My most recent crowdfunding presentation: at Bright East in Linköping

1. Crowdfunding in
Sweden
Claire Ingram, Stockholm School of Economics
Robin Teigland, Stockholm School of
Economics

3. Stockholm success story:
Flippin’ Burgers
Money raised:
SEK 36,502 /
€4,000
Number of
investors: 186
Date funded:
September 2011
Sector: Food

4. Enabling local solutions
http://travel.cnn.com/best-americana-restaurants-europe-023346

5. What is crowdfunding?
Accumulation of small investments in
individual projects by large number of
individuals (the “crowd”) via or with help of
the Internet and social networks
(De Buysere et al., 2012)
Picture: FundedByMe

6. Form of Funding Benefits for Funders
Donation Donation Intangible benefits.
Reward Donation or pre-purchase
Rewards in addition to
intangible benefits.
Equity Investment Return on investment if
company does well.
Rewards sometimes also offered
and intangible benefits may
motivate too.
Debt Loan Repayment of loan with interest.
Alternatively intangible benefits
if loan given interest-free.
Royalty Royalty Royalties on creation. Also
potentially intangible benefits.

7. Investment Role and Type Investment Value, 2012
Angel
Investors
Invest large amounts, make few
investments and take equity
share.
3.3-3.9 billion SEK p.a.
(approximation, based on 2008
data)
Soft Loans
State loans at high interest rates,
but which can be written off on
enterprise dissolution.
2.4 billion SEK p.a. (ALMI
alone)
Venture
Capitalists
Invest large amounts, make few
investments and take equity
share.
1.8 billion SEK p.a. (2010 data)
Crowdfunding
Either donation, pre-purchase/
reward-based or equity,
depending on platform and
entrepreneur’s preferences.
Estimated 37 million SEK p.a.
(end of 2013)
Ingram & Teigland, 2013

8. Who are the funders?
Educated experts?
 85 % of respondents have university degree (vs16% of
women and 22% of men in general population, 2013)
 42% had knowledge in same field as project they funded
 49 % reported to have been better at judging project quality
due to previous experience
 The “in-crowd”
 47% of “the crowd” classified themselves as entrepreneurs –
compared to only 7 % of Swedish population (2012)
 77 % never bought shares in unlisted company before
 41 % risk lovers
Skoglund & Stiernblad 2013

9. Skoglund & Stiernblad 2013

10. Democratising?
• Women make up less
than 30 percent of
business owners in the
United States, and
fewer than 20 percent of
businesses that have
any employees other
than the business owner
herself (U.S. Census
Bureau 2010).
• Women make up less
than 15 percent of angel
investors and less than
10 percent of venture
capitalists (Coleman
and Robb 2012).
• On Kickstarter, women
made up about 35% of
the project leaders and
44% of the investors on
the platform.
• About 23% of projects
that men invested in
had female project
leads.
• More than 40% of
projects that women
invested in had female
project leads.
Marom, Robb and Sade 2014

11. What are the limits?
EU/EEA
No country can require a prospectus to be prepared
for rounds of less than 100 000 EUR
For rounds of 5 million EUR or more, an EU
prospectus is always required
In Sweden
The limit is 2.5 million EUR without a prospectus
Less than 150 ‘non-qualified’ investors without a
prospectus
ALSO shares in non-publicly traded companies
cannot be advertised in Sweden

13. Chris Devers on Flickr.com, available here: https://flic.

19. A true story
That made 2 million GBP for cancer research
at Uppsala University

20. Why crowdfund?
Test the market or establish a user base
Market your product or service
Obtain funding
Screening device for investors
Reach investors further afield or people without the
right “connections”
Because you can’t find other funding (be careful)
Because you think it’s easy (it’s not!)
Source skills and connections?
BUT in Equity crowdfunding: Lots of small investors
– a problem?
Ingram & Teigland, 2013

21. Requirements to succeed?
What kind of project is it?
Choose the right platform – and crowdfunding type –
for your project (keep in mind platform fees)
Make the concept easily understood
Make it personal?
Ensure that you have initial critical mass (social
media, newspapers) – NB in donation- and reward-based
“Feed the crowd”
Keep followers up to date

22. Some ”big” questions
Skills: How to ensure knowledge/awareness and
necessary skills for crowdfunding?
Lack of support and strategic advice for funders/investors,
entrepreneurs, public sector?
 How to deal with many small investors in equity
crowdfunding?
Regulation: How to protect investors without stifling
innovation?
 Cross border investments?
 Secondary markets for crowd equity shares?
Taxation issues for investors and entrepreneurs?
Local market: How to protect/ensure local markets
against foreign competition?
Local platforms vs global platforms?
 Significant/sufficient level of funding from local market?
 How to better leverage “crowd” for resources?

23. What’s Next?

27. Claire Ingram
Stockholm School of Economics
claire.ingram@hhs.se
@Claire_EBI