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Sunday, July 3, 2022

Nordics Embrace Crowdfunding

With project after project hitting higher and higher goals on Kickstarter (a watch just hit $7 million of its $100,000 goal) one can say the crowdfunding industry is hot. The U.S. is also opening up equity crowdfunding for startups, which could usher in a new era of startup investing. Perhaps it’s just hard to compete against the noise and hype of the U.S., but the Nordic region also has a couple platforms that can get your startup funded though both Kickstarter-like gifting and equity crowdfunding.

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FundedByMe – Sweden

This Swedish crowdfunding site has probably seen the most traction in the Nordics, with 1 196 199,58 kr (€135,000) in pledges gathered from 3723 people for 318 projects. This site offers a variety of projects to support using the gifting “kickstarter” model, and includes projects such as a film festival, a website to track and increase engagement with the Swedish parliament, and a roll-playing game.

FundedByMe also provides up to 50% finance guarantee for tech and internet projects from Internetfonden, the .se domain registrar. The company also seems to be dabbling with an equity crowdfunding model, but it’s been under beta for a couple months.

GrowVC – Finland/Global

GrowVC is an equity crowdfunding service with offices in the US, UK, and Finland. The company allows startups to raise funding up to $1 million. They currently have 3,429 startups registered. GrowVC funds startups by pooling membership fees into a fund. According to their website:

Members can get a micro investment plan, where they can start funding startups for as little as $20 per month. These micro investments are aggregated and facilitated by Grow VC, where the investments are made based on the members indications. If these startups generate a return in the future, each member that made micro investments into the successful startup will gain a reward.

Venture Bonsai – Finland

Venture Bonsai also does equity crowdfunding for European startups. Full disclosure, I used to work for Venture Bonsai, but they allow a straightforward share issue and the platform is sure to follow european legislation. Currently a couple companies are looking for funding, but aren’t seeing much traction.

Run Your Own Crowdfunding Round

That’s what the guys at NetOutlet.com are doing at least. The founders have the idea of loading a webshop up with many more social features and is only really at the concept stage. Being two non-technical cofounders they’re raising money through donations on their website get the service fleshed out. To keep their funders motivated, they’re doing a music video, throwing a party, and other activities at each milestone.

…We began exploring the idea of pooling smaller resources together to fund the proof of concept. While doing research on whether this had ever been done before, we stumbled upon crowdfunding, an established concept in the US and UK, where individual donations are pooled to fund everything from start-up businesses to art projects. We were surprised to see that some projects had seen donations that totaled millions of dollars. Also in Finland, crowfunding had been used to finance part of the production of the movie Iron Sky, raising some US$600,000. That was when we decided we wanted to be the first start-up business in Finland that was crowdfunded and NetOutlet: The Quest for Funding was born.

They’ve raised €2.5k so far, and I imagine they’ve got a long road ahead of them before they hit €75 000 within 46 days. But they’re out there, and they’re going for it.

Crowdfunding is a tough, uphill battle for pretty much any startup on a funding platform. Equity Crowdfunding has seen unexciting successes so far, but it will be interesting to see what happens when the Americans get some skin in the game. Indiegogo (a large kickstarter competitor) is international, but hasn’t pulled the big numbers that the U.S. only Kickstarter has been able to hit. Crowdfunding is somewhat mainstream in the U.S. now, and Americans know how to hustle.

One thing important to keep in mind, when you’re trying to raise money from the general public is you’re nor really selling your product, you’re selling your story. For better or worse, the types of project that have been successful so far seem to really tug at people’s emotions — think Diaspora for example.

Still, project funding seems to be moving toward the crowd, so it will be an area to watch in the next couple of years.

Top image by Public Domain Photos on Flickr.

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