Crowdfunding in Europe

Earlier this month, Sponsume took part in a one-day workshop on crowdfunding organised by European Union Commissioner Michel Barnier.

Specifically, the workshop addressed the following questions: What drives the growth of crowdfunding and what are the obstacles to it? Can it help to fill the financing gap for small firms and start-ups? How do philanthropic, artistic and social projects use crowdfunding? What are the opportunities and risks in product pre-sales? How do peer-to-peer lending and equity-based crowd investment perform; what are their advantages and pitfalls? And how to ensure the integrity of these models of crowdfunding and protect contributors?

Sponsume's Founder's Gregory Vincent was there to discuss the reward-based model of crowdfunding. Greg explained that crowdfunding was not a new phenomenon, reminding the audience that the Statue of Liberty itself had been crowdfunded using a reward-based system in the late 19th Century (backers got miniature replicas of the statue in exchange for their financial support).

Greg listed the advantages of reward-based crowdfunding: namely fundraising, raising awareness and building community; unleashing innovation. He pointed out that reward-based crowdfunding was much simpler than financial forms of crowdfunding and therefore contained lower and fewer risks. 

Greg also explained that in these times of austerity, crowdfunding had become a lifeline for many artists, creatives and innovators in Europe and elsewhere.

He finally stressed the need for governements to consider encouraging crowdfunding by granting backers some form of tax relief - similar to that already enjoyed by other types of donations (e.g. Gift Aid in the UK).

You can watch the event here. Greg's presentation starts at 140". The video also features interventions by EU Commissioner Michel Barnier and SEC Chief Counsel David Blass (among others).