As in any subset of the sprawling finance sector, crowdfunding is subject to countless commentaries, revisions and studies. From this growing diaspora, it can be daunting to pick through the most pertinent research – whether it’s TechCrunch’s summary of the global capital venture system or the Huffington Post’s blog questioning the limitless power of the crowd. Invesdor has broken down the most relevant research from the past 12 months to paint a picture of equity crowdfunding as it stands in the EU today.
The ECAF Report
Utrecht School of Economics has established its own European Centre for Alternative Finance (ECAF), with academics working alongside Crowdfunding Hub to publish insights from the world of equity crowdfunding. The ECAF’s 2017 report on ‘The Current State of Crowdfunding in Europe’ highlights the operations of equity crowdfunding platforms in 27 different countries, noting that “for future growth and maturity of the industry, it is very important to get a better understanding of the alternative finance industry”.
The report reached six key conclusions. The first is that a positive stance from the government, enabling progressive regulation and tax reliefs, correlates with high volumes in the industry – the report offers the UK as a prime example.
The second notes the call for ‘more independency and transparency of aggregated data and a clear European taxonomy’, which touches on a common cry from the industry – the need for an independent, regulatory body to assess volumes. On this note, another of the six conclusions is the ECAF’s observation that ‘Volumes will continue to grow with high rates and differences between countries will decrease because of new crowdfunding legislation.’
As crowdfunding regulation improves and expands across the EU, the ECAF is confident high rates of growth will follow suit. Again, the UK is testament to this, providing a tangible alternative to traditional finance, with over 10% of SME funding provided through alternative finance, according to the report.
Beauhurst’s The Deal Report
Every year, investment watchdog Beauhurst unveils its report, detailing an overview of equity investment in the UK. They’ve published their insights on the first half of 2017, which make for interesting reading.
While the number of deals were below the previous year, there were 71 successful crowdfunding campaigns in Q2, with crowdfunding platform deals up 2.8% overall. Moreover, the breakdown of stages for each crowdfunding deal was as follows: 65% at seed stage, 31% venture, and 4% growth. UK’s Crowdcube raised the most investment, with Seedrs coming in second.
The report is available for free and contains fascinating research on the alternative finance industry as a whole, and the unique space equity crowdfunding holds in the UK scene – read it here.
Equity Crowdfunding In New Territory
Italy looks set to witness a new dawn of equity crowdfunding, according to a recent report by the Osservatorio del Crowdinvesting of the Politecnico di Milano School of Management. Over the course of the last year, investment volumes in crowdfunding have tripled to €189m, which is a 289% increase. The equity crowdfunding market itself has reached €12.4 million, a 123% increase.
Having raised only €3 million in the first three years where equity crowdfunding was operational in Italy, this represents a seismic change for the country. As the market opens itself up to innovation, it will be exciting to see if it can keep apace with developing crowdfunding countries such as France, Finland and the Netherlands.