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Crowdfunding explained

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Crowdfunding is the practice of funding a project or venture by raising many small amounts of money from a large number of people, usually via the Internet. People can donate any amount of money for a single or multiple causes or projects, typically in exchange for various rewards.

There are three general categories of crowdfunding : Donation, Debt or Equity.

  • Crowdsupporting/-donating
    Donation-based crowdfunding is asking people to donate to your project in exchange for tangible, non-monetary rewards (Crowdsupporting) such as memberships, pre-released CDs, or the finished product, or asking for a donation with no reward (Crowddonating) for example fundraising for a humanitarian NGO
  • Crowdlending
    Debt-based crowdfunding is asking people to lend money to your business or project in exchange for financial return and/or interest at a future date.
  • Crowdinvesting
    Equity-based crowdfunding is asking people to invest in your business or project in exchange for equity.

The global crowdfunding market volume has now reached an impressive amount of 3 Billions USD. In that respect, the United States and United Kingdom are market leaders, thanks to flexible financial market regulations. In continental Europe, the development of crowdfunding options has been somehow hindered through loosely defined boundary conditions and regulations.
However the experience shows that it starts to appear on the political agenda and Europeans banks tend to start loosening their regulations and opening their door, perceiving that the crowdfunding is today’s and tomorrow’s way of building new projects.

The crowdfunding system reached the renewable energy sector in the last 3 to 4 years, and this new trend for developing clean projects is now active worldwide. The main active platforms in this sector are the following:

  • Trillion Funds (UK)
  • Abundance (UK)
  • Palmetto (USA)
  • Lumo (France)
  • CrowEnergy (Germany)
  • Veolis (Switzerland)
  • GreenCrowd (Netherlands)

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The swiss crowdfunding market is still at an early stage but has experienced a steep 3 digits yearly growth since the start of the first platform in 2008. In 2013, this financing solution already covered more than 11 Millions CHF investment requirements, with a 223% increase compared to 2012, and achieved a success rate of 64% over the 1125 projects.

Do you want to be part of this new trend?

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