Crowdfunding Talk

By Lendpool

“Crowdfunding Here to Stay”

Say French Collaborative Finance Players.

At the end of a full day of round table discussions focusing on collaborative finance, all the various players – from both the private and public sectors – seem to be in agreement: crowdfunding is now not a fairy tale but solid reality.

This is how François Carbone, President of France’s crowdfunding sector body the Association Financement Participatif France (AFPF), summed up at the close of the first-ever Paris Conference on Participatory Finance, held on 30 September. The AFPF team presented Fleur Pellerin, French Deputy Minister for SMEs, Innovation and the Digital Economy, with a discussion paper on Crowdfunding in France 2013.

In the first half of this year the various different crowdfunding platforms based in France raised a total of €30 million for project and company finance. If this figure seems rather paltry, it begins to make more sense when one realises that these funds were contributed by half a million French people to back 30,000 different projects. Moreover, if we want to understand the impact of crowdfunding it is not enough just to look at the figures. The crowdfinancing approach – which provides microfinancing or, at most, small scale financing – needs to be understood in the context of innovation development.
The various players at the conference underlined their firm conviction that this innovative method will remain an enduring approach to smaller business financing, perhaps more so in France than elsewhere.

Removing the mystique, bringing crowdfunding into the mainstream

Crowdfunding will endure, argued the various speakers, basically because although it is usually thought of in connection with new technologies, entrepreneurs and startup companies, these are certainly no longer the only ones to benefit from the new approach to financing.

With the growth of increasingly intuitive platforms and widespread means of making secure payment transfers on the Internet, many business people are now turning to crowdfunding to obtain finance. One example is Rosa Tandjaoui, who manages a book shop in Paris. She calls this phenomenon a “positive revolution”, stressing: “The Internet enables you to make a coherent proposal to the ‘crowd’ […] and we’re waking up to the fact that our customers can become our investors as well.” Secondly, rather than being sector-oriented, crowdfunding tends to be mainly about local action.
Whether within a given city, region-wide or country-wide, this phenomenon enables investors to take back control of their own territory, and this change of scale is strongly indicative of a general change of mindset as regards lending and investment. Moreover, as people who invest via crowdfunding sites are not traditional financiers, this process helps to remove the mystique and give crowdfunding real practical appeal. Nevertheless, there is one respect in which crowdfunding needs to change its public image, as Thierry Merquiol, founder of seed funding platform WiSEED, explains: “Crowdfunding and smart money are still seen as diametrically opposed, so we do have a real problem of perception […]. We co-invest with Business Angels and other players in order to bring our contribution more into the mainstream.”

Do you agree with this Crowdfunding talk? Your comments are much appreciated.