Crowdfunding in Europe (eBook)

Dennis Bruntje is research assistant at the Media and Communication Management Group at Technische Universitat Ilmenau, Germany. Together with his team he has conducted a wide range of studies related to crowdfunding, media management and entrepreneurship. Furthermore, the Group advises and scientifically supports various crowdfunding platforms, projects and start-ups. Dennis is head of the Scientific Work Group on crowdfunding at the European Crowdfunding Network. In his PhD thesis he focuses on intermediation by platforms in equity-based crowdfunding. He has several years of experience in business financing, from establishing a venture capital company, his research and initiating a local start-up initiative.Oliver Gajda is the founding Chairman and Executive Director at the European Crowdfunding Network, Belgium. He is a member of the European Crowdfunding Stakeholder Forum at the European Commission and Advisory Board member at Förderkreis Gründungsforschung e.V. (FGF). He works as hands-on operational and strategic consultant with innovative businesses. The past decade, Oliver has worked with venture capital, microfinance, technology and social entrepreneurship in both commercial and non-profit settings in Europe and the USA. As former journalist, he started his career in the early 1990s in the publishing and business information industries. Oliver holds Masters degrees from Solvay Business School and from the University of Hamburg and studied at SEESS (UCL) in London.                                                                                         

Multifaceted and Interdisciplinary Perspectives on Small Business and Entrepreneurship Research: Introducing the FGF Studies i... 6
Preface 10
Contents 14
Introduction 16
Reference 19
Part I: Status Quo of an Emerging Research Field 20
Crowdfunding: Outlining the New Era of Fundraising 21
1 Introduction 21
2 The Crowdfunding Market 23
3 A Classification of Crowdfunding 24
3.1 Crowdfunding Principles 24
3.1.1 Project Initiators and Backers 24
3.1.2 Crowdfunding Platform 25
3.2 Crowdfunding Types 27
4 Potentials and Challenges of Crowdfunding 28
4.1 Potentials 28
4.2 Challenges 30
5 Future Research Directions 30
5.1 Backers’ Motivation 31
5.2 Project Initiators’ Motivation 31
5.3 Risk in Crowdfunding 32
5.4 Crowdfunding for Small and Medium Enterprises 33
6 Conclusion 33
References 34
Crowdfunding: A Literature Review and Research Directions 38
1 Introduction and Motivation 38
2 Review of the Scientific Literature on Crowdfunding 39
2.1 Literature Research and Selection Criteria 39
2.2 Development of Scientific Research in Crowdfunding 40
2.3 Crowdfunding Literature with a Focus on Capital Seekers 41
2.3.1 Motivations of Companies for Crowdfunding 41
2.3.2 Determining Factors for Successful Crowdfunding 45
2.3.3 Legal Framework 46
2.4 Crowdfunding Literature with a Focus on Capital Providers 47
2.4.1 Motivations of Capital Providers 47
2.4.2 Importance of Social Networks 51
2.4.3 Signals in Crowdfunding Transactions 52
2.5 Crowdfunding Literature with a Focus on the Intermediary 53
3 Summary and Open Research Questions 55
References 58
Crowd and Society: Outlining a Research Programme on the Societal Relevance and the Potential of Crowdfunding 67
1 Introducing the Topic: Financial Crisis, Societal Challenges-Assignments for Crowdfunding? 67
2 Theoretical Background 69
3 Objectives, Scope and Core Questions of the Research Programme 71
4 Method 74
5 Outlook 75
References 76
Part II: Regional Examinations on Crowdfunding 80
The Financing Process of Equity-Based Crowdfunding: An Empirical Analysis 81
1 Introduction 81
2 Current Literature 82
3 Methodology 84
4 Functionality of Equity-Based Crowdfunding 84
4.1 Application, Screening and Selection Phase 85
4.2 Contracting Phase 85
4.3 Roadshow Phase 87
4.4 Subscription Phase 89
4.5 Holding Phase 90
4.6 Exit Phase 91
5 Implications for Entrepreneurship Research 92
References 93
The Emerging Crowdfunding Market in Italy: Are ``the Crowd´´ Friends of Mine? 96
1 Introduction 96
2 The Literature on ``Crowdfunders´´ 97
3 Data and Empirical Strategy 99
4 Conclusions 104
References 104
Crowdfunding and Employment: An Analysis of the Employment Effects of Crowdfunding in Spain 106
1 Introduction 107
2 The ICTs-Employment Nexus 108
2.1 Crowdfunding 109
3 Methodology 111
4 Financial Crisis: Spain as a Case Study 114
5 Crowdfunding and Employment in Spain: Key Figures January 2012-January 2013 116
5.1 Key Figures January 2013-January 2014 118
6 Conclusions 120
References 122
Non-equity Crowdfunding as a National Phenomenon in a Global Industry: The Case of Russia 124
1 Introduction 124
2 Russian Crowdfunding Development and Comparison with International Platforms 125
3 Global Trends on Russian National Platforms 128
4 Future of Russian Non-equity Crowdfunding 129
5 Conclusion 131
References 131
Institutions Influencing the Evolution of Crowdfunding in China: A Review of the World Bank Report on Crowdfunding´s Potential... 133
1 WBRC´s Key Variables for Crowdfunding Engagement 134
2 Mistakes and Contradictions Within the WBRC 135
3 Institutions Influencing the Evolution of Crowdfunding in China 136
4 Conclusion 138
References 138
Part III: Analysis of Specific Application Areas in Crowdfunding 140
The Perfect Regulation of Crowdfunding: What Should the European Regulator Do? 141
1 Introduction to Crowdfunding 141
2 What Is Crowdfunding? 142
3 Crowdfunding Offerings Under (European) Securities Laws 143
4 Pitfalls for Crowdfunding Offerings: National Company Laws 145
4.1 Public Offering Limitations by National Company Laws 145
4.2 Formalities Imposed by National Company Laws 146
5 Crowdfunding Platforms Under (European) Securities Laws 146
5.1 Accepting Reclaimable Funds (CRD IV, E-Money Directive) 148
5.2 Continued Ownership (UCITSD, AIFMD, VC-Regulation, EU-SEF-Regulation) 149
5.3 MiFID Regulated Activities 150
6 Towards a European Regulatory Proposal 152
6.1 The Lack of Investor Information, Exit, Voice and Loyalty 152
6.2 A European Legislative Proposal 154
6.2.1 Restrictions on the Offering 156
6.2.1.1 Disclosure 157
6.2.1.2 Maximum Cap per Project and Participation 158
6.2.1.3 Self-Certification 159
6.2.1.4 Proposal? 162
6.2.2 Light Company Law Structures 163
6.2.3 Restrictions on Crowdfunding Sites 164
6.2.3.1 Licensing/Registration Requirements 164
6.2.3.2 Business Organisation 167
6.2.3.3 Towards a Cross-Border Dimension for (Equity) Crowdfunding Platforms 168
7 Conclusion 170
References 170
Impact of Debt Crowdfunding for Civic Projects on the Optimal Portfolio of a Socially Responsible Investor 172
1 Introduction 172
2 Methodology 173
3 Optimal Portfolio Without Crowdfunding 174
4 Optimal Portfolio with Crowdfunding 175
5 Discussion of the Results 176
6 Conclusion 177
References 178
What Makes Crowdfunding Projects Successful `Before´ and `During´ the Campaign? 179
1 Introduction 180
2 Research Question 181
3 Database and Sampling 181
4 Variables 182
4.1 Campaign Descriptive Variables 182
4.2 Product Related Variables 182
4.3 Offer Related Variables 185
4.4 Entrepreneur Related Variables 186
4.5 Networking Variables 187
5 The Analysis 187
5.1 First Step: Logistic Regression on Ex-Ante Variables 187
5.2 Second Step: Mediation Model on Ex-Ante Variables 190
6 Conclusions 194
References 195
Limitless Crowdfunding? The Effect of Scarcity Management 197
1 Introduction 197
2 The Theoretical Effect 198
3 The Empirical Effect 200
3.1 Sample Description 200
3.2 Analysis 201
3.3 Results 201
4 Conclusions 202
References 203
Equity Crowdfunding: Beyond Financial Innovation 204
1 Introduction 204
2 Other Patterns Involved in Equity Crowdfunding 206
3 Conclusion 209
References 210
Part IV: Selected Case Studies on Crowdfunding Practice 212
The Crowdpower 2.0 Concept: An Integrated Approach to Innovation That Goes Beyond Crowdfunding 213
1 Introduction 213
2 Crowd Innovation Basics 214
3 The Crowdpower 2.0 Concept 215
4 Crowdpower 2.0 in Practice 216
4.1 An Example of a Crowdsourcing Platform Supporting the Crowdcreativity Phase 217
4.2 An Example of an Austrian Crowdfunding Initiative 218
5 Crowdpower 2.0: Best Practices 221
References 223
Crowdfunding of a Social Enterprise: The GloW Project as a Case Study 224
1 Introduction 225
1.1 Definitions, Models and Facts 225
1.2 Crowdfunding and Traditional Financing 226
1.3 Crowdfunding: A New Hope for Social Enterprises 227
1.4 Regulations of CF Industry Favourable for SEs 228
2 The GloW Project and Crowdfunding 229
2.1 The GloW Project 229
2.2 Crowdfunding of the GloW Project 230
2.3 Analysis of the Crowdfunding Campaign 233
3 Conclusions 238
References 239
The Ten Commandments of Crowdfunding 241
1 How to Determine if Crowdfunding Matches Potential Project Leaders´ Interests 241
2 The Self-Assessment Approach of The Ten Commandments of Crowdfunding 243
3 The Decision to Use Crowdfunding 247
References 248
About the Editorial Board and the Editors 249
Editorial Board 249
Editors 251