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Crowdfunding
European Union Electricity Market Glossary

 

 

 

 

Crowdfunding refers to the financing of a specific project or venture by raising money from a large number of people.

 

Interaction between fund raisers and the crowd (fund providers) is enabled by specific websites (crowdfunding platforms).

 

Fund providers are increasingly institutional (professional investors).

 

European alternative finance market, which mostly consists of crowdfunding, grew by 92% since 2014, to reach a value of €5.4 billion in 2015.

 

Respective figures of the total online alternative finance volume for the Asia-Pacific region (mostly China) are in the range of €94.6 billion and for the Americas (mostly the US) of €33.6 billion (Inception Impact Assessment, Legislative proposal for an EU framework on crowd and peer to peer finance (Ref. Ares(2017)5288649 - 30/10/2017)).

 

The two distinct forms of crowdfunding are differentiated:

 

- debt-based crowdfunding (consumer and business peer-to-peer finance on the basis of loans) accounts for the largest share of the market; and


- equity-based crowdfunding, where the investor receives a share in the company, is particularly significant for the funding of business start-ups (it helps fill the gap in the funding escalator when start-ups go from initial stage financing through friends and family to attracting interest from business angels and venture capital).

 

 

  

 

 

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Inception Impact Assessment, Legislative proposal for an EU framework on crowd and peer to peer finance (Ref. Ares(2017)5288649 - 30/10/2017)

 

 

 

  

 

 

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Last Updated on Friday, 03 November 2017 21:58
 

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