In 2011 453 platforms raised $1.5 billionin project and business financingSource: Crowdsourcing.org

Annual growth in the number of crowdfunding platforms worldwide

A Crowdfunding Typology

• Most fundraising to date in lower gap

Equity gaps

• Model has shown potential to raise larger amounts

• Participation of larger investors

• Mix of motivations for investing

• Financial and non-financial returns

• Model’s suitability for social ventures

Business risk-reward profile where crowdfunding may fit

Some challenges

• Regulation• Process challenges• Post-investment• Getting the best participants• Potential returns

Regulation

• Important to ensure investors are protected• JOBs Act is one option but not necessarily

the best one• Need for more transparency and consistency

across Europe

Process challenges

• Flexibility around valuations• Collaboration between investors• Investor transparency and signals• Using online tools to aid in fraud detection

and business evaluation

Post-Investment

• Managing input from many investors• Incentivising investors with small stakes• Protecting investors post-investment• Voting rights• Exploring liquidity for investors• Ensuring businesses remainattractive to follow-on funders

Getting the best participants

• What businesses are suited to the model • Getting experienced/serial entrepreneurs• Attracting more experienced investors– The potential of co-investment

Potential returns

• VC returns since dotcom have been poor• Some evidence angels doing better• But tax schemes help boost real returns