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Crowdfunding is on the move!


Crowdfunding is on the move. In Europe a growing number of people invest in projects through crowdfunding platforms. According to Forbes, the crowdfunding industry has grown by 144% last year. The highest growth was observed in the UK and France, where the industries are currently valued at EUR3.56bn and EUR254m respectively.
In Switzerland, crowdfunding is still seen as a new kid on the block. This is surprising as Switzerland fulfils all the right economic preconditions for the crowdfunding magic formula to work.

Several success stories

A lot of the success is attributed to the fact that these crowdfunding platforms attract unique and innovative projects. Crowdfunding platforms have already funded many ground-breaking projects, such as:

  • Oculus is an innovative virtual reality headset that managed to raise just under $ 2.5m through crowdfunding. In March 2014, Oculus was bought by Facebook, for $ 2bn. Currently they collaborate with Samsung.
  • 3Doodler got people to contribute a whopping 2.3m, to make their dream of a 3D drawing pen reality.
  • Solar Roadways is a project that got a lot of media attention thanks to its revolutionary concept. Solar roadways managed to raise over $ 2.2m for the development of solar panels for roads. If Solar roadways penetrates the market, greenhouse emissions could potentially be reduced up to 75%.

Crowdfunding models

There are plenty more revolutionary projects that already got funded through crowdfunding platforms, and many more will be funded in the future, mainly because entrepreneurs find it easier to get financing through crowdfunding platforms for innovative business ideas. Today there are three different crowdfunding models:

  • Reward based – giving a donation for which you get a token in return.
  • Debt based – Lending money and getting regular interest plus repayment of principal at a future date.
  • Equity based – Where investors invest money into a company of cooperative, and acquire a share of this company or cooperative in return, giving them rights to dividends and capital appreciation, if any.

The latter two models attract investors that not only want to fund projects which will have a positive impact on the world around them, but will also generate substantial returns.  In essence, crowdfunding allows small and medium investors to assume a role that was previously taken by banks. This gives investors an opportunity to generate larger returns on their capital as opposed to leaving their money on a depository account, while the bank gives out their money as loans and generates substantial returns. At first sight crowdfunding looks like a “win-win” situation.
But as in most cases there is a catch – with higher returns come higher risks. Investors must select very carefully what type of project they choose to invest in. They must also understand the risks they are taking, depending on the nature of their investments and be able to withstand losses. Therefore picking the right industry and product to invest in, depending on one’s specific situation, is vital.

Today, there are a lot of crowdfunding platforms that specialize in all kinds of sectors: technology, real estate, arts, etc, you can even ask for crowdfunding if you want a new haircut and can’t afford it.

Renewable Energy and Cleantech Platform

Veolis is unique due to the fact that it specializes in sustainability investments, and is solely focused on Swiss-based or Swiss-led projects.  Veolis provides all the necessary tools for investors to pursue projects in the renewable energy sector. With Switzerland announcing its 2020 energy research program, where it plans to decommission old nuclear power plants, renewable energy will certainly come in handy.

One of the projects that Veolis is currently seeking funding for is in Tuzla, Bosnia, but is led from Switzerland by a Swiss NGO. With a strong background in the clean-tech industry, Dzemila Agic, the head of the center for environment and energy in Tuzla, wants to create a training course (apprenticeship) that will teach young professionals about eco-construction, which will yield long term ecological benefits to the whole region. She believes that with her motivation and your help, change for the better is possible! Find out more here.

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