The social impact of equity crowdfunding
Who invests in Startups and SMEs in Spain? Professional Business Angels or Venture Capital firms? Is there no other alternative to raise capital for small companies?
Is there no one else?
Most Spanish entrepreneurs and business people think that there are only two options for financing their projects. Finding a business “patron” with money seems to be the only alternative for developing their project. Otherwise, they will have to resort to traditional bank financing, which is not always possible and implies, in addition to high costs, the need, on most occasions, for personal guarantees or collateral.
As a way of tackling this problem, in 2015 the Congress of Deputies passed Law 5/2015 on the Promotion of Entrepreneurial Financing with the aim of regularising and boosting alternative investment, especially equity crowdfunding. This opened up a third way for entrepreneurs and offered any citizen a framework with guarantees to be able to invest in Spanish start-ups and SMEs.
A fantastic opportunity for citizens to participate and actively support the development of Spain’s business fabric.
Supporting the companies of the future: a commitment to the future
With the regulation of equity crowdfunding, a form of collective financing through the acquisition of part of the capital of companies by a more or less large number of small investors, a fantastic opportunity opens up for all citizens to participate and actively support the development of Spain’s business fabric.
Law 5/2015, in addition to regulating the activity of equity crowdfunding, is a law with a strong social impact, both for entrepreneurs and investors. From 300 euros, anyone can support a business project that will grow and can become a successful company, while at the same time being an engine for job creation in very significant numbers.
Who doesn’t remember the Matildes of the 1950s? They were a way of offering anyone the opportunity to contribute to Telefónica’s success to the best of their ability.
Who would not be proud and even happy today to have invested in companies of the last century like Inditex, Telepizza, Ferrovial, Eulen, or more recently MásMovil, today’s undoubtedly successful companies, but which at the time were incipient start-ups or simply SMEs “with aspirations”?
Equity crowdfunding at the service of entrepreneurs and investors
The alternative investment model is a phenomenon that is here to stay, and equity crowdfunding is an effective and transparent method of contributing to the financing of companies in their development stages.
Companies such as Elbernabeu, Fotawa, CocoPi Food, Natur Drinks o recientemente Rocking Baby (BabyMico) are some examples that have found through the Fellow Funders platform a formula to make themselves known and finance their projects with the support of dozens of new investors. Most of these investors have decided to support these projects because of the growth potential, the human team and, why not, the proximity to the entrepreneur (they have been able to talk to them through a chat, they have had access to a videoconference to raise all doubts, they have been able to consult all the documentation and the legal, financial and technical due diligence, etc.).
Most of these investors have decided to support these projects because of the growth potential, the human team and the proximity to the entrepreneur.
Every startup investment, no matter how small it may be, has an important social impact
Nowadays, according to some estimates that are perhaps too optimistic, there are approximately 50,000 people in Spain who have already made their first investment in SMEs or start-ups through the different equity crowdfunding platforms, which has made it possible for approximately 100 companies to obtain funding.
Imagine the impact that this form of crowdfunding could have if together we could popularise this form of investment and multiply these figures by 10 or even 100 times.
Fellow Funders sincerely believes that with professionalism, transparency and generating trust, equity crowdfunding can become one of the main sources of funding for Spanish startups and SMEs.
As Anatole France said, “The future is hidden behind the men [and women] who make it“, and the entrepreneurs and business people who will make this future possible will no longer be alone because many investors will be able to support them collectively through equity crowdfunding.
Do you want to join the Fellow Funders world? They are waiting for you!