crowdfunding.de: How did you find to crowdfunding and what makes it so fascinating for you?
Ronald Kleverlaan: I got in contact with Crowdfunding in 2008 when my previous ICT company was asked to build the first Dutch donation based crowdfunding platform for a new NGO that wanted to give people the possibility to donate money directly to specific projects and inform them with updates on the progress. After that we developed a lot of crowdfunding platforms for clients (donation, reward-based and investment based crowdfunding platforms) and won several prices with our Crowdfunding Software solution. During that time I was fascinated to see the possibilities Crowdfunding offered to project starters, from artists to small business owners to large sustainable energy projects and I published a lot of articles about my insights and organized a lot of workshops and spoke on conferences about these possibilities. Acouple of years ago I decided to sell my company and focus completely on the education and promoting of the Crowdfunding ecosystem. I co-founded with some people the European Crowdfunding Network, the European Association for Crowdfunding platforms and was Board Member for 2 years. Last year I decided to start working more on education and research and therefore launched CrowdfundingHub.
What is the idea behind the CrowdfundingHub?
CrowdfundingHub is the European Expertise Centre for Alternative and Community Finance. We are a specialized research and consultancy firm and do research and educational projects for governments (European/national/local) and support alternative finance platforms with their strategy and growth and connect them with their peers in other countries and coporates that want to work together with them.
How developed is crowdfunding in Europe, if you compare it to crowdfunding in other parts of the world as Asia or the US?
As shown in our reports, Crowdfunding is very different developed in several parts of Europe. The UK is one of the global front-runners with high volumes, good regulations and a healthy eco-system. Overall the European market is highly fragmented, but in a lot of countries Crowdfunding is really getting started. But still in most countries volumes of crowdfunding are far below 1% of funding needs for companies, so a lot still need to be done. US is still waiting for JOBS-act implementation. But even after this is started, (equity) crowdfunding will still be highly restricted and not as open as in Europe. Asia is just getting started. China is the exception with high growth and volumes in P2P-consumer lending, but also with unclarity about regulations and the first cases of massive fraud. That market still need to become more mature.
What can governments do to stimulate crowdfunding?
They could start by creating clarity on regulation regarding crowdfunding. Not only regulations for platforms, but also clarity on taxes. Furthermore promoting crowdfunding by co-investing through existing crowdfunding platform (such as the British Business Bank is doing) helps the industry by not only providing extra liquidity in the market, but also as a quality statement to other investors. A last support opportunity is a tax-incentives. In the UK he SEIS tax incentives gives investors tax incentives for investing in startups through alternative finance.
The CrowdfundingHub published a report about liability risk of cross border crowdfunding. What are the key findings?
The main findings are that cross-border investment in Europe is still complex and that several type of regulation apply. Especially with lending-based crowdfunding a lot of countries have very specific additional regulations. With equity-based crowdfunding this is more harmonized, but even here in some countries (such as Germany) very different adjustments are implemented.
What kind of trends and developments do you see for the next years?
Although we don’t have one Capital Market Union in Europe yet (and full harmonization will most likely never come) we will see more pan-European investment crowdfunding platforms. Because of differences in regulations this will be mergers or cooperation between several platforms. Lending based crowdfunding will be more regulated (EBA) and act as new online banks for consumer and business credit and equity platforms will be more integrated with business angel networks and traditional security exchanges and will be regulated by ESMA. For reward-based crowdfunding a lot of fragmentation will always exist, although here also some pan-European (or global) network will be launched.
Thank you for the interview!