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B r u s s e l s , 1 9 A p r i l 2 0 1 4 www.crowdfundingnetwork.eu P a g e | 1
Support services to foster the crowdfunding environment in Europe focused on web entrepreneurs
Startup Europe Crowdfunding Network
Final Report
Brussels, 19 April 2014
Deliverable 4: Final report for the Service Contract with the European
Commission, contract number: 30-CE-0557296/00-95
Prior deliverables:
Deliverable 1: Detailed Road Map
Deliverable 2: Interim report
Deliverable 3: Web Portal and Online Consultation
The Startup Europe Crowdfunding Network for Webentreprneurs has been managed on behalf of the
European Commission by WEBclusive BV, the Netherlands, and Fanshaw & Fothergill SCS, Belgium,
with support of the European Crowdfunding Network AISBL, Belgium.
The project website is located at www.crowdfundingnetwork.eu
The contracting parties WEBclusive BV and Fanshaw & Fothergill SCS will be handing over all work
done for future development to the European Crowdfunding Network ASBL as outlined in the
European Commission service contract number: 30-CE-0557296/00-95 with the end of the contract.
European Crowdfunding Network AISBL
Registered offices: Av d’Hinnisdael 6 bt 4, B-1150 Woluwé St Pierre, Belgium
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Contents
1. Executive Summary ........................................................................................................................................ 3 2. A summary description of project context and objectives ............................................................................. 5
2.1. Project Context ...................................................................................................................................... 5 2.2. Project Objectives .................................................................................................................................. 6
3. Research analysis and online consultation ..................................................................................................... 7 3.1. Conclusions ............................................................................................................................................ 7
3.1.1. Web entrepreneurs ...................................................................................................................... 7 3.1.2. Crowdfunding platforms ............................................................................................................... 8 3.1.3. European Commission .................................................................................................................. 8
3.2. Desk research ........................................................................................................................................ 9 3.2.1. Crowdfunding Platforms Focussing on Web and Internet Businesses ......................................... 9 3.2.2. Crowdfunding Model of Web Focused Platforms ....................................................................... 10 3.2.3. Country Focus ............................................................................................................................. 10 3.2.4. Platform Language ...................................................................................................................... 11 3.2.5. Average Amount Raised by Web Entrepreneurs ........................................................................ 11 3.2.6. Geographical Distribution of ‘Successful Crowdfunding Campaigns .......................................... 12 3.2.7. Type of Crowdfunding Used ....................................................................................................... 12 3.2.8. Average Number of Backers/Investors ....................................................................................... 13 3.2.9. Projects Exceeding the Campaign’s Goal .................................................................................... 14
3.3. Online consultation ............................................................................................................................. 15 3.3.1. Reasons to use crowdfunding ..................................................................................................... 15 3.3.2. Platform Choice .......................................................................................................................... 16 3.3.3. Planned Target Budget ............................................................................................................... 17 3.3.4. Successful campaigns .................................................................................................................. 17 3.3.5. Willingness to re-use crowdfunding ........................................................................................... 18 3.3.6. Reasons for not having used crowdfunding yet.......................................................................... 19 3.3.7. How to stimulate crowdfunding in Europe ................................................................................. 19 3.3.8. Quality label for crowdfunding platforms: entrepreneurs ......................................................... 20 3.3.9. Quality label for crowdfunding platforms : platforms ................................................................ 21 3.3.10. Quality label for crowdfunding platforms: content .................................................................... 21 3.3.11. European Commission’s role in promoting crowdfunding ......................................................... 22
3.4. Additional online consultation: Common Issues for Crowdfunding Platforms ................................... 23 4. A proposal for taxonomy and for data collection......................................................................................... 25
4.1. Taxonomy ............................................................................................................................................ 25 4.2. Framework for Data collection ............................................................................................................ 25
5. APPENDIX ..................................................................................................................................................... 28 5.1. Research analysis and online consultation Desk Research .................................................................. 28 5.2. The potential impact from the main dissemination activities and exploitation of results .................. 28
5.2.1. High-level Workshop on Crowdfunding and Web-entrepreneurship ......................................... 29 5.2.2. Web-portal .................................................................................................................................. 31 5.2.3. Other aspects explored regarding the portal ............................................................................. 37
5.3. Data Collection .................................................................................................................................... 38 5.3.1. An Economic model for Data collection and publication ............................................................ 38 5.3.2. Open Call for Technology Providers ............................................................................................ 49
5.4. Taxonomy ............................................................................................................................................ 55 5.4.1. Scope & Definitions ..................................................................................................................... 56 5.4.2. Context & Usage ......................................................................................................................... 56 5.4.3. Artefacts analysis ........................................................................................................................ 58 5.4.4. Data Groups ................................................................................................................................ 64
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1. Executive Summary Networking European crowdfunding platforms around a common understanding of the industry is
vital. Only with a crowdfunding environment that is marked by professionalism, transparency and
coherent practices, it can be expected that potential crowd funders and web entrepreneurs will
regard investment opportunities and access to finance through crowdfunding as a viable solution for
their needs. The education of both, the crowdfunding platforms as well as funders and entrepreneurs
was therefore a key part of the Startup Europe Crowdfunding.
The project has reached out to a large number of stakeholders through different means. Starting
with a dedicated workshop, engaging some 70 people, we communicated the results to some 1,200
people directly plus spill over effect. The workshop results were strong recommendations with
regard of data gathering and best practices for crowdfunding platforms with regard to transparency.
Details of this were presented in deliverable 2, and have been the basis for further work presented in
this report with regard to taxonomies and data collection. Following the workshop, we build a web
portal with public information for web entrepreneurs with key introductions to crowdfunding and
how to approach it. We also gathered a number of case studies to allow web entrepreneurs to better
understand potential success factors.
In our research, both desk research and online consultation, we focused on identifying specific issues
for web entrepreneurs with regard to crowdfunding in Europe. Our desk research identified 230
crowdfunding platforms (we understand that this must be indicative in a fluctuating market and due
to language barriers) of which some 13% (or around 30 platforms) have a focus on web
entrepreneurship or similar activities, with France, Italy and Germany representing the largest share
of the latter. The majority of all reviewed crowdfunding platforms offered a mixed approach of
funding models (a hybrid of either two of the following reward and equity and debt). Reward based
platforms were the largest single group with 19%, and we did not identify any donation based
platform with a focus on web entrepreneurs. Some 68% of crowdfunding platforms had a multi
country approach. Reward based crowdfunding platforms operating in multiple countries used to
55% two or more languages. We see a clear trend toward cross border operation within web
entrepreneurship focused crowdfunding platforms, mostly reward but increasingly also equity.
The average fund raising for web entrepreneurs is around €12,500 for reward and €113,000 for
equity, which is line with expectations. The largest number of successful crowdfunding campaigns by
web entrepreneurs were realised in Germany (24%), followed by Spain (17%) and France (16%). In
total, 72% of web entrepreneurs’ campaigns that were successfully funded exceeded the funding
goal. In our online consultation, we found that the reasons for web entrepreneurs to use
crowdfunding are easy access to money (71.4% of respondents) followed by the
difficulty/impossibility of obtaining funds from traditional financial actors, such as banks and
professional investors, positioning crowdfunding as an alternative source of finance, the marketing
“side benefit” of crowdfunding and the association with an innovative form of funding and
communicating (all 57.1% of respondents). Some 30% of respondents did not use existing
crowdfunding campaigns for their crowdfunding, but opted for a do it yourself or alternative model.
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Some 50% choose a crowdfunding platforms due to its legal structure and none of the respondents
choose a crowdfunding platform because of prior success storied, links to government institutions or
other business partners or indeed, transparency. Of the surveyed web entrepreneurs, none was
seeking amounts higher than €250,000, but two thirds managed to run successful crowdfunding
campaigns and 86% of respondents are expecting to use crowdfunding again in the next five years.
Asking those respondents that had not used crowdfunding so far, what kept them from it, showed
that 28% indicated they did not know what crowdfunding platform to choose as the main reason for
avoiding this financing form so far other than having sufficient funding already (32%).
When asking about how to foster crowdfunding in the EU, respondents that public data to prove that
crowdfunding is a viable alternative source of finance would the main issue. Respondents also
believed it is important to spread the knowledge about crowdfunding among (web) entrepreneurs
and investors as well as promoting best practices. While a quality label as such did not rank high (it
could be argued that if it would rate the above issues, it would) separate questions clarified that
most of the respondents (32%) believe that a quality label should be supported by the European
Commission. Also, all respondents expressed a positive opinion with regards to a quality label for
crowdfunding. Asking specifically about the role of the European Commission, 61.5% of respondents
would be in favour of the EC creating a legal framework of crowdfunding in Europe. Other activities
that respondents deemed important for the EC to undertake in order to stimulate the crowdfunding
market are: organizing workshops and trainings to explain web entrepreneurs how crowdfunding
works (50%), potentially within ongoing access to finance and investor readiness activities and to
support a quality label for crowdfunding platforms (46.2%).
In order to deliver data on the European crowdfunding market, we developed both, taxonomy and
data collection framework. While we worked with existing market players to develop the taxonomy
discussion from the workshop findings further, we linked the discussion also to the data collection
framework. The European Crowdfunding Network AISBL has initiated a Technical & Accounting
standards work group that is hoped to carry the work started within this project further into market
implementation.
With regard to the data collection, we have identified hurdles in defining a roadmap for
implementing a data collection & data distribution system. The main challenges for the framework
on data collection and data publication are that data models are heterogeneous across data
crowdfunding platforms and that their systems do not always enable data collection. Indeed, to
technically enable platforms to provide data (in the required format) may carry significant costs to
the contributing platforms (both for set-up and for operations). Those that do contribute also may
wish to impose restrictions and conditions to the commercial use of their data. In addition, the scope
of required data has to be thoroughly defined for each type of funding (e.g. reward based, equity,
debt crowdfunding ...) and is subject to significant operational costs for the data collecting agency,
including maintenance of security control and access rules. We see the only solution for enabling
exhaustive, comparable and accurate data collection is to define common data standards and models
as well as to provide an eco-system that is incentivizing the data remittance in a correct format and
in timely manner
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2. A summary description of project context and objectives
2.1. Project Context Startup Europe is the European Commission action plan aimed at strengthening the business
environment for web and ICT entrepreneurs (WE) in Europe and contributing to innovation, growth
and jobs. In January 2013, the Commission adopted the Entrepreneurship 2020 Action Plan to
unleash Europe's entrepreneurial potential. Startup Europe is a Digital Agenda Europe (DAE) initiative
supported by Vice President Neelie Kroes promoting web and ICT entrepreneurs to start their
business in Europe and to let them flourish in Europe. The project is part of this activity and aims to
provide relevant input to the work of the European Commission.
As commercial banks, the main source of loans and credits for smaller firms, are increasingly
reluctant of providing money to SMEs and have tightened lending conditions, access to fresh capital
is more crucial for small businesses than ever. According to European Chambers of Commerce data,
some 30% of SMEs face liquidity problems, a quarter of which are due to denied credits by banks.
The European Investment Bank estimates that only 30% of SMEs access bank credit at any given
time, but that 40% use overdraft facilities, credit cards and other short term credit lines to smooth
income fluctuations. If the situation is bad for established firms, it is dramatic for start-ups or fast
growing companies. For these companies, the key issue is access to equity capital in order to become
credible bank borrowers with sufficient collateral.
The early stage venture capital market in Europe represented only around €3 billion in 2012 that has
been invested in around 3,000 SMEs. This represents around 0,02% of all SMEs in Europe. Business
angels added some 5,000 transactions at a similar value. At the same time, web entrepreneurs
operate often with very low cost ceilings, making use of cloud and SaaS technology offers. They
therefore frequently do not qualify for venture capital investment until they have grown revenues to
a sizable amount. For this initial growth phase and for small SMEs in general, crowdfunding can
provide access to small rounds of equity funding as well as revenue via pre-sales and reward-based
crowdfunding campaigns.
The inherent advantages of crowdfunding, including market validation, can on top help reduce
product development and marketing cost. Web entrepreneurs especially have an affinity to the
distribute nature of networks as represented by crowdfunding and they are usually also very familiar
with the relevant web tools used to promote crowdfunding campaigns.
Fostering the crowdfunding environment in Europe and specifically web entrepreneurs and start-ups
demands a dialogue between entrepreneurs, investors and platform operators enabling
crowdfunding. It is also vital to involve investors that are poised to take advantage of crowdfunding
by picking the most promising crowdfunded projects for follow-on investment. Crowdfunding can
therefore only be understood as part of the early-stage ecosystem, not as a standalone, one-solves-
all solution.
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2.2. Project Objectives The European Commission’s "Web Entrepreneurship Action Plan" is targeted at strengthening the
environment for entrepreneurs who are starting and developing web businesses. The DAE is also
providing support for WE. One of the priorities of the action plan is to facilitate access to funding
opportunities for web startups. Within this priority, crowdfunding is a focal point. The objectives of
this project within the Startup Europe initiative and the "Web Entrepreneurship Action Plan" with
regard to web entrepreneurs were:
Acquiring additional data and knowledge about the current status of the web related crowdfunding sector in Europe (number and geographical distribution of crowdfunding platforms related to web businesses, number of web startups using crowd funding and related financial figures, possible issues and barriers affecting the growth of the sector, at national and EU level).
Based on the above, drawing some conclusions on the possible measures which would further strengthen the crowd funding environment and facilitate the pan-European growth of the sector.
Supporting higher visibility and accessibility of existing crowd funding opportunities for webentrepreneurs Europe wide.
Contributing to strengthening the links and networking between existing European crowdfunding platforms, as well as to foster the creation of new, web focused platforms.
Raising the level of education of funders and web entrepreneurs as regards investment opportunities and access to finance through crowdfunding.
The project aimed at helping reach the above objectives by engaging with relevant stakeholders
across Europe. Initially, a public workshop aimed at developing dedicated outputs for continuous
work within the project was held with around 70 participants in June 2013. Following the workshop a
dedicated web portal was built as an education and dissemination tool for issues around
crowdfunding for web entrepreneurs and other stakeholders, in particular:
General introduction to crowdfunding and the benefits and opportunities of crowdfunding
Links to crowdfunding platforms (for web entrepreneurs)
Rules governing the platforms
Educational information how to run a successful crowdfunding campaign
How to run a successful crowdfunding campaign
Which type of crowdfunding is best for specific businesses/projects
Information for funders how to choose a campaign
On top of the workshop and the web portal the project aimed at executing dedicated desk research
and an online consultation with the aim to A) raise awareness of web entrepreneurs and
stakeholders of crowdfunding and the work of the Startup Europe initiative around crowdfunding as
well as to gather information relevant for understanding the market expectations. These results are
outlined in this report. Further, the project aimed at developing a framework for a taxonomy for
crowdfunding web startups and a framework for data collection and near-real-time data publication.
The findings of this work are also presented in this report.
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3. Research analysis and online consultation The research was split into two major aspects, desk research and online consultation. The desk
research was executed in two stages, a review of crowdfunding platforms across Europe1 and a
subsequent analysis of public data available on these platforms. We established the existence of 230
crowdfunding platforms, from which we can assume that the potential total number of crowdfunding
platforms may be larger, though the size of many of the missing platforms may also be very small.
Overall, the number of platforms does not indicate their sustainability (financially or operationally).
3.1. Conclusions The present research tried to frame if and how crowdfunding can be a viable source of funding for
web entrepreneurs in Europe and what could be done to encourage this. Three different
perspectives were adopted: web entrepreneurs’, crowdfunding platforms’ and the EC’s. Following
the main conclusions and remarks for each of the three actors:
3.1.1. Web entrepreneurs
The recent economic crisis in Europe has severely impacted on the possibility for web entrepreneurs
to access finance. In this context, crowdfunding can be a good alternative to traditional sources of
early stage capital, such as bank loans which are more and more difficult to get. Furthermore, this
new and innovative financing method brings along other non-financial benefits for web
entrepreneurs. In fact crowdfunding can also be used as a powerful marketing tool, allowing to test
the idea and to promote it to a “crowd” of people.
As emerged from the research, most of the web entrepreneurs who used crowdfunding to finance
their projects in Europe opted for reward-based campaigns. However, web entrepreneurs, on
average, raised more funds on equity-based portals. We do not think one form is more suitable to
web entrepreneurs than the other. We believe, though, that web entrepreneurs should evaluate
case by case, taking into account the following points:
● to use equity crowdfunding, a basic level of business planning and financial
forecasting skills is required;
● to use reward crowdfunding, there should be the possibility of creating rewards that
do not raise campaign’s costs too heavily.
1 We understand the limitations of such research due to language barriers and the dynamics of the sector and
believe that our results are indicative only. We are certain to have missed a number of new and smaller
crowdfunding platforms and will have not fully understood the markets in some countries due to language and
maybe also cultural barriers.
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● Even though crowdfunding may appear an easy solution for raising money, because
of its transparency and direct link to investors, it still requires dedicated and hard work as
well as proactive efforts from the web entrepreneur’s side.
3.1.2. Crowdfunding platforms
Even if the number of crowdfunding platforms is probably growing every day more and more, the
platforms dedicated to web entrepreneurs in the EU form a niche. The great majority of those
platforms offer more than one crowdfunding model to its users and offer their website in two or
more languages. The latter fact indicates the willingness of these platforms to operate on a larger,
European scale. However, this is often limited by different national regulations and high compliance
costs.
Crowdfunding platforms which aim at web entrepreneurs should try to communicate in a clear and
objective way and through adapt channels about the advantages and support they offer to web
entrepreneurs. In fact, many web entrepreneurs indicated as a key reason for not using
crowdfunding the fact they did not know what platform to select.
3.1.3. European Commission
The European Commission can certainly play a crucial role to stimulate crowdfunding as a viable
source of finance for web entrepreneurs around Europe. As emerged by the present research, the EC
can take actions both to encourage web entrepreneurs to use crowdfunding and to help platforms to
establish at European level. In particular it could:
● Support the development of a transparent quality label for crowdfunding platforms that
would help, on the one hand, web entrepreneurs to select a crowdfunding portal and, on the
other, the best platforms to establish and grow. Within the communication on crowdfunding
published by the EC on the 27th of March this has been already indicated. This could be
focused on transparency or on best practices or both, but also on open technology or
reporting standards to be used.
● Provide training and knowledge about crowdfunding to web entrepreneurs. This could be
achieved, for example, by organizing seminars, webinars and sharing best practices for
running a crowdfunding campaign. Sharing data and information on crowdfunding in Europe
could also be an effective way not only to encourage web entrepreneurs to use
crowdfunding, but also to facilitate the creation of an atmosphere of trust towards this
financial innovation. Such activities could be organised on national level through relevant
partners under a European Commission led action.
● Foster the creation of a pan-European crowdfunding market. Regulations for crowdfunding
currently differ from country to country and in most of the European countries a specific
regulations is not in place yet. This makes it very expensive and time consuming for
crowdfunding platforms to start operating in their own country, but also to expand their
operations to other EU markets. As most crowdfunding platforms operate a low margin
business model aimed at reaching scale in order to obtain financial sustainability, this is a
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vital factor in making the market competitive. The EC could shape crowdfunding in a similar
way as it is doing with the emerging social entrepreneurship sector
3.2. Desk research Our desk research laid bare a number of interesting facts, for example the percentage of
crowdfunding platforms in Europe which focus on web and internet business and the type of
crowdfunding they offer. We added additional debt to the research by using entrepreneur’s project
data published on crowdfunding platforms. Here we focused on web entrepreneurs that were
successfully crowdfunded (i.e. that reached or exceeded their target budget). The projects were
selected from a sample of crowdfunding platforms, formed by both equity and reward portals, which
either focused on web entrepreneurs or had a significant share of such projects on offer.
3.2.1. Crowdfunding Platforms Focussing on Web and Internet Businesses
The first chart below shows the percentage of European crowdfunding platforms which focuses on
Web and Internet businesses, while the second frames how these platforms are geographically
distributed (by country of incorporation).
Crowdfunding platforms which focus on internet and web businesses are a small niche (13%). There
is no country that predominates in this sector, however France, Germany and Italy display the
highest number of platforms dedicated to web entrepreneurs’ projects (17% each).
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3.2.2. Crowdfunding Model of Web Focused Platforms
We analysed what crowdfunding models are offered by those crowdfunding platforms that focus on
web and internet businesses: Equity, Reward, P2P Lending, Donation or Combined (i.e. the platform
offers two or more models).
The largest category (59%) represents platforms that offer more than one crowdfunding model. This
may reflect a more general trend of horizontal scaling of crowdfunding platforms. On the other hand,
no web and internet focused portal was identified to be operating a donation-based model, which
may indicate that this model is not adapt for web entrepreneurs’ projects.
3.2.3. Country Focus
The chart below distinguishes between European platforms which focus only on one country and
those that instead focus on two or more countries.
The majority of platforms (68%) dedicated to web entrepreneurs has an international focus,
targeting two or more countries in the EU or in the world. Internationalization and cross-borders
operations are two of the most important topics in the European crowdfunding industry at the
moment, as many actors see in this an opportunity that could benefit the entire market (the survey’s
results reported further below confirm that respondents believe that an European legal framework
for crowdfunding would encourage the market’s growth).
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3.2.4. Platform Language
The following graph distinguishes between the platforms which offer only one language and those
offering two or more languages. Once again, the majority of platforms in the sample offer their
services in two or more languages. This fact is in line with the results in the data discussed above and
indicates that most of the crowdfunding portals dedicated to web entrepreneurs have an
international focus.
3.2.5. Average Amount Raised by Web Entrepreneurs
The graph below shows the average amount which was raised by web entrepreneurs projects using
reward and equity crowdfunding.
The average amount raised by web entrepreneurs through equity crowdfunding portals is far higher
than the one raised through reward crowdfunding platforms. This result is in line with the general
trend that projects which raise money through equity crowdfunding collect higher sums than those
which use reward crowdfunding. However, it may also indicate that web entrepreneurs in need of
working capital will achieve better results with equity investment for the time being. The exceptional
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examples of reward based crowdfunding campaigns, reaching millions of US Dollars, on US-based
crowdfunding campaigns for technology gadgets or web services, such as gaming, have not yet been
replicated by European crowdfunding platforms.
3.2.6. Geographical Distribution of ‘Successful Crowdfunding Campaigns
From the data collected it was also possible to determine how the projects in the sample are
geographically distributed among the different platforms. However, it should be noticed, that the
geographical distribution was determined depending on the country of incorporation of the platform
that hosted the crowdfunding campaign. This means that there might be cases where a project is
registered in a different country than the platform.
Germany is the country (24%) where most web entrepreneurs’ projects have been crowdfunded,
mostly through equity and reward crowdfunding platforms. The German equity crowdfunding
market has been developing with good results for a few years already, which might contribute to the
large number of web entrepreneurs using crowdfunding there. Spain holds a considerable
percentage in the chart, too. In fact, in Spain equity crowdfunding is not yet allowed and online
investing is forbidden by law. However, crowdfunding platforms can operate as matchmakers,
bringing private investors and web entrepreneurs together. Both markets also do not tout a strong
venture capital or business angel industry, so the funding gap might be more pronounced than for
example in countries that offer tax benefits to investors in early stage companies.
3.2.7. Type of Crowdfunding Used
How many web entrepreneurs use reward crowdfunding and how many, instead, use equity
crowdfunding to finance their projects? How do these percentages change in different countries?
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The majority of web entrepreneurs, who successfully raised money through crowdfunding in Europe,
opted for reward crowdfunding platforms (56%). This could be due to the fact that running a reward
crowdfunding campaign is easier than running an equity crowdfunding one, where there is need of
business planning and financial forecasting skills.
By breaking down the previous graph per country, we obtain more insights.
Austria, Finland, Germany, the Netherlands, Sweden and the UK are clearly “equity crowdfunding
driven”, meaning that most of the web entrepreneurs who used crowdfunding to seek finance in
those countries opted for equity models. This confirms the hypothetical explanation we made in the
previous section, concerning Germany and equity crowdfunding. In Italy, where specific regulation
for equity crowdfunding was implemented in July 2013, no web entrepreneur had successfully
conducted an equity crowdfunding campaign at the time of our research. The regulation, while
framing equity crowdfunding detailed, is also likely to have created compliance burdens that have
delayed the growth of the industry.
3.2.8. Average Number of Backers/Investors
The average number of supporters of crowdfunding campaigns ran by web entrepreneurs around
Europe differs significantly depending on the type of crowdfunding used.
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The average number of backers for a typical reward based crowdfunding campaign by web
entrepreneurs is 82 and 52 for equity based campaigns. Given that the average amount raised
through equity crowdfunding platforms is higher than the average one raised on reward
crowdfunding platforms (see table “Average Amount Raised by Web Entrepreneurs” above), we can
derive that for equity crowdfunding projects, a smaller number of backers contribute a total bigger
sum, compared to reward-based projects.
3.2.9. Projects Exceeding the Campaign’s Goal
Looking at the successful crowdfunding projects of web entrepreneurs we could also observe how
many managed not only to reach their target goal, but also to exceed it, as indicated by the following
graph. However, it is a known strategy for entrepreneurs to set the initial target of a crowdfunding
campaign lower in order to reach this hurdle faster and with more ease, using this as a claim to
success in order to win more backers for a larger amount.
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3.3. Online consultation Some 185 participants, including web entrepreneurs and crowdfunding platforms, answered our
online consultation in full or in part2, framing the situation for crowdfunding in Europe under
multiple aspects and perspectives. In particular we deem that its results, presented by the charts
below, complement the desk research we reported on above.
3.3.1. Reasons to use crowdfunding
As displayed by the graphic below, the reasons for web entrepreneurs to use crowdfunding were
multiple. However, the most common one (71,4%) has to be found in the easiness of access to
money: crowdfunding is considered by many web entrepreneurs an easy way to access funds,
probably due to its transparency and direct link to investors. Nevertheless, it is worth to point out
that conducting a crowdfunding campaign is not that simple: it requires a lot of marketing efforts and
proactivity from the web entrepreneur’s side.
Other reasons that appear to be determinant in the decision of using crowdfunding as finance source
are:
2 The online consultation was conducted through the project website at www.crowdfundingnetwork.eu and via the European
Crowdfunding Network at www.europecrowdfunding.org and its social media channels during the last quarter of 2013 and into January
2014 among web entrepreneurs and crowdfunding platforms in Europe. The consultation was posted on the project website and
disseminated through the European Crowdfunding Network AISBL to around 1200 contacts. The overall response rate for the online
consultation was with 185 answers high, reaching a response rate of 15,4% which is notably higher than usual surveys, indicating a relevant
interest in the topic.
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1. The difficulty/impossibility of obtaining funds from traditional financial actors, such
as banks and professional investors (57.1%). This fact highlights the position of crowdfunding
as an alternative source of finance.
2. The marketing “side benefit” of crowdfunding (57.1%). That is crowdfunding is also a
powerful marketing tool, helping web entrepreneurs to raise awareness among “the crowd”
about their projects.
3. The association with an innovative form of funding (57.1%). Web entrepreneurs
indicated as one of the main reason to use crowdfunding the fact that their project gets
promoted through an innovative channel.
3.3.2. Platform Choice
The survey investigated how web entrepreneurs who used crowdfunding to finance their projects
chose the platform where to run their campaigns. Interestingly, none of the respondents deemed
transparency, platforms’ partners (private and public) and success records determinant in the choice
of the platform.
The main driver for selecting the crowdfunding platform resulted to be the type of crowdfunding
offered (e.g. reward, donation, equity or lending). A good part of respondents (33.3%) did not use
any platform, which means that they opted for Do-It-Yourself models. The remaining stated that the
other factors (“Other”) influenced their platform decision. An example could be the dimension of the
portal’s online community.
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3.3.3. Planned Target Budget
Half of the web entrepreneurs who used crowdfunding and participated to the survey planned to
raise less than €10.000. Nobody, instead, aimed at large amounts of funds (i.e. more than €250.000).
This shows that in Europe it is still challenging for web entrepreneurs to raise very significant
amounts of finance through crowdfunding, compared to the US, for example, where some campaigns
managed to raise even above $1.000.000.
3.3.4. Successful campaigns
The survey investigated how many web entrepreneurs succeeded in reaching their target budget.
Notably, 66.7% ran a successful crowdfunding campaign. This data is encouraging, showing that
crowdfunding may be a good finance source for web entrepreneurs.
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3.3.5. Willingness to re-use crowdfunding
The survey asked web entrepreneurs, who used crowdfunding to finance their project, how likely
they were to conduct another crowdfunding campaign in the following five years. The results were
encouraging. As it is possible to observe in the chart below, the great majority of respondents is
expecting to use crowdfunding again in the future. This probably means that their first experience
with this new financing tool was overall positive.
According to respondents, potential future crowdfunding campaigns would mostly be aimed at
marketing, user input and market research, with raising funding or using crowdfunding to attract
other investors playing a secondary role.
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3.3.6. Reasons for not having used crowdfunding yet
The survey asked to the web entrepreneurs that did not use crowdfunding yet as to the reasons.
As it is possible to observe in the graph, the main reason (32.1%) is that they had already other
investors. This may confirm that crowdfunding acts as a “funding elevator”, tightening the financing
gap between friends, family and fools and professional investors, such as business angels. Another
common reason given (28.6%) was that web entrepreneurs did not know which platform to use. This
might indicate a lack of knowledge from the web entrepreneurs concerning the platforms and their
business models or that platforms’ communication was not effective or transparent enough.
3.3.7. How to stimulate crowdfunding in Europe
Several activities could help fostering crowdfunding in the EU, as the chart below shows. In
particular, respondents indicated that it would be useful to publish data that prove that
crowdfunding is a viable alternative source of finance. This may once again signal a general lack of
trust in regards to this innovation, which needs to be built for the market to develop. Furthermore,
the survey shows that respondents believe it is important to spread the knowledge about
crowdfunding among web entrepreneurs and investors. Additionally to this, they also suggested that
promotion of best practices would be beneficial to encourage the growth of the market. The notion
of a quality label for crowdfunding platforms received the lowest support, though we cannot exclude
a bias in the answers. Also, the following questions were specific to quality labels and showed
stronger support of the idea.
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3.3.8. Quality label for crowdfunding platforms: entrepreneurs
When specifically asked if a quality label for crowdfunding platform would encourage web
entrepreneurs to use crowdfunding, respondents had very diverse opinions. Nevertheless all the
respondents agreed on one point: nobody (0% responded “No”) believes that a quality labels would
be useless.
Most of the respondents (32%) indicated that the quality label should be supported by the European
Commission, as it is possible to observe below. The fact that all the participants in the survey
expressed a positive opinion with regards to the development of a quality label for crowdfunding
platforms may indicate that there is still a need to build an atmosphere of trust among web
entrepreneurs towards this new financial tool. This is critical for the development of a sustainable
crowdfunding market.
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3.3.9. Quality label for crowdfunding platforms : platforms
We also asked crowdfunding platforms specificly about quality labels, the results of which are fairly
similar and in line with our expectations that an independend body or even the European
Commission is best placed to initiate such label.
3.3.10. Quality label for crowdfunding platforms: content
We then asked what such quality label should ensure in terms of quality and transparency, the
results indicate that the key points are about issues of customer protection such as safe payment
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infrastructure, codes of conduct and ethical behaviour, transparency and privacy but also
professional skillsets of crowdfunding platforms.
3.3.11. European Commission’s role in promoting crowdfunding
The survey tried also to understand what role the European Commission should adopt in regards to
crowdfunding. The results, reported in the table below, indicate that 61.5% of the respondents
would be in favour of the EC creating a legal framework of crowdfunding in Europe. As mentioned
before, cross-border operations and platform’s internationalization are two of the main issue in the
European crowdfunding space, as the cost of complying to different national regulations is very high
at the moment. Other activities that respondents deemed important for the EC to undertake in order
to stimulate the crowdfunding market are: organizing workshops and trainings to explain web
entrepreneurs how crowdfunding works (50%); support a quality label for crowdfunding platforms
(46.2%), which is a result in line with those in the previous section.
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3.4. Additional online consultation: Common Issues for Crowdfunding
Platforms This section is based on a survey that the European Crowdfunding Network’s Standard & Regulation
Work Group conducted outside of the Startup Europe project.3 Nonetheless, we believe that some of
its results may be of interest for this research, thus we decided to share them within this project
report.
The survey aims at understanding the main problems faced by crowdfunding platforms during
startup phase. This can be useful also in the present contest, by providing some indications on what
obstacles crowdfunding platforms dedicated to web entrepreneurs have to deal with.
The survey results indicate that the average legal and regulatory costs of setting up a crowdfunding
platform in Europe are around 22% of the total start-up budget.
Concerning the time employed by the portals to clarify which licence and legal process to undertake
in order to launch the crowdfunding activity, the majority of the respondents declared to have spent
3 to 6 months (45.2%) and 6 to 12 months (22.6%). Around 9.7% of the platforms, instead, reported
that the process took more than two years.
3 The results are based on an online survey of crowdfunding platforms only. We surveyed some 35 platforms accross Europe and accross
crowdfunding models in late 2013 and early 2014.
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Once the portals understood the legal process, they had to apply for regulatory approval. For most of
the respondents this phase took 1 to 3 months (38.5%) and 3 to 6 months (19.2%) until the approval
of the relevant regulatory authorities had been supplied. However, there are still 11.5% of platforms
which had to wait more than two years to receive the final approval.
Furthermore, the survey also highlights that for 56% of the crowdfunding platforms, their licence
does not allow them to enter another EU country and 69.2% of the portals would have to double
their regulatory compliance cost to expand to another country.
Overall, it looks like regulatory compliance requires high costs and a considerable amount of time.
Crowdfunding platforms have to double their efforts and regulatory budget if they want to enter
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another EU country. This, in particular, may hinder the creation of a pan-European crowdfunding
market.
4. A proposal for taxonomy and for data collection Throughout the project we worked to develop taxonomies and a framework for data collection and
near-real-time data publication in collaboration with crowdfunding platforms and other
stakeholders. In due course of the project we have continued to expand both aspects in detail in a
theoretical model with help from third parties and aimed to deliver results that are applicable in
praxis. We also have analysed the technical and economic feasibility of such an undertaking, which
would require significant investment and commitment to create.
4.1. Taxonomy To date, there is neither a real shared taxonomy specific to crowdfunding, nor for web startups
(indeed, there is no clear definition of web start-ups neither). Here we focus on taxonomies for
crowdfunding, while ensuring its applicability to web startups. We aimed at a widely accepted list of
variables and dimensions that would prove beneficial when it comes to identifying and
understanding the underlying start-up dynamics in the crowdfunding financing model. The
workshops and consultations carried out in this framework shed light on these required variables and
dimensions. To our knowledge it was the largest exercise of its kind with professional participants
and representative from crowdfunding platforms across Europe.
We envision that the several different types of stakeholders will find the use of a standard taxonomy
useful in their activities. For example, the European Commission may define and organize actions
pertaining to crowdfunding according to the different users, market segments and sub-funding types
defined.
Web entrepreneurs and ICT startups will find it useful to define their own funding strategy. They can
use the taxonomy as a way the refine its own action plan and define the most suitable market
segment and funding source for their project. And, for investors who rely on both analysis and
benchmarking when making an investment decision, it will be vital to understanding the funding
strategy of a particular project to define its inherent risks and potential returns compared to other
projects. Combined with analytic capabilities and data, a standard taxonomy can become a key tool
for the financial investors.
And last but not least, for public sector bodies (such as supervisors) a standard taxonomy should
enable them to define and monitor specific developments relevant to their agenda. For instance, a
supervisor could seek to assess the usage (and compliance) of a particular type of funding in a
specific market and draw actions depending on their findings.
4.2. Framework for Data collection Defining a framework for data collection & publication requires considering the interest of all
stakeholders of the European crowdfunding industry. While thriving, this new type of funding
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sources creates a larger impact on society and the companies that it helps to finance. This study
shows that different players have an interest in the activity of collecting and distribution
crowdfunding-related data. The following provides the key findings, the interested reader can find
the details of the work done in the appendix
We defined the most important elements of such a system implementation on an open consultation
for Technology Providers, which was published on the project website and communicated to selected
and pre-identified technology providers as well as other stakeholders. This provided insightful
information about the framework for data collection and data contribution. On top we
complemented the framework with considerations based on desk research specific to data
publication and economic models for data collection and publication systems, which is a key driver of
success when implementing such system (and potentially new market players).
We have identified a number of hurdles for implementing a data collection & data distribution
system, including the need for significant efforts and resources (infrastructure, developers, project
management …). Indeed, interfacing with the data collection system and providing the data comes at
a significant financial and opportunity cost for most of the contributing crowdfunding platforms,
other data collection and data distribution system providers have already engaged with our targeted
contributors, potentially creating competing redundant data requests and risk of undue double-
usage. In the short term, manual collection of heterogeneous data generates a very cumbersome
data alignment, retreatment and data verification burden. Moreover it creates incomparable
datasets. We believe that these reasons also account for the lack of commercial solutions in the
sector for now.
In conclusion, we see the best solution for enabling exhaustive, comparable and accurate data
collection in defining common data standards and models as well as providing eco-system that is
incentivizing the data remittance in a relevant format and in a timely manner. To motivate
crowdfunding platforms to contribute data, incentives or financial resources are needed as well as
guidelines for data remittances in order to provide specific mechanisms that will ensure exhaustive
data gathering.
It is also necessary to define the data model to be used in such a system (both for data collection and
for data distribution), to carry out the implementation of the system and the data collection interface
(with appropriate resources and objectives) and to provide a model that fosters all players. With
regard to sustainability and trust, it is also needed to enable private companies to be part of the
economic model for data collection and data distribution and to define open and transparent
guidelines and standards for data usage that at the same time protect the commercial interest of
crowdfunding platforms and the privacy of project owners and investors.
We further developed taxonomy for the crowdfunding sector aimed at web entrepreneurs, though
we believe that this taxonomy will also stand for other projects. We envision that the several
different types of stakeholders will find the taxonomy useful in their activities. Different usages may
be envisioned for the European Commission, which might want to define and organize actions
pertaining to crowdfunding in Europe according to the different users, market segments and sub-
funding types defined. It also might want to carry further analysis to define the most likely path of
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action in order to foster favorable conditions for this new type of funding for web entrepreneurs. But
also for web entrepreneurs and ICT startups, which will find it useful to define their own funding
strategy. They can use the taxonomy as a way the refine own action plans and define the most
suitable market segment and funding source for their projects. Once more data is available to them;
web entrepreneurs may also define the specific investor’s requirements and market dynamics
applying to their specific product and market segment.
For investors, which rely on both analysis and benchmarking when making an investment decision,
the taxonomy can provide an understanding of the best funding strategy of a particular project
enabling them to define inherent risks and potential returns. Combined with analytic capabilities and
data, this can become a key tool for the financial investors. And, last but not least, for other public
bodies, such as supervisors, which need to base their analysis and actions on actual definitions
applicable to the specific sector concerned. Crowdfunding has an impact on different types of
activities including supervision, user’s interests, incumbent players associations. The taxonomy
should enable them to define and monitor specific developments relevant to their agenda.
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5. APPENDIX The Appendix contains background information and additional details relevant for the work
provided, but not necessary for the presentation of the results in the main section of this report.
5.1. Research analysis and online consultation Desk Research As part of the project we conducted extensive research on web entrepreneurs and crowdfunding in
Europe. In particular the research aimed at understanding how web entrepreneurs use crowdfunding
to finance their projects and if crowdfunding platforms - as they operate now - fit their needs.
Research included an online questionnaire, telephone conversations and extensive desk research.
The first stage, desk research, was directed at tracing a comprehensive directory of existing and
operating equity and reward based crowdfunding platforms around Europe. Our research has
identified some 230 platforms, but we are aware that we will have missed some platforms and that
in the time since our efforts there might have been new platforms been created or some
disappeared. For each platform was indicated: i) the crowdfunding model used; ii) the country of
incorporation; iii) the countries in which the service is offered; iv) the languages available; v) the
sector focus.
A first analysis was conducted on these data, focussing specifically on those platforms which have a
sectoral focus on Web and Internet businesses. The results are reported in the following section.
In the second stage, analysis of the desk research, a sample was derived from the data collected
during Stage 1. This sample included the biggest equity crowdfunding platform (where available) and
the biggest reward crowdfunding platform identified in each country. The platform’s dimension was
evaluated by looking at the number of financed projects and of social media followers. For each
platform in the sample were identified, among the successful crowdfunded projects, those initiated
by web entrepreneurs. Data on these were then collected from the sample. In particular, we looked
at: i) the amount raised by the project; ii) the targeted amount; iii) the crowdfunding type used - i.e.
equity or reward crowdfunding ; iv) the country where the fundraising took place; v) the numbers of
backers/investors.
The online consultation was structured based on the initial input from the “High-Level Workshop on
Crowdfunding and Web Entrepreneurs” and was disseminated to all participants of this workshop
and other interested stakeholders. It was also made public on the project website and the website of
the European Crowdfunding Network AISBL. Social media was used to further dissiminate it and the
the European Crowdfunding Network AISBL informed its network of at the time around 1200
contacts via email of the survey. The survey remained open for just under three months.
5.2. The potential impact from the main dissemination activities and
exploitation of results In the following we will discuss the potential impact from our dissemination activities. We are aware
that that much of our dissemination activities cannot be monitored adequately and those indicators
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used will often be measures of output rather than of outcomes and impact in the sense of actions
that were directly initiated by our outputs. Nevertheless, we also understand that much of the
impact will be long term, likely with additional influences and thus not measureable (other than
through a full Social Return of Investment Analysis, which is well without the scope of the actions
contained within this project. We will focus on two aspects of the dissemination activities, the High-
Level Workshop on Crowdfunding and Web-entrepreneurship and the Web-portal. The potential
impact of our research activities will depend on future actions and the intentions of the European
Commission. However, the European Crowdfunding Network AISBL is taking some work forward (in
relation to data collection and taxonomy development) in order to finalise the testing of the here
outlined framework.
5.2.1. High-level Workshop on Crowdfunding and Web-entrepreneurship
On the 4th of June 2013, a workshop for web entrepreneurs, crowdfunding platforms and
stakeholders was organised under the remit of the Startup Europe initiative of the European
Commission’s DG CONNECT under the title: “High-level Workshop on Crowdfunding and Web-
entrepreneurship” with specific focus on web entrepreneurs. The focus of the workshop was
supportive of the European Commission’s Digital Agenda, which has prioritised the goal to
strengthen the environment for web-entrepreneurs in Europe, to increase the number of web start-
ups and support their growth.
The workshop aimed to discuss and identify issues affecting the growth of web start-ups across
Europe, the prospects for increasing pan–European access to crowdfunding for web-entrepreneurs
and ways of fostering stronger and more competitive European crowdfunding brands. The focus was
on a dialogue between the crowdfunding industry and web start-ups in order to identify how needs
and expectations can be addressed in the best possible manner and in order to produce actionable
results as much as in forward looking statements.
The workshop was attended by a mix of active participants, in total more than 70 with participation
from the European Commission. Participants represented, excluding European Commission and
European Crowdfunding Network AISBL participants above 40 percent crowdfunding platforms and
30 percent entrepreneurs. The remaining stakeholders covered academia, bloggers and consultants
(e.g. White Board Mag, NESTA, Westartup…) as well as industry groups (e.g. Eurochambres, Business
Angels Europe…)
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Academics
7%
Entrepreneurs
30%
Crowdfunding
Platform
45%
Industry
Groups
7%
Bloggers &
Consultants
11%
A general introduction was given by Isidro Laso of DG Connect, European Commission and an
overview on crowdfunding was given by Peter Baeck of NESTA (UK). The remainder of the day was
structured in six workgroups organised according to an adapted design thinking framework, focused
on developing applicable resolutions on the following topics:
I. Side Benefits of Crowdfunding, facilitated by Irene Tordera, Maastricht University (the
Netherlands). The overall question was how crowdfunding might help with market and
business model validation, pre-sales, marketing or pricing web services and products.
II. Crowdfunding as a realistic financing alternative, facilitated by Benoit Vandevivere, AAA
Group (Spain). This group discussed how crowdfunding might be able to help close the
funding gap for pre-seed and seed start-ups, while innovating new ways of funding but also
create deal flow for business angels and venture capital.
III. Communication for crowdfunding platforms, facilitated by Raf Weverbergh, Whiteboard
Magazine (Belgium). The information needs of entrepreneurs with regard to crowdfunding
were at the centre of this workgroups focus, discussing crowdfunding platforms
responsibilities in providing transparency.
IV. Scaling up across Europe, facilitated by Guillaume Desclee, MyMicroInvest (Belgium). The
main focus was on how crowdfunding platforms can develop pan-European reach, both for
investors and entrepreneurs.
V. Open data and transparency, facilitated by Karsten Wenzlaff, Ikosom (Germany). This group
was asked to develop an approach to industry transparency and trust with regard to
consumer protection and general public data provision.
VI. Cooperation with public bodies, facilitated by Iwona Mertin, EUROCHAMBRES (Belgium). The
focus of this workgroup was on how different public stakeholders can help in supporting the
development of crowdfunding. Regulatory questions were excluded from the discussion.
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The results were compiled by the workshop moderators with the input of the workshop participants
following the workshop itself, this ensured ongoing review and development of the ideas and
commitment from the participants. The Results, after editing, were presented to the European
Commission and published as Proceedings of the High-level Workshop on Crowdfunding and Web-
entrepreneurship in August 2013 on the project website (both as a single document for download
under Resources and as individual stories under News) as well as on the European Crowdfunding
Network AISBL website. The proceedings were also sent by email to the full contact database of the
European Crowdfunding Network AISBL of around 1200 individuals at the time, including press and
bloggers. The results of the workshop, in general focusing on issues around data transparency and
collection were used as the basis for all following work on draft taxonomies for crowdfunding web
startups and a framework for data collection and near-real-time data publication of crowdfunding
offerings and covering market developments.
5.2.2. Web-portal
The web-portal of the Startup Europe Crowdfunding Network for webentrepreneurs has been a
dedicated delivery for engagement as well as a key dissemination platform. The portal has been
developed with the aim of providing:
General introduction to crowdfunding and the benefits and opportunities of crowdfunding
Links to crowdfunding platforms (for web entrepreneurs)
Rules governing the platforms
Educational information how to run a successful crowdfunding campaign
How to run a successful crowdfunding campaign
Which type of crowdfunding is best for specific businesses/projects
Information for funders how to choose a campaign
Access to crowdfunding opportunities in the EU
Opportunity for networking and collaborative problem solving among web entrepreneurs
The development of the portal followed the work on the related issues and has progressed adequately. The portal follows a simple structure and is easy to use. All areas, pages or posts are reachable with two mouse clicks.
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5.2.2.1. Content of the web portal
The current web portal features a number of specific areas in which information for different purposes can be obtained. Some the information is a dedicated result of the project, others present data that has been developed by the European Crowdfunding Network AISBL outside of this project but are a vital contribution to the overall project scope.
The portal of the Startup Europe Crowdfunding Network for web entrepreneurs features a general About page in which information on the project and Startup Europe are given, the parties behind the project and the steering council, including relevant web links.
Home
About News
(listing of posts)
Resources
(listing of posts)
Directory Cases
About
Team
Contact
Crowdfunding
101
18 pages with
details on how to
work with
crowdfunding as
web entrepreneur
Eight case studies
of web
entrepreneurs
crowdfunding
success stories
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Under the News tab news worthy items from the project or related issues have been published, including posts written for the international crowdfunding blog www.crowdfundinsider.com that have been reposted here. In this section we also republished the parts of the High-level Workshop on Crowdfunding and Web-entrepreneurship Proceedings in order to increase access opportunities. The online consultation of the Startup Europe Crowdfunding Network featured visibly on all pages. However, it remains difficult to identify content specific to web entrepreneurs – as much of news relevant content is either general, focused on services or technology (often hardware or gadgets within crowdfunding) – or is inadequate promotional material from individual companies (often not balanced in their presentation of facts or developments and therefore in our view not relevant for a portal such as this). We believe that rather than pushing crowdfunding specifically for web entrepreneurs, it will be advantageous to push crowdfunding into the existing technology and web community (and others) by increasing awareness of success stories, impact and reach of web related crowdfunding activities.
Under the Resources tab industry papers and other relevant studies have been posted, such as the full version of the High-level Workshop on Crowdfunding and Web-entrepreneurship Proceedings but
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also the Call for Submission for Technology Providers used to identify openly relevant data technology providers that would be able to assist in establishing a data collection tool and platform to publish crowdfunding opportunities across the EU.
As a result of our work around taxonomies and data collection, we believe that nearly all general resources to be developed today with regard to crowdfunding (best practices, transparency, data, taxonomies, rankings etc) will not be adding specific value with a focus on web entrepreneurship, rather we believe that a certain part of the web entrepreneurs is more aware of and more affine to crowdfunding than non-technical counterparts in other areas of the services industry. Any actions in promoting crowdfunding to web entrepreneurs should therefore be designed for all other entrepreneurs (and specifically service entrepreneurs) with the understanding that it will be web entrepreneurs that are likely to pick up on crowdfunding prior to other businesses because of the close relationship (and often dependence) on the internet and internet-based communities.
Under the Crowdfunding 101 tab we created an easy access guide to crowdfunding for interested web entrepreneurs and others, giving help in understanding crowdfunding in general and with specific approaches in mind. The 18 different pages answer a cross section of potential questions and help guide interested parties in building and executing a crowdfunding campaign, they are of course not to be understood as a complete list that will answer any potential issues for any particular campaign or idea. Topics covered are:
What is Crowdfunding?
The added value of crowdfunding
Types of Crowdfunding Platforms
How to set up a crowdfunding campaign
How to Set a Crowdfunding Campaign's Goal
How To Create Compelling Rewards
Crowdfunding online solutions, plugins and software
Why People Invest Through Crowdfunding
Understanding What Type of Crowdfunding is Best for Your Startup
How to Shoot a Great Crowdfunding Video
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Using Social Medias to Engage with Campaign Supporters
How To Protect Your Idea
How To Get Your Project On Platform's Homepage
Tips To Launch a Crowdfunding Platform
How Peer-to-Peer Lending Works
This part of the online portal serves as a general introduction to crowdfunding and clarifies the benefits and opportunities of crowdfunding, while also offering educational information how to run a successful crowdfunding campaign, a successful crowdfunding campaign and which type of crowdfunding might best for specific businesses/projects plus providing information for funders how to choose a campaign. However, none of these aspects can be sufficiently answered in general and will always need relevant research by the funds seeking entrepreneur or, if needed, the advice of a third party.
We note that the lack of public knowledge is indeed inspiring a new breed of consultants to take up the challenge of bringing relevant knowledge to the market. Crowdfunding consultants, despite the fact that they have no benchmark of their own expertise are appearing across Europe, in Germany they have even encouraged a collaboration with the Chambers of Commerce in offering crowdfunding consultant accreditation. While from the basis of this project we cannot comment in detail on any such actions, we definitely witness a growing interest on both buy and sell side which might develop into specialised agencies similar to other services build around the web, such as search engine optimization, social media or online marketing consulting agencies.
Under the Directory tab we have researched and listed a non-comprehensive list of crowdfunding platforms open to web entrepreneurs from all major crowdfunding funding models (donation, reward, debt and equity). Platfroms are listed by country with indication of their offered funding model and web-link. While these list not all platforms available, they comprise more established or more focused platforms and are likely more suitable for a first time crowdfunder. However, we refrained from introducing any data that could be used to provide a ranking on this page in order to remain fully independent and unbiased. This page offers specific links to crowdfunding platforms for web entrepreneurs that may help to get a better overview on the market.
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We believe that a directory such as this will always be limited by a number of external factors that the EC might be inclined to help address. Crowdfunding platforms as such are not defined businesses and the inclusion of one crowdfunding platform over another cannot be objective at this point in time. Similarly, web entrepreneurship does not adhere to one definition and many crowdfunding platforms use different terminology that are likely to include web entrepreneurs, but might also include others. A standard taxonomy also with this respect will help to gather relevant data, but moreover, lack of recognition of crowdfunding platform as a business or sector means there are no public registries, such as with Chambers of Commerce, that would allow drawing on a relevant overview of crowdfunding platforms. Increased regulation for equity and debt crowdfunding platforms such as in Italy, France or the UK will be helpful to some extent, but as donations and reward based crowdfunding is not adequately captured by these regulation, relevant platforms will continue to operate as advisors and will not be covered specifically by official company registries as crowdfunding businesses. In this respect, web entrepreneurship related crowdfunding platforms are even less visible.
Under the Cases tab we listed eight case studies that will help interested web entrepreneurs to better understand what types of projects have been successful on what type of crowdfunding platforms. We believe that success stories do not need to be large in funding but inspiring in promoting the idea of crowdfunding. The selected cases cover a mix of country and funding approaches and should therefore be able to be convey the opportunities that crowdfunding can have for a variety of businesses.
While it is possible to generate success cases (and failure cases) of web entpreneurs’ crowdfunding compaigns by monitoring the market, the physical work to do this will not make such an endeavour sustainable. Also, while some data is publicly available, to contact individual platforms and project owners is prohibitive time consuming for a wider roll out. Again, the establishment of a data collection framework and its pan-European implementation would be most favourable in detecting success and failure stories – and thus also allow drawing lessons on best practices.
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5.2.3. Other aspects explored regarding the portal
We also explored the feasibility of implementing the following services on the web portal:
(1) Access to crowdfunding opportunities in the EU (2) Opportunity for networking and collaborative problem solving among web entrepreneurs
1. For the first aspect, offering crowdfunding opportunities in the EU, there have been two main hurdles to overcome from developing the relevant services.
First, in order to obtain relevant data from crowdfunding platforms that allow to show actual crowdfunding opportunities one needs to either have access to the application programming interface (API) of the crowdfunding platform (only large platforms have these today) or develop a separate API that crowdfunding platforms than have to implement into their system (which is a time and cost hurdle for platforms). The development of relevant APIs is quite costly (development cost for a single API can well reach €10,000), which means that the operator would have to cover relevant cost (though usually less the previous this figure) for every crowdfunding platform that offers access to their data via API. On top, crowdfunding platforms that do not yet have their own APIs would need an incentive to integrate a third party API (developed by the data aggregator). An alternative is to win crowdfunding platforms to submit regularly relevant data in CSV format that then can be uploaded into the portal. In this scenario the problem remains to motivate crowdfunding platforms to engage in this activity on an ongoing basis. In both cases, a clear value added for the crowdfunding platform remains unspecific. Our discussions with crowdfunding platforms have therefore not generated a relevant interest for larger support. However, as discussed in part 5, we have formed collaboration with CrowdScanner Ltd. In the UK, a commercial entity that has developed a relevant search or aggregation engine and is rolling this out as of late Spring 2014 through a business model that promises crowdfunding platforms increased incoming investors through a network of sophisticated investors. There are other similar undertakings, but none we have seen offering the same possible reach and scope at this point in time. The success of this and other such operators will be providing further insights into this issue.
Second, in order to legally be able to republish crowdfunding offers with regard to equity and debt, some legal compliance is required. In some proposed and existing legislations this is or will be forbidden (Spain, for example). Legal compliance would depend on the business model pursued, however, and a free listing would have the least (and in many cases no) compliancy issues. In combination with the first aspect, the implied cost for developing and rolling out such a system will require a significant amount of funding and, with regard to sustainability, a clear business offering to crowdfunding platforms that would incentivise an adequate fee structure to be operated.
We spent significant efforts on exploring potential solutions around taxonomy and data collection in collaboration through an open public call (see below). Here, our aim was not to support a commercial business or to engage in any business activities with any such entity, but to use existing technology free of charge in order to test at relatively low cost the implementation of a standard taxonomy for data reporting within the European crowdfunding sector.
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2. For the second aspect, opportunity for networking and collaborative problem solving among web entrepreneurs
Throughout our work, including workshops and surveys, we did not identify any issues related to crowdfunding that would have had a specific interest to web entrepreneurs. Indeed, the issues around crowdfunding that might be of interest or hindrance to web entrepreneurs today have turned out to be issues surrounding services industry entrepreneurs rather than specifically web entrepreneurs, such as difficulties in designing relevant reward structures. Nevertheless, the web affinity of web entrepreneurs makes them more likely to understand crowdfunding and its issues compared to other non-web related services entrepreneurs. There is increasing interest in relevant media regarding crowdfunding and it has been positive for our project to get coverage in blogs such as TechCrunch.eu or Crowdfundinsider.com. Web entrepreneurs, we believe, are therefore likely to be early adopters able to exploit crowdfunding via their existing social and business networks. As such they require special support and focus, and their approach to problem solving within crowdfunding might be useful for other entrepreneurs later on.
5.3. Data Collection With regard to the data collection, we have identified a number of hurdles for implementing a data
collection & data distribution system. System implementation and maintenance requires significant
efforts and resources (infrastructure, developers, project management …). Interfacing with the data
collection system and providing the data also comes at a significant financial and opportunity cost for
most of the contributors (crowdfunding platforms). And, as data collection and data distribution
system providers engage with crowdfunding platforms they are creating competing redundant data
requests and risk of undue double-usage. A single data model and taxonomy does not exist and still
needs to be defined (see our work on the Taxonomy in this report). In the short term, manual
collection of heterogeneous data generates a very cumbersome data alignment, retreatment and
data verification burden. Moreover it creates incomparable datasets.
We see the only solution for enabling exhaustive, comparable and accurate data collection is to
define common data standards and models as well as to provide an eco-system that is incentivizing
the data remittance in a correct format and in timely manner. Our work has helped clarify a number
of actions in need to be carried out prior to implementation. There is a need to provide incentives,
financial resources, and guidelines for the data remittances from contributors (crowdfunding
platforms), provide incentives and specific mechanisms that will ensure exhaustive data gathering,
define the data model to be used in such a system (both for data collection and for data distribution),
carry out the implementation of the system and the data collection interfacing as a stand-alone
global project (with appropriate resources and objectives), provide a model that fosters all players
and enables private companies to be part of the economic model for data collection and data
distribution and define guidelines and standards for data usage.
5.3.1. An Economic model for Data collection and publication
We see a "Two-Tier" model for data collection and publication where crowdfunding platforms (or the
companies that do operate crowdfunding platforms) are required to contribute certain data to the
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target system. The model would be "Two-Tier" in the way that legally required entities may choose
(a) to contribute directly to the target system (and therefore bear the costs to comply with the data
collection process) or (b) to delegate its regulatory obligation a third party data collection agents. In
the second case, the third party data collection agent will be required and liable to submit the data
to the target system in place of the crowdfunding platforms. This second tier model enable different
commercial activities and bilateral sources of revenue with those third-party data collection agents in
order to compensate for the process costs.
For Data Publication, the target system should also enable the public and other market players to
access certain subset of data (possibly at a price when using specific data or in higher volumes). This
aspect is also discussed in the previous section. This will generate revenue opportunities both for the
market players and for the data contributors. In this case data contribution should be at the least
free for market players (and not bear a cost like for national business registers).
5.3.1.1. Framework recommendations
As detailed in the previous section, while implementing a system for crowdfuding data collection and
data publication provides significant benefits for the market (transparency, market insights, basis for
customer protection, ...), it is not exempt of challenges. As discussed, most challenges come from the
data collection process. We provide here below some recommendation in order to address these
challenges.
Data models are heterogeneous across data contributors
Defining a single data model will provide ground for an interoperable and efficient data collection
process. This process may also introduce indirect costs for all those potential contributors
(crowdfunding platforms) that may opt not to use it.
We suggest that a reference organization carries out standardization work for such a shared data
model. This model should enable the construction of taxonomies useful for reporting, accounting and
supervisory purposes. In this context, our suggestion is to develop an XBRL taxonomy for
crowdfunding, a widely accepted and open source data model currently used for accounting,
reporting and supervision.
Contributors systems do not always enable data collection
Contributors do not always enable data collection either (1) for technical reasons or for (2) business
related reasons.
In the first case, since the technologies used for crowdfunding basically can enable some sort of data
extraction, the decision comes down to a question of costs. Therefore, the contribution of data
should be very easy to do from a technical point of view (several technical formats ...). Also, it can be
imposed from a regulation point of view to provide the information to a standardised data collection
system according to specific rules. It could also be granted a specific (regulatory) advantage to the
contributors to incentivize the data contribution.
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In the second case, when a contributor does not want to contribute, again a regulatory condition can
be foreseen that imposes certain level of data disclosure and reporting for certain level of activities
or certain platform sizes.
Alternative incentives could be of commercial nature and be built into a relevant business plan of the
data collection agency. Such incentives should, directly or indirectly, be aimed at increasing the
potential revenues of the contributing crowdfunding platforms.
Technically enable contributors to provide data (in the required format) may carry
significant costs to the contributors (both for set-up and for operations)
This specific challenge is related to the previous one. Costs incentive or specific subsidies should be
envisioned in order for market participants to cover the costs involved in the contribution, where a
lack of business incentives exists.
When they do contribute, data contributors may wish to contribute data in a single format
only and in a single submission only
Some contributors (crowdfunding platforms) will find it inconvenient to report into multiple systems.
Again, the additional cost burden will restrict the number of unique data collection agencies as long
as there is no standard interface agreed upon. Some crowdfunding platforms have already developed
interfaces to provide information to data collection agencies (e.g TousNosProjets.fr in France). Such
existing types of data collection agencies ("data aggregators") may prove a very convenient way for
public bodies to get large scale data in a suitable format for their purpose. These data aggregators
could also become data providers when incentivized to do so.
When they do contribute, data contributors may wish to impose restrictions and
conditions to the commercial use of their data
Crowdfunding platforms maintain a significant amount of data that could be considered private or
protected under existing privacy guidelines. In order to enable aggregated data sharing, public bodies
can seek to define standard terms for data usage in the crowdfunding industry (that could include
supervisory purpose) in order to foster a favourable market environment for data collection,
interoperability, and market collaboration. Restrictions would not be applicable for certain sub-set of
data used for supervisory purposes.
The scope of required data has to be thoroughly defined for each type of funding (e.g.
reward based, equity, debt crowdfunding...)
There are different types of crowdfunding that answer to funding needs of startups and new
projects, including reward-based, equity and debt-based crowdfunding. Each of these will carry
different requirements in terms of data and public information. The different types of funding also
interact differently with and at different stages of the projects listed on them for fundraising. We
recommend that the scope of data required will be different for these different types of
crowdfunding. For example, reward-based crowdfunding requirement may include some financial
data being appropriate to its nature. Where financial return and financial risk is at stake (for equity /
debt based crowdfunding), more financial data about the project and the counterparty may typically
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be required. However, with regard to socio-economic data a standard may intend to be the same
across all forms of crowdfunding platforms, but existing operating models need to be taken into
consideration in order to reduce the cost of implementation to crowdfunding platforms
unneccessarily.
Data collection and publication systems do carry significant operational costs (for the
operator)
Another challenge to overcome it that the data collection and publication system will itself carry
significant operational costs to run. Many activities, technical infrastructures and data treatments are
required in order to operate such a system effectively. Public bodies (or potential sponsors) should
come together and define the purpose of the data collection and data publication system and define
an appropriate funding plan for this activity, for example with the guidance of the European
Crowdfunding Stakeholder Forum. Typically, private parties or financial institutions may have a
specific commercial interest in accessing the data, in which case it can be wise to assess in which
ways public data may be access by such institutions and seek appropriate budget contribution. If
contributors do not allow data to be use by other market participants (or by the public) then funding
should be public.
Data publication does require control and definition of access rules
It is necessary to define the extent of data that should be available to the public or to other market
operators. Defining the exact scope is not an easy task as it will impact the potential business models
of both contributors (crowdfunding platforms) and other market players that provide ancillary
services (e.g data services, credit scoring ...). We recommend defining three level of confidentiality
for data variables that could be made available through the data publication system:
1. Data that remains confidential, except for supervision/national security purpose (e.g names
of contributors)
2. Data that will be available to the public, albeit with restricted access volumes (potentially
allowing for a larger volume extraction for a fee).
3. Data that will be accessible to the public and market participants, with no volume restriction
For the large subset of data variables, it is recommended to attach a certain price for data access. In
the same as it is currently done for accounting data collected and distributed by national commerce
and business registers.
5.3.1.2. Monitoring Market Developments
The analysis of potential process for Monitoring Market Developments builds on the previously
detailed data collection and data distribution framework. Indeed, we see that many indicators and
measurements useful to monitoring and market development will likely come from the data
collection process itself. The proposed taxonomy allows for creating additional analytics, ratios,
trends and data sets useful to the interested stakeholders.
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Nevertheless, there remain two areas that require particular processes for data collection and
market monitoring are:
1. The contributors / crowdfunding platforms that have not been identified by the market
authorities; or those platforms who will not provide their data.
2. The contributors / crowdfunding platforms that will not fall under the scope of the -
potentially compulsory- Data Collection & Data Distribution ; or those outside of the direct
European jurisdiction
The most important data to consider for defining and monitoring market trends most probably rely
on a few main metrics and data variables:
- The type of platform / the financial nature of its activity(ies)
- The sector of activity
- The country(ies) of Operations
- The amount of finance it handles
- The exact name or legal entity of the crowdfunding platform operator
- Detailed description / Qualitative information / Press monitoring
In our understanding monitoring market development will use a different type of system and
information than the one defined for the data collection and data distribution. This system for
market monitoring is also potentially much easier to implement on the short term.
In practice, an “Observatory for Crowdfunding” could be established that periodically lists all existing
crowdfunding platforms active in the extended European regions, the bordering countries and more
generally all crowdfunding platforms collecting finance from European citizens. An important step
towards market transparency and public information will be made by defining collecting metrics and
data variables.
Another interesting benefit to systematically and periodically collect such information on existing
market players is to be able to identify trends and macro-economic impacts or movements in some
specific sectors or locations. For instance, some economic sectors are currently witnessing more
crowdfunding platform creation and with much higher finance volumes handled than others (e.g.
sustainable energy, regional development projects, intelligent objects design & manufacturing …)
We recommend that public institutions do create an independent not-for-Profit “Observatory for
Crowdfunding” that monitors trends and systematically identifies new crowdfunding concepts and
platforms ; potentially feeding information into other data collection tools and/or supervisory
processes.
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5.3.1.3. Economic models for data collection and publication systems
In order to not rely on public funds and subsidies, it is necessary to define suitable economic models
to enable the overall market to function properly and to llimit disruption of market dynamics by
imposing data collection or light regulatory burden. Enabling economic models around data
collection and data publication is most importantly to ensure acceptance and usage by the
contributors and market players themselves.
Here below a few business models that any regulation or public-driven operational rules should
enable:
the emergence of third party data collectors and data publication platforms (operating like
national business registers)
third-party data aggregators, using the data for other business activities (e.g project
aggregators, crowdfunding investment opportunities brokers, data aggregators, credit /
investment risk scoring services, financial media ...)
Enable data contributors to generate revenue from their data contribution
More generally, data collection should not be an impeding burden for market players. Data collection
and data collection for public purpose should be enabling.
However, there are different ways to monetize data collection and publication systems for private
operators. Here are some possible models:
Contributors pay the cost of operating the system
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In this model, the contributors (crowdfunding platforms) are being incentivized to provide their data
and to pay for the contribution of data. This can be achieved with finding a good commercial reason
for contributors or to impose a regulatory burden on the contributors. Amongst the commercial
reasons for a contributor to financially contribute to the system’s costs is the provision of new clients
or commercial advantage.
In this case, the system will need to display all investment opportunities to investors that would
otherwise not be available to the contributors (crowdfunding platforms). In order to justify such a
solution the net cash flow to contributors resulting from commissions through the systems
commercial operation should be higher than the cost investment and cost of resources opportunity.
Data clients pay the cost of operating the system
In this model, the system operator will seek to break even its costs by selling the data to clients. The
different levels of detail and different types of data shall provide value added to existing market
players (e.g. investment funds, banks ...). The level and scope of the data provided to clients should
carry commercial value. Data should be provided in a timely and qualitative manner, without
additional restrictions, by contributors in order to maximise commercial value.
A public body (or a sponsor) pays the cost of operating the platform
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There is a public benefit to provide board access to data. Where such collective interest prevails and
few commercial activities may be financially sustainable, considering public funding to access such
data may also be envisioned.
In this model, a public body (or a sponsor) will provide the main financial means to implement and
run the system for the common good of the public. The budget will be defined and potentially
revised throughout the life of the data collection and publication system. In practice, it can be
operated by a public body or by a private operator.
As for the other models, data should be provided in a timely and qualitative manner, without
additional restrictions, by contributors in order to maximise commercial value.
A balanced model
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This model is presented as a potential balance between the different contributions and still allowing
for the different business players to be able to grow. Here the Government provides subsidies (or
incentives) to those contributors (platforms) that provide data required by regulatory demand to the
data factories. These data factories can be public or private players that are then delegated for the
purpose of regulatory data contribution. The same data could be used by the data factory for a
commercial purpose – depending on the data usage agreement established with the contributor. We
foresee that some contributors will not want the submitted data to be used for other purpose than
their regulatory obligations and in which case the cost of the data remittance to the data factory will
be carried by the contributors. In the case where the data factory can generate revenues with the
data, related revenue can then be used to decrease the service fee to the contributor. Thereby
benefitting to all players involved in the transaction. This model also implies that the data remittance
obligation is somehow transferred to the data factory that collect the data on a real-time / regularly
basis from the contributors; although quality, timeliness and accuracy of data remains an obligation
of the contributor (crowdfunding platform).
Implementing this model could allow for several data factory (potentially commercial /
private ones) to be created. A license model maybe appropriate for these types of data
collection players (data factories).
Challenges
The main challenges for the framework on data collection and data publication are the following:
- Data models are heterogeneous across data contributors
- Contributors systems do not always enable data collection
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- Technically enabling contributors to provide data (in the required format) may carry significant
costs to the contributors (both for set-up and for operations)
- When they do contribute, data contributors may wish to contribute data in a single format only and
in single submission only
- When they do contribute, data contributor may wish to impose restrictions and conditions to the
commercial use of their data
- The scope of required data has to be thoroughly defined for each type of funding (e.g. reward
based, equity, debt crowdfunding ...)
- Data collection and publication systems do carry significant operational costs (for the operator)
- Data publication does require to control and define access rules (who may access the data, at what
cost/price and for what purpose)
- An economic model has to be provided both for contributors and the system operator (in order to
cover the costs involved)
Example - MixMarket.org
A widely used example of data collection and publication system is MixMarket.org. This system has
been successfully implemented by the Microfinance Information Exchange, an NGO sponsored by the
CGAP and a number of private foundations, in the Microfinance secto. MixMarket.org is an open
source platform that gathers information and data online from microfinance institutions across the
world. All contributors (microfinance institutions) do use a single data model and taxonomy for their
data gathering. The data model and taxonomy is using XBRL standards that are widely accepted for
supervisory purpose and are open source.
Using similar data model, data collection and data distribution processes to those used by
MixMarket.org could reduce the challenges outlined above and help create a transparent and open
data collection and publication effort for the European (or global) crowdfunding sector.
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Figure: Example of a Microfinance institution factsheet on MixMarket.org
About XBRL (source : Wikipedia)
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XBRL (eXtensible Business Reporting Language) is a freely available and global standard for exchanging business information. XBRL allows the expression of semantic meaning commonly required in business reporting. The language is XML-based and uses the XML syntax and related XML technologies such as XML Schema, XLink, XPath, and Namespaces. One use of XBRL is to define and exchange financial information, such as a financial statement. The XBRL Specification is developed and published by XBRL International, Inc..
XBRL is a standards-based way to communicate and exchange business information between business systems. These communications are defined by metadata set out in taxonomies, which capture the definition of individual reporting concepts as well as the relationships between concepts and other semantic meaning. Information being communicated or exchanged is provided within an XBRL instance.
Early users of XBRL included regulators such as the U.S. Federal Deposit Insurance Corporation and the Committee of European Banking Supervisors (CEBS). Common functions in many countries that make use of XBRL include regulators of stock exchanges and securities, banking regulators, business registrars, revenue reporting and tax-filing agencies, and national statistical agencies.
A wiki repository of XBRL projects is available to be freely explored and updated.In 2010, the Securities and Exchange Commission(SEC) in the US, the United Kingdom's HM Revenue & Customs (HMRC), and Companies House in Singapore had begun to require companies to use it, and other regulators were following suit. The SEC's deployment was launched in 2010 in phases, with the largest filers going first: by 2013, the large foreign companies which use International Financial Reporting Standards (IFRS) were expected to submit their financial returns to the SEC using XBRL. In the UK in 2013, both HMRC and Companies House accepted XBRL in the iXBRL format. XBRL was also adopted by the Ministry of Corporate Affairs (MCA) of India for filing financial and costing information with the Central Government.
5.3.2. Open Call for Technology Providers
For the purpose of defining suitable tools and interested parties for a full-scale pilot, an Open Call for
Technology Partners was launched in January 2014. The aim of this call was to assess the technical
ability and willingness from market participants to implement a (near) real-time data collection and
publication system. This specific task was delegated and realised with the support the European
Crowdfunding Network AISBL. The ECN has published this Open Call and has asked its Directors to
disseminate the requirement in the market and, was also widely promoted on the Associations’
social networks. The call was also published and promoted via the project website.
The Open Call for Technology partners displayed no specific technical budget for maintenance or
implementation and detailed the required input as follows:
Data Collection
Data collection can be made with different technologies and with different level of
contributors’ agreements. There are mainly two technology enabling for data collection:
- API: Automatic data load
- File data load: Data load through data file (e.g. .csv file)
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Data collection can also performed manually through evaluation, estimates and expert
interviews.
While Automatic data load with API carries evident advantages in terms of work burden and
standardization of data input, it is also the most difficult to implement technically. Moreover,
not all crowdfunding platforms technically enable or provide API data load functionalities.
When API data load is possible it can be done with different types of agreements with
contributors (crowdfunding platforms):
- Explicit agreement from provider for data access
- Implicit agreement from provider with data access from the provider public platform
The amount and scope of data variables will largely vary across crowdfunding platforms and
therefore there are very few players capable of pulling data on an industry wide basis. To our
knowledge existing data collection platforms available are still being in development phase
and are all operated by private companies. Data collection platforms have to define
commercially viable activities in order to break even on the cost of the data system
development, implementation and operation.
For the purpose of our data collection exercise we have relied on a manual data collection in
order to cover a large scope of the internet industry and the largest part of Europe. Our
approach comprise a combination of data gathering from platforms published data and
estimates where the data was not available.
Data publication
Data publication implies that two main conditions are gathered:
1. Data collection is complete
2. Data is reformatted into a single homogeneous and comparable data set
Since data formats available from the different contributors (platforms) are non-
homogeneous, a significant workload is implied in cleaning and aligning data formats. Data
completeness is also very complex to assess and achieve since many market players do not
currently provide data.
In the Open Call for Technology providers from the European Crowdfunding Network, data
collection requirement were expressed in the following terms:
Infrastructure
The required technology infrastructure will enable data providers to submit and control data
into a centralized database. The infrastructure should be available over the internet and
require minimal installation from the staff. The environment should have minimum security
requirement and backup functionalities to secure the operational process.
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Data Gathering interface
The technology should enable data providers to easily submit their data. They should have a
secure access and an easy way to identify their dataset for further analysis (e.g. a specific
source variable that is automatically updated during the data load).
The number of data providers is expected to be between 10 and 100 providers.
The technology provider is expected to present such data gathering interface and
their suitability and ease of use.
Data formats should be at minimal .csv files; and if possible .xls / .xlsx files. Any
additional data connector will be a plus.
Database structure
The database structure should follow a similar structure to the following (minor changes may
apply on the taxonomy details):
Project related variables:
Amounts raised (in EUR)
Finance type (equity, debt, …)
Overall valuation (in EUR)
First round of finance
Previous round of financing
Amounts previously raised, within past 3 years (in EUR)
Country of operations
Country of fundraising
Industry
The taxonomy utilizes a unique sector and industry classifications taxonomy that has been
optimized for entrepreneurs and SME characteristics with input from a related workshop with
stakeholders in 2013 and research undertaken by ECN.
Crowdfunding / Fund Raising Platform related variables
Detail on volume, transactions, status, valuation
Real-time offering and investment commitment updates
Further information on the data structure / taxonomy may be found here, with details to be
confirmed in due course of the assignment:
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http://www.crowdfundingnetwork.eu/2013/08/proceedings-of-the-high-level-workshop-on-
crowdfunding-and-web-entrepreneurship/
Although, the ECN will provide a final list of variables for implementation; database structure
and variables should be able to be changed at a later stage. Flexibility remains crucial until
the data gathering process has been started with data providers.
User interface and data access
Once submitted, data points should be accessible and editable in an easy manner by non-
technical users. There should be a dedicated user interface for accessing data.
Some data may be confidential and therefore permission right are expected to be
implemented per type of user and per variable (.e.g. some user types should not have access
to specific data sets or variables).
Data retrieval and exports should be able to be monitored on a per user basis.
Data Rendering and Analytics
There should be Data Visualisation tools and functionalities. The minimum requirements is
to be able to produce regular measures (average, percentiles, correlation, …) over the entire
dataset and to be able to identify inconsistencies or missing data.
Data can be normalized before the analysis process, enriched and distributed to various
channels. Enterprise search platform provides advanced search for tools such as screeners
supporting free text, geospatial, faceted classification, etc.
Dataset should be easily sub-divided per data provider or specific variables in order to ensure
meaningful analysis.
The Technology provider should detail in which ways data may be distributed
Guidelines over data anonymity should be provided to Data providers (e.g. names of
specific projects, specific information should not be available in other forms then
averages or analytic measures)
Proprietary indexes for benchmarking : Proposal from the Technology provider is a
plus
Administration & Maintenance
Users should be able to be created (with related permissions levels) by one or several
administrators. Admin right should be granted to the Open call management.
5.3.2.1. List of Technology providers answering the Open Call
As explained before the Open Call for Technology Providers issued during the project (the call was
issued on the project website and more widely circulated by the European Crowdfunding Network
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AISBL) gathered many interested parties. Here are those players who have applied to implement a
Pilot system for Data Collection and Data Distribution, in alphabetical order:
CrowdScanner Ltd. (contact : Franck Zeitoun)
Innovation Service Network (ECN Member, contact : Reinhard Willfort)
Open Data Soft (contact : David Thoumas)
Symbid consortium (ECN Member, contact : Korstiaan Zandvliet)
The Web Financial Group / Crowdnetics) - (contact : Luan Cox)
5.3.2.2. Conclusion on the Open Call for Technology providers
The initial analysis of replies, which was based on an independent review from the projects advisory
board, from the Technology Providers shows that many of them offer not only a role of IT providers
but also pursue their own commercial agenda in this sector. While this is understandable, since the
required system development have to be covered in some ways, it renders the choice and agreement
process very complex. We foresee difficulties to invite crowdfunding platforms to contribute data
openly into a system that will be used for commercial purposes by a third party. The collective
advantage and benefits of the data collection have to be clearly identified before being able to
conduct such a large scale project (with potentially more than 80 contributors in Europe).
While it could be possible to entirely rely on a single technology provider for the purpose of this
exercise we have also seen that other players have engaged in similar developments and requests
with the contributors themselves, rendering the data collection exercise complex, fragmented and
often resulting in duplication.
Here are the main hurdles that we have faced in the defining the roadmap for implementing a data
collection & data distribution system:
- Implementing the system and maintaining it requires significant efforts and resources
(infrastructure, developers, project management, …)
- Interfacing with the data collection system and providing the data comes at a significant
financial and opportunity cost for most of the contributors (crowdfunding platforms)
- Other data collection and data distribution system providers have already engaged with our
targeted contributors; creating competing redundant data requests and risk of undue
double-usage.
- A single data model / taxonomy do not exist and still need to be defined
- Definition of what data would be available for commercial purposes by the Technology
Provider or by the system operator itself
- In the short term, manual collection of heterogeneous data generates a very cumbersome
data alignment, retreatment and data verification burden. Moreover creates incomparable
datasets.
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In order to be exhaustive at this point in time, we see that all potential sources of data would have to
be tapped into, amongst which:
- Some specific private data factories / data collection system having already defined formats
and processes with some contributors
- Direct access to data sets from contributors
- Top-down approach from estimates and provisory data collected on alternative data sources
(legal accounts, company analysis, website, interviews …)
We see the best solution for enabling exhaustive, comparable and accurate data collection is to
define common data standards and models; as well as to provide an eco-system that is incentivizing
the data remittance in a correct format and in timely manner.
This exercise as helped clarify a number of actions need to be carried out before the Pilot System can
be implemented and the first data be collected:
- Provide incentive, financial resources, and guidelines for the data remittances from
contributors
- Provide incentives and specific mechanisms that will ensure exhaustive data gathering
- Define the Data model to be used in such a system (both for data collection and for data
distribution)
- Carry out the implementation of the system and the data collection interfacing as a
stand-alone global Project (with appropriate resources and objectives)
- Provide a model that fosters all players and enables private companies to be part of the
economic model for data collection and data distribution
- Define guidelines and standards for data usage
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5.4. Taxonomy We envision that the several different types of stakeholders will find the taxonomy useful in their
activities. Different usages may be envisioned.
For example, the European Commission might want to define and organize actions pertaining to
crowdfunding in Europe according to the different users, market segments and sub-funding types
defined. It might also want to carry further analysis to define the most likely path of action in order
to foster favourable conditions for this new type of funding for web entrepreneurs.
Web entrepreneurs and ICT startups will find it useful to define their own funding strategy. They can
use the taxonomy as a way the refine action plans and define the most suitable market segment and
funding source for their project. Once more data is available, web entrepreneurs may also define the
specific investor’s requirements and market dynamics applying to their specific product and market
segment.
Investors rely on both analysis and benchmarking when making an investment decision.
Understanding the funding strategy of a particular project enables to define its inherent risks and
potential returns. Combined with analytic capabilities and data, it can become a key tool for the
financial investors.
Public Bodies need to base their analysis and actions on actual definitions applicable to the specific
sector concerned. Crowdfunding has an impact on different types of activities including supervision,
users’ interests and incumbent actors’ interest. The taxonomy should enable them to define and
monitor specific developments relevant to their agenda. For instance, a supervisor could seek to
assess the usage (and compliance) of a particular type of funding in a specific market and draw
actions depending on their findings.
The present section provides an introduction on the contextual information for this taxonomy and
the way it was defined for the Startup Europe Crowdfunding Network. It also provides an analysis of
the artifacts used to define the present taxonomy: the workshop proceeds (including experts input)
and a complimentary analysis from existing crowdfunding platforms’ data models. Finally it presents
the taxonomy itself in a readable format for the non-technical professional.
Although we envision that this proposal will open a certain way for defining a taxonomy, we would
like to mention that some other crowdfunding data model and or taxonomy initiatives are already, if
with limited impact, under way. We do not differentiate those initiatives that are commercial from
the non-commercial in nature.
Here below is a list of initiatives that included the creation of a taxonomy for the purpose of
crowdfunding projects reporting & analysis. This list is not deemed inclusive and is for information
purpose only.
The Crowdfunding Center
The Web Financial Group / Crowdnetics
CrowdScanner Ltd.
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Banque Publique d’investissement (BPI France) / Tousnosprojets.com website
Symbid consortium
5.4.1. Scope & Definitions
This taxonomy has been defined in the framework of the Startup Europe initiative. Its scope spans
web startups and entrepreneurial projects that seek for funding in the framework of their product
conception, prototyping or development. The taxonomy is specifically relevant for web
entrepreneurs for which specific variables and dimensions have been integrated. In practice, the
scope was defined with input from the relevant interest groups and the sector experts in order to
define the taxonomy.
As a definition applicable to web entrepreneurship, a taxonomy is the technical term for the guiding
principles behind the organisation of information - a key concern for web developers. Every web
developer should know how to harness the basic principles of taxonomy to design a logical,
organised, efficient Web infrastructure. By understanding information taxonomy and using it to
optimise websites, web developers can maximise the value and capability of their work. Taxonomy
structure provides a classification schema for categorizing content within the content management
process. (Source : ZDnet.com)
The content of the taxonomy is entirely summarized in this section. The taxonomy is built upon a list
of variables previously defined. Notice that some variables have not been selected to be part of the
final proposed taxonomy.
There are additional measures (identified in the first phase of the project, especially through the
Workshop held in Brussels on 4 June 2013) that have been considered as too complex to implement
or purely analytical measures that can be derived from the main data model. These measures have
not been included in the presented taxonomy. Please note that a full-fledged data model would also
require single points of entry and unique identifiers for the data tables articulation. These have not
been included in the taxonomy as it covets a technical dimension.
For some variables, a list of possible values is provided for information. These are for information
purpose and are not considered exclusive, nor as a definitive reference.
5.4.2. Context & Usage
Business context is the business environment for the taxonomy efforts in terms of business
objectives, web applications where taxonomy will be used, corporate culture, past or current
taxonomy initiatives, and artifacts within the organization and across the industry.
5.4.2.1. What is the purpose of the taxonomy?
The taxonomy is a tool and a set of definitions enabling other initiatives and action monitoring in the
framework of the Digital Agenda pertaining to the Startup Europe initiative. It should support and be
used by the related actions in promoting web and ICT entrepreneurs to start their business in Europe
and to let them flourish in Europe. More specifically to define the early stage finance that use
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crowdfunding. As this is a rather new and un-documented type of funding resources for
entrepreneurs this taxonomy should help the different stakeholders of the web and ICT industry to
define, foster actions and measure on them.
5.4.2.2. Who will be using the taxonomy?
Withstanding that it will be dependent on its actual refinement, integration and publication by the Directorate itself, different stakeholders will find the taxonomy useful:
The European Commission/Directorate General (DG)
Web entrepreneurs and ICT startups
Investors
Public bodies / Supervisors
5.4.2.3. How is the taxonomy going to be used?
We envision that the several different types of stakeholders will find the taxonomy useful in their activities. Different usages may be envisioned:
For the European Commission: Define and organize actions pertaining to crowdfunding in Europe according to the different users, market segments and sub-funding types defined. Carry further analysis to define the most likely path of action in order to foster favorable conditions for this new type of funding for web entrepreneurs.
For web entrepreneurs and ICT startups: Web entrepreneurs and ICT startups will find the taxonomy useful to define their own funding strategy. They can use the taxonomy as a way the refine action plans and define the most suitable market segment and funding source for their project. Once more data is available to them; web entrepreneurs may also define the specific investor’s requirements and market dynamics applying to their specific product and market segment. Another aspect of the taxonomy refers to the market opportunities in developing ICT activities when a particular data model and taxonomy is shared amongst a potentially large finance market such as crowdfunding.
For investors : Investors rely on both analysis and benchmarking when making an investment decision. Understanding the funding strategy of a particular project enables to define its inherent risks and potential returns. Combined with analytic capabilities and data, it can become a key tool for the financial investors.
For other public bodies / Supervisors / NGOs : Public Bodies need to base their analysis and actions on actual definitions applicable to the specific sector concerned. Crowdfunding has an impact on different types of activities including supervision, user’s interests, incumbent players associations … The taxonomy should enable them to define and monitor specific developments relevant to their agenda. For instance, a supervisor could seek to assess the usage (and compliance) of a particular type of funding in a specific market and draw actions depending on their findings.
5.4.2.4. What are the input sources for the taxonomy design?
The taxonomy design has relied mainly on (1) a high-level expert workshop and (2) expert input
gathered for the specific purpose of the taxonomy design. The iterative process of the taxonomy
building enabled both workshop participants and the advising board to provide input where
required. Please see section (2) for more details about the existing artifacts analysis for inputs.
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5.4.3. Artefacts analysis
5.4.3.1. High Level workshop proceeds & Expert review
As described in the document «Proceeding of the High Level Workshop on Crowdfunding & Web
Entrepreneurship» published in August 2013, the workshop and expert review process enabled also
to define the most important dimensions that the taxonomy should cover. As an output from this
process, the summarized elements of the taxonomy should comprise the following:
From section 4. “Crowdfunding as a source of alternative financing” pp.13-15 in the
document :
Hard Facts Data (on Projects / Entrepreneurs):
o Revenues, Profits
o Number of Employees
o Year Established
o How many customers
o Share of business of 20% most active customers
o Returning customers
o Financial History and Forecasts
o Shareholders
o Intellectual Property (Patents, Brands, domain name, etc.)
o Major commercial contracts
o Founders degrees
o Awards/achievements
o Recommendations
o Social Media links
Soft and Subjective Facts Data (on Projects / Entrepreneurs):
o Professional Investors Question Catalogue and Guide (Venture Capital,
Business Angels)
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o Links to external resources
o Wikipedia, major articles, books, competition
o Wikipedia-like resource filled by crowdfunders
o Competitor list (with links), competitor’s failure and success stories,
market trends
Post-mortem analysis of questions, rating, to have a permanent learning
process:
o Most Frequently Asked Questions
o Favourite Questions by Investors
o Favourite Questions by Entrepreneurs
o A ranking of reviewers and opinion makers linked to public profiles
o How many investments they made? Where? Success rate?
o What other reviews they did?
o What is their business and educational background
From section 7. “Open Data & Transparency”, p26-30 in the document :
1. Data processing lines
The crowdfunding platforms as part of their daily operations request and receive data
both from Entrepreneurs and from Investors. The data received can be categorised as
public or open data and as private or restricted data. Open data should be used for
transparency reasons on each crowdfunding site itself, but also provided a central
intermediary. Restricted data should be forwarded to such intermediary who would
make sure no infringements of right would be made by using the data in aggregated
fashion. The intermediary would use all data to analyze the market. Where necessary,
the Intermediary also could be responsible to forward restricted data to official
authorities, such as the tax authority.
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2. Specification of existing data
Data in connection with the Entrepreneur (*considered restricted data):
o Name*
o Age
o Gender
o Location
o Company Name
o returnin
o Tax Number*
o Number of Chamber of Commerce
o Crowdfunding Period
o Crowdfunding Target Sum
o Sector
Data in connection with the Investor:
o Name*
o Age
o Gender
o Income*
o Location
o Type of Investment
Data in connection with the Type of Investment:
o Date of Investment
o Amount of Investment
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Following up on the specification of available data a wish list of additional data can
be set up in order to create an overview of the kind of data that should be provided
additionally in a live feed. Data can be attributed to the categories
Entrepreneur/Project, Platform and Investor/Funder. A distinction can be made in
each category between data applying to a short-term and/or a long-term data feed:
3. Data wish list: Entrepreneur/Project
Short-term:
o Age
o Gender
o Area and Sector
o Spinoffs
o Location
o Other Sources of Finance
o Way of Presentation
o Fee
o Interest Rate
Long-term:
o Reporting of Project
o Fulfillment Data
o Success
4. Data wish list: Platform
Short-term:
o Profit Margin
o Operating Cost
o Location
o Qualification
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o Secure Communication
o Business Model
o Legal Structure
o Language
o Contract Types
Long-term:
o Protection of Investor and Entrepreneur
o Verification
o Member in an accredited trade Association (e.g. ECN)
5. Data wish list: Investor/Funder
Short-term:
o Age
o Gender
o Income-Range
o Type of Investor (Individual/Institution)
o Geographical Location
Long-term:
o Tax situation
5.4.3.2. Crowdfunding platforms : Additional dimensions
Introduction
In order to define the detailed taxonomy variables and dimensions, we have conducted additional
analysis on a random sample of crowdfunding platforms active in the various main types of
crowdfunding (1. Donations, 2. Reward-based, 3. Equity, 4. Debt). This analysis enabled to define
further some specific dimensions that would not have identified in the previous design process.
Remarks: This analysis is to be understood as complementation to the initial taxonomy design. It has
be conducted with the objective to be as exhaustive and complete as possible with regard to the
purpose of the work package and potential usage of this taxonomy.
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Nevertheless, this complimentary analysis carries some limitations:
- Other types of crowdfunding that are not mainstream (such has hybrid forms of funding, or
revenue sharing securities) have not been considered
- Differences in the regulatory requirement imposed by national legislations have not been
taken into account.
- IT related or technical variables used for platform operations have not been considered
Donations crowdfunding platforms: Additional dimensions / variables
Campaign variable added: Tax deductible
Tax deductibility is an important driver of donations-based platforms. Therefore we have
added this variable. It defines whether a particular campaign yields to tax deduction for the
target contributors. If the campaign is open to both Individuals and Companies, or even to
contributors in all countries, it should be tax deductible to all possible campaign contributors
to be considered as tax deductible.
Tax deductibility will provide fuel to crowdfunding platform in the long term as it provide
incentive to be involved and finance community projects; or those projects that fulfill a
particular policy agenda.
Reward-Based crowdfunding platforms: Additional dimensions / variables
Campaign variable added: Campaign period (Actual)
Campaign variable added: Campaign period (Planned)
A set of two additional variables have been added to assess the dynamics of the
crowdfunding campaign in terms of campaign period impacts on other variables (e.g. Total
Amounts raised, Audit Status, or other metrics). The variable Campaign period (Actual) can
also provide insights in the impacts from Entrepreneur / Company characteristics on possible
discontinuations of campaign against the Campaign period (Planned). As an absolute
measure, it can also help define explanatory variables on the differences often encountered
in reward-based crowdfunding.
Campaign variable added: Campaign Trigger
Some reward-based campaigns do display a minimum amount to be reached in order for the
fund transfer to be completed between the contributors and the entrepreneur / company.
This particular threshold needs to be captured in the taxonomy in order to make further
analysis and define potential impacts on other variables (most obviously on the campaign
success itself). For a campaign in “all-or-nothing mode”, this amount will equal the Campaign
Target. For a campaign run with continuous contributions, this Campaign Trigger variable will
be 0.
Equity & Debt crowdfunding platforms: Additional dimensions / variables
Project variable added: Total Project Funding Amount
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For financial investment, having an indication of the total project funding requirements is a
first key step to understand the proportion of funding (and therefore the potential risk)
sought after crowdfunding investors. The Total Project Funding Amount can be higher than
the Target Amount sought on crowdfunding platform. For instance, for equity crowdfunding
campaigns the Total Project Amount will be equal to the capitalization (value of all shares) at
the same valuation for the equity crowdfunding campaign.
5.4.4. Data Groups
When analyzing both the proceeds from the High Level workshop and the experts review process, we
can draw five categories of variables defining the crowdfunding activity:
ENTREPRENEUR / COMPANY
PROJECT
CAMPAIGN
INVESTOR / CONTRIBUTOR
CF PLATFORM
The variables have been derived and summarized and presented here below within a global
structure. In general practice, the overall relationship between the different variables group are as
follows :
Some remarks about cases were data groups may be assimilated. For instance, an equity
crowdfunding project carries the same nature as the entrepreneur / company itself, which means
that the characteristics of the “Project” and the “Entrepreneur / Company” will be merged to a
certain degree. Also, potential relationships between variables have not been fully defined and
documented (as a multi-dimensional presentation tools would then be required).
Further in this document, variable codes are provided for the ease of reading, based on this format:
#XXXX
Project
Campaign
Entrepreneur / Company
Investor / Contributor
CF Platform
1 n
1 n
1 n (practice)
n n (theoretical)
1 n (practice)
n n (theoretical)
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The first digit defines the level of the variable and dimension described. When first digit is “1” means
it is a topline definition, when first digit is “2” it means it is a sub-definition or sub-dimension of a
specific level 1 value; and so forth. Following four digits have been generated in a purely ad hoc basis.
The last field Recommended restricted access stands for those variables that could be collected by a
central body, however not be publicly available for certain Projects or certain Contributors.
Nevertheless there may be aggregated or non-nominative analysis published.
5.4.4.1. Data Group : ENTREPRENEUR / COMPANY
Code Variable Label Level Unit Description / Meaning Recommended
restricted access
1ENTP Entrepreneur Type 1 Individual / Company This variable defines the beneficiary of a campaign;
whether it is a legal entity or a natural person. No
1ENLO Primary Location 1 City Primary location of the entrepreneur or the company No
2ENTX Tax Number* 2 Number Only applicable for a Company (legal entity) Yes
2ENRE Number of Chamber of Commerce 2 Number Only applicable for a Company (legal entity) Yes
2ENAG Age 2 Year of Birth Only applicable for Entrepreneurs (natural persons) No
2ENGE Gender 2 M / F / Other Only applicable for Entrepreneurs (natural persons) No
2ENEN Number of Employees 2 Number Only applicable for a Company (legal entity) No
2ENIC Income (Individuals) 2 Euros Only applicable for Entrepreneurs (natural persons) : Gross
Income Yes
2ENRV Revenues (Companies) 2 Euros Only applicable for a Company (Legal Entity) : Last years
Revenues No
2ENPF Profit & Loss (Companies) 2 Euros Only applicable for a Company (Legal Entity) : Last years
Profit & Loss No
2ENSH Shareholders (Companies) 2 Main Shareholders list Only applicable to Company : List of Main Beneficiaries Yes
2ENYE Year Established (Companies) 2 Year Year in which the company has be founded or registered, if No
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it is a company that does a crowdfunding campaign.
5.4.4.2. Data Group : PROJECT related
Code Variable Label Level Unit Description / Meaning Recommended
restricted access
1ENLO Primary Location 1 City - No
1PJDE Founders degrees 1 Value list
Not specified Lowest level of degree from the Entrepreneurs / Company (when
individuals) No
1PJCO Customers number 1 Number N umber of customers (or amount of engaged community) when
starting the crowdfunding campaign No
1PJIC Intellectual Property (Patents, Brands, domain name, etc.)
1 Not Specified Qualitative information about the intellectual property that the
project embeds or uses (at the start of the crowdfunding campaign)
Yes
1PJCM Major commercial contracts 1 Not Specified Qualitative information about the major commercial contracts
that the project embeds or uses (at the start of the crowdfunding campaign)
Yes
1PJOF Other Sources of Finance 1 Yes / No Indicator about the presence of other sources of funds for the
project (at the start of the crowdfunding campaign). No
1PJAM Total Project Funding Amount 1 Amount (in Euros) The total budget for the project. If it is the company, the
shareholder equity value. No
1PJSE Sector 1 Value List
Unspecified Sector of activity of the project. Product / Services nature No
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2PJSS Sub-Sector 2 Value List
Unspecified Sub-Sector of activity of the project. Product / Services nature.
Additional level of detail depending on the Sector variable No
1PJSO Social Media links 1 Text String The links to the social media profiles Yes
1PJSI Spinoff / Startup 1 Dummy Variable (Spinoff /
Startup)
This variable indicates whether the project is managed or spun off out of an existing company. If it is a new project with an individual
entrepreneur then it will be a Startup. No
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5.4.4.3. Data Group : CAMPAIGN related
Code Variable Label Level Unit Description / Meaning Recommended
restricted access
1CPTP Campaign type 1 Type of investment : List of
possible values Donations; Reward-Based; Equity; Debt; Other Financial ; Other
Non-financial No
1CPPP Campaign Period (planned) 1 Days Length in days during which the Crowdfunding campaign is
supposed to last (at the date of the launch) No
1CPPA Campaign Period (actual) 1 Days Length in days during which the Crowdfunding campaign has
actually lasted in reality. No
1CPTA Campaign Target 1 Euros Amount in Euros that is displayed as a target amount to raise on
the project. No
1CPTR Campaign Trigger 1 Euros Certain amount that will trigger the Fund transfer (See Variable "Amounts Transferred"). Per default is equal to the Campaign
Target, but can be different No
1CPAR Amounts raised 1 Euros Actual or pledged amounts from the contributor. The Variable "Amounts Transferred" defines whether the campaign is been
liquidated in to the benefit of the Entrepreneur / Company No
1CPAT Amounts transferred 1 Yes / No This is a proxy in order to define whether the campaign was
successful. No
1CPNI Number of investors / contributors 1 Number Number of contributors until campaign is closed (regardless of its
actual Transferred amounts) No
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1CPAV Average Fee 1 Average % commission cost The average cost (incl. Taxes) that has been charged by the
platform (on the amounts raised when Amounts transferred ; on the Campaign Target when the Amounts are not transferred)
No
1CPAF Fee Amount 1 Commission cost (in Euros) The exact Amounts charged to the campaign by the crowdfunding
platform (incl. Taxes) Yes
2CPIT Interest Rate 2 Interest rate (p.a) Only applicable to loans No
2CPTD Tax deductible 2 Yes / No When the contribution is tax deductible for the contributor. This
indicator is set to "Yes" No
2CPST Status 2 Values : Completed / Ongoing / Defaulted /
Transfered This is the status of the current project. No
2CPIN Investors / Contributors names 2 Text String List of investors / contributors names. If possible with related
amounts pledged or transferred (see variable "Investors / Contributors pledges)
Yes
2CPPL Investors / Contributors pledges 2 Amount String (in Euros) Details of investors / contributors pledged amount. If possible
with related names (see variable "Investors / Contributors names) Yes
2CPRE Reviews linked to public profiles 2 Text String Qualitative data input from reviewers and opinion makers input
about a specific project No
Variable Code : 1CPTP
Label : Campaign Type
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Detail : The type of support provided by a contributors into a specific project or product / services development initiative. It is defined regardless of the type of project holder it can be a
financial or non-financial support.
Value Code Label Description
P Donation Philanthropy based funding. The contributor does not expect a financial or tangible return on his financial support
R Reward-Based Funding based on the acquisition of a benefit that may be tangible of intangible. The reward has to be delivered by the project holder
(immediately or in the future).
E Equity Funding is provided against straight equity shares in a company, or a management entity.
D Debt Funding is provided against a debt claim on the company. The debt may carry interest or not.
O Other Financial Other types of funding including participative debt, convertibles debt, revenue sharing agreements, …
S Other Non-Financial Other types of support (marketing, field activities, work contribution, …) that does not involve an immediate or differed financial
contributions into a crowdfunding campaign. Remark : Some variables such as Amount may not apply for this type
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5.4.4.4. Data Group : INVESTOR / CONTRIBUTOR related
Code Variable Label Level Unit Description / Meaning Recommended
restricted access
1COTY Investor Type 1 Individual / Company / Not
for profit / Government The type of contributor for a crowdfunding campaign No
2COTA Age 2 Year of Birth - No
2COTG Gender 2 M / F / Other - No
2COIR Income / Revenue 2 Euros Gross global income for individuals / Gross Turnover for
companies No
1ENLO Primary Location 2 City - No
1COAI Amounts invested (per platform) 1 Euros
Structure Unspecified Analytic measure of the total amount invested (where amounts
transferred) for each platform No
1COIN Number of investments made (per platform)
1 Number
Structure Unspecified Analytic measure of the number of campaigns participated (where
amounts transferred) for each platform No
2COIS Total number of investments made to date
2 Number Analytic measure of the total number of campaigns participated
(where amounts transferred) for all platforms No
2CODE How many investments defaulted 2 Number Analytic measure of the number of investments where the project
defaulted (See variable "Status") No
2COLF Most frequent investment location 2 City The specific city that gathers most investment contributions (in
number of campaign contributed) for a single contributor / company
No
2COLN Number of invested locations 2 Number The number of different cities where projects are based and have
No
19 April 2014 www.crowdfundingnetwork.eu Page 71
been invested in
5.4.4.5. Data Group : PLATFORM related
Code Variable Label Level Unit Description / Meaning Recommended
restricted access
1PFCO Company Name(s) 1 List of Company names operating the platform
The legal entity that is operating the crowdfunding platform (or the legal entities names that are part of the crowdfunding
operator group). Yes
1PFBM Business Model 1 Text Description of the platform business model and services offering
(Qualitative information) No
1PFCF Campaign Types 1 See [Campaign Type |
Campaign] See [Campaign Type | Campaign] No
2PFCT Contract Types 2 Not Specified Depending on the Campaign types : Defines the types of financial
contracts offered to contributors No
1PFOP Countries of operations 1 List of countries Countries where the companies is taking contributions from
Investors / Contributors No
1PFLO Headquarter location 1 Country The Country of the main offices of operation. If not available the
country of the main operating company. No
1PFLA Languages 1 Languages Values Languages in which the crowdfunding platform website
operates No
19 April 2014 www.crowdfundingnetwork.eu Page 72
1PFLE Legal Structure 1 Not Specified Legal structure of he headquarters company. When several
companies form a group a string of values could be provided.
No
1PFTA Member in an accredited trade Association (e.g. ECN)
1 Yes / No - No
1PFAS Names of Associations 1 Text String The names of the different Association the platform is
affiliated to No
1PFOC Operating Cost 1 Euros Direct Operating Costs generated by the crowdfunding
platform activity. Based on declaration from the crowdfunding platform
Yes
1PFPF Profit 1 Euros Direct Operating Costs generated by the crowdfunding
platform activity. Based on declaration from the crowdfunding platform
Yes
1PFPT Protection of Investor and Entrepreneur
1 Not specified Qualitative information on the level of protection provided
by the crowdfunding platform. (Due diligence processes, guarantee funds, additional risk reduction measures,…)
No
1PFLI License 1 Text Qualitative information on whether a platform possesses a valid license or mandate from supervisory body to conduct
its activity No
1PFSC Secure Communication 1 Indicator
Not specified Measure of the IT security surrounding the platform, in all
its locations of operations No
1PFAU Audit status 1 Indicator
Not specified Qualitative information related to the audit status of the
operating entiti(es) No
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