Wednesday, January 27, 2016

BPN 1721: Crowd funding in Holland: 128 million euros in 2015

The sum of 128 million was raised in crowdfunding in The Netherlands, a doubling from the previous year (63 million). This is the result of research by the consultancy Douw & Koren. In total in 2015 more than 3,500 projects were crowdfunded, of which 1208 enterprises, 856 creative projects, 1247 social projects and 374 consumer loans. Entrepreneurs received on average 90.000 euros, creatives and community projects took an average 11. 000 euros and consumer loans averaged 4700 euros. 

Further growth of crowdfunding 
Crowdfunding continued to grow last year for its fourth year in a row. But will 2016 the year of truth for crowdfunding in The Netherlands. The survey of Douw & Koren identifies four opportunities for further growth. 

1. Entrepreneurs and investors 
Entrepreneurs and investors are familiar with crowdfunding. However  entrepreneurs should gain more insight into the possibilities of crowdfunding, which crowdfunding platform suits them and how crowdfunding can be combined with other forms of financing. Potential investors often do not know that it is possible to invest through crowdfunding in modest amounts. 

2. Transparency crowdfunding platforms 
After a period of growth in the number of platforms crowd funding, the consolidation has set in. The hype and the market growth is over, while there is a demand for professionalism and transparency. 

3. Real cooperation financiers 
Banks are using crowd funding as a supplementary form of financing. Crowdfunding platforms, in turn, talk about the role of the bank as a complementary lender.  But requests for loans  from the bank by entrepreneurs is still small. The same applies to the number of entrepreneurs who combine crowdfunding with bank financing. So proper SME financing should be promoted. 

4. Transparency vs. over-regulation 
The Ministries of Economic Affairs and Finance, as well as Dutch regulatory authority Authority Financial Market (AFM) see crowdfunding as a relevant form of financing. But the practical effect of regulation can make or break crowdfunding. Thus, the AFM has recently announced that anyone who is willing to invest through crowdfunding  should be tested on knowledge, experience and ability, regardless of the level of investment. This is a solid measure that increases the threshold to invest through crowdfunding. This test should contribute to greater transparency of platforms. 

Project funding for cultural and social promoters and organizations 
Last year more cultural and social organizations have turned to crowdfunding. Koren: "Consumers prefer to invest in a particular project. Crowdfunding is also increasingly being used for public projects such as a hospital, playground or festival in the city.

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