217
8.8 Final Remarks 220
References 223
Index 239