It should be the perfect storm: take one hotbed of ICT start-ups, a culture of entrepreneurship and a culture of early adoption when it comes to the latest tech development, and add reward-based crowdfunding. ICT entrepreneurs should be flocking to crowdfund their latest app, game or innovation. And yet they’re not; while arts and culture has embraced crowdfunding as a way for filmmakers to stay independent, Swedish ICT entrepreneurs aren’t as interested – when it comes to the local sites, that is.
Instead, big names like Volumental and Memoto are flocking to Kickstarter. On the face of it, this might be because the reach of the platform is larger – and, indeed, that perception exists. According to a recent report on the state of crowdfunding among ICT entrepreneurs in Sweden, ICT entrepreneurs do think that there is more money to be made on American platforms like Kickstarter and Indiegogo.
But that’s not the whole story. With the highest (relative to GDP) venture capital investment value in Europe, it’s also true that Swedish entrepreneurs have gotten used to raising funds a certain way – and getting benefits over and above funding from their investors.
In the eyes of many Swedish ICT entrepreneurs, “investment” is not just about money: while money is important, it is considered “available”. Instead, the best investments bring things in addition to money to the table – they bring a business network, mentorship, skills, and ideally the implicit knowledge of a serial entrepreneur. In addition to the perception that the Swedish reward-based platforms won’t prove lucrative, entrepreneurs want the icing – often vital to an entrepreneur’s success – that traditional investors bring with them.
Instead, a new model of crowdfunding is emerging in Sweden. Where crowdfunding has been a big disrupter in the US and elsewhere, in Sweden both entrepreneurs and crowdfunding platforms see the publicity – and money – that come with crowdfunding as a way to test the market and signal value to more serious investors.
Of course, these findings only apply to reward-based crowdfunding among ICT entrepreneurs. Equity crowdfunding is a whole different story, perhaps because it resembles traditional investment, even. Nevertheless, an interesting finding.
You can read the full report “Crowdfunding Among IT Entrepreneurs in Sweden: A Qualitative Study of the Funding Ecosystem and ICT Entrepreneurs’ Adoption of Crowdfunding” (June 1, 2013) here.
A PhD student and voracious reader based in Stockholm, Claire Ingram is interested in open innovation, co-creation, start-up funding, public policy and pictures of puppies on Reddit. You can contact her on Twitter @Claire_EBI.