Nothing could beat the pleasure of starring at a packed auditorium while I was waiting for the opening talk of the Zagreb Crowdfunding Convention and thinking back of the months of preparations behind us. Industry experts, NGO’s and private companies, government representative and numerous curious individuals - we got them all at one place to discuss future of crowdfunding in our region!
We’ve been intensively focusing our work on a variety of crowdfunding activities in order to climb closer to the goal we’ve set more than one year ago, when we co-founded the Crowdfunding Academy. That was to contribute to the development of a crowdfunding market in Croatia. Our Zagreb Crowdfunding Convention event nowadays comes as a manifestation of that goal. It’s the one day of the year when all these activities interconnect and fall on one common ground, ready to grow into something bigger and better. Task for the day? Exchange of practices with an aim to intensify the current market expansion!
Where Do We Stand?
The key talk of the event came from Ronald Kleverlaan, one of the most active names on the European crowdfunding scene. According to the Alternative Finance Maturity Index presented by Kleverlaan, Croatia is currently at the starting, first of five levels of the market maturity.
The first, pre-mature level, includes an open dialogue between the government and the industry, simple regulations and financing educational programs, while the industry organizes informal roundtables, works with independent advisors, publishes educational articles, organizes local events and has uniformed taxonomy.
Croatian crowdfunding scene currently includes three active crowdfunding platforms - Croinvest, Croenergy and Čini pravu stvar, one educational platform - the Crowdfunding Academy - financed by the nonprofit organisations, yearly statistical overview of the market growth and informative blogs about crowdfunding, as well as few crowdfunding events per year, such as Zagreb Crowdfunding Convention. We mainly use reward-based crowdfunding model and have been following the European-wide trend of doubling in market size from 2014 ($402,898) to 2015 ($751,457). Our dialogue with the government still remains on the level of informative discussions, though government’s representatives at the Zagreb Crowdfunding Convention event show support and interest for more participation in the crowdfunding activities in Croatia. We have no legal regulations regarding the use of crowdfunding, though legislation regarding business financing is applicable in use of different models, such as crowdlending.
According to Kleverlaan, market growth depends on variety of factors - from the general economic situation, legislative and policy framework to trigger events, such as economic crisis. Following the Alternative Finance Maturity Index, starting point should include identifying market’s current point of development, while the next step should include targeting the base-points that can be used for further upgrading. On the example of the Alternative Finance Maturity Index, informal industry events on the pre-mature level turn into organized industry events in the expansion market level, while in the competition market level industry they become integrated with traditional finance industry events. Meaning, markets can build upon their current status and strengths.
As Kleverlaan pointed out, the next stop on the Maturity Index, the expansion level, includes taking open dialogue with the government to the point of funding different stakeholders in the crowdfunding industry, as well as its open support, research and promotion. At the expansion level industry includes accountants and financial advisors in its work, organizes larger, nation-wide events, launches industry-wide associations, trains advisors and shares success stories.
What other speakers at the Zagreb Crowdfunding Convention, such as Irene Demetriou Rotsides, founder of the Crowdfunding Cyprus, and John Burton, researcher at the Cambridge Centre for Alternative Finance highlighted - none of the possible steps in market development will be effective if they won’t be undertaken in cooperation with the government. While we head into that direction, let’s keep in mind one motivational estimation that Kleverlaan made during his talk at the event - we’re a part of the East-European, billion euro potential market.