A presentation of Crowdfunding in the Nordics. See a video of the presentation here: https://www.youtube.com/watch?v=PIf5IzEUkJU

1. Crowdfunding in the Nordics
Trends, Challenges and Opportunities for
Entrepreneurial Growth
September 2015
Shneor, Rotem

2. What is Crowdfunding?
Definition:
• “The practice of funding a project or venture by raising many small
amounts of money from a large number of people, typically via the
Internet”. (Oxford Dictionary)
What is it good for?
• Alternative source of early seed funding for entrepreneurial ventures.
• Conceptual fine-tuning through real-time interaction with stakeholders.
• Opportunity to recruit initial customer base and brand promoters.
Democratization
• Alowing more entrepreneurial ventures to launch.
• Allowing more investors to contribute to venture growth.

3. Where Crowdfunding Fits on the Funding Lifecycle ?
Amountofcapitalneed
Idea/
Inception
(based on: World Bank (2013) “Crowdfunding Potential for the Developing World”)
Prototype Startup Early
Growth
Expansion
FundingGap
Reward and
Donation
Crowdfunding
Equity and
Business lending
Crowdfunding
Venture Capital
Institutional
Investors and
Investment Banks
Angel Investors

4. Crowdfunding Types
Equity-based
Lending-based
- Funders receive an interest in the form of equity in the venture
they fund or, alternatively, revenue or profit-share arrangements.
- Funders often receive fixed periodic income and expect
repayment of the original principal investment. Split between:
- Peer-2-Peer consumer lending.
- Peer-2-Peer business lending.
Reward-based
Donation-based
- Funders receive non-monetary rewards often take the form of a
token of appreciation or the pre-purchasing of products or services.
- Funders donate to causes that they want to support, with no
expected compensation.
(Based on: Crowdsourcing LLC Report, 2012; EY-Cambridge Alternative Finance Report, 2015)

5. (Based on: Massolution 2015)
$9.46
Billion
$3.26
Billion
$3.4
Billion

6. • In 2014, the total volume of funds raised through crowdfunding grew
167% to reach USD 16.2 billion (Massolution 2015) .
• Massolution forecasts doubling in global crowdfunding volumes in 2015,
to USD 34.4 billion (Massolution 2015).
• World Bank Report estimates global volumes of investment
crowdfunding will reach USD 93 billion by 2025 (World Bank 2013).
• It is estimated that there are over 1500 active Crowdfunding platforms
operating globally.
• Lending-based is the largest category worth USD 11 billion in 2014, but
most attention on reward and equity (Massolution 2015).
Global Figures

7. • Entrepreneurship – $ 6.7 Billion.
• Social causes – $ 3 Billion.
• Films and performing arts – $ 2 Billion.
• Real Estate – $ 1 Billion.
• Music and recording arts – $ 735 Million.
Top 5 Most Popular Categories in 2014:
(Massolution, 2015)

8. Nordic Crowdfunding Facts and Figures
(Based on: EY-Cambridge Alternative Finance Report, 2015)

9. Nordic Crowdfunding Facts and Figures
(Based on: EY-Cambridge Alternative Finance Report, 2015)

10. • Crowdfunding in the Nordics is still new, but growing fast.
• Crowdfunding campaigns running on Nordic platforms during the last
two years have raised over EUR 25 million (excluding crowd-lending).*
• Nordic companies have raised over EUR 15 million by running
campaigns on global platforms such as Kickstarter and Indiegogo, as
well as localized platforms of other international players (i.e.
CrowdCube), and niche platforms (i.e. PledgeMusic).
• Overall, it is roughly estimated that (non-lending) Crowdfunding
initiatives involving Nordic companies comprise close to 6% of (non-
lending) European Crowdfunding volumes thus far.
Nordic Crowdfunding Facts and Figures

11. Sweden-based Earin raised USD 1,6 million for producing the world’s
smallest wireless ear buds.
Norway-based Red Thread Games raised USD 1,5 million for
developing a sequel to the successful ‘Longest Journey’ game series.
Sweden-based Laser Unicorns raised USD 630K for producing a film
titled “Kung Fury”.
Sweden-based Flyte raised close to USD 617K for producing their
levitating light bulb.
Sweden-based Memoto raised USD 550K for producing the Lifelong
Camera and App.
Denmark-based Full Control raised USD 368K for developing the
Jagged Alliance game.
Denmark-based Thermodo raised USD 336K for developing a
thermometer for mobile devices.
Nordic Stars on
(Source: http://www.kickstarter.com/)

12. Denmark-based Airtame raised close to USD 1,5 million for developing
their wireless HDMI solution.
Sweden-based Flic raised close to USD 896K for developing their
wireless smart button.
Finland-based Iron Sky Universe raised close to USD 786K for film
production as part of the Iron Sky film series (in 2 campaigns).
Sweden-based Wheelys raised closed to USD 473K for promoting
their mobile café concept (in 2 campaigns).
Norway-based Future Home raised close to USD 200K for developing
home control app.
Iceland-based MailPile raised close to USD 163K for developing their
Open Source Free web-mail client.
Swedish Minna Sundberg raised close to USD 151K for a hard-cover
print of the webcomic “Redtail’s Dream”.
Nordic Stars on
(Source: http://www.indiegogo.com/)
Minna Sundberg

13. Nordic Crowdfunding Platforms

14. Nordic Crowdfunding Alliance (Today)

15. • 69% of platforms operating in the
Nordic region indicate needs for
regulatory clarifications and
amendments.
• Denmark and Finland leading the
way.
Greatest Challenge: Existing Regulation
(Based on: EY-Cambridge Alternative Finance Report, 2015)

16. Virtual Starvation for
Early Seed Funding
in the Nordic Region
Nordic Crowdfunding Alliance – why?
Relative newness
and limited resources
of local Crowdfunding
platforms.
Governmental
priority of support
for entrepreneurial
development.
Rapid
international
growth and strong
global players
www.nordic-crowdfunding.com
Academic
curiosity about
new phenomenon

17. The Nordic Crowdfunding Alliance is a partnership of key players in the
Nordic crowdfunding scene committed to: (1) developing an ever more
crowdfunding-friendly Nordic region, while (2) empowering and facilitating
entrepreneurial growth in the region.
• Established in March 2014 as a university-industry partnership.
• Made possible through the support of the Nordic Innovation High Growth
Entrepreneurship Program
• By 2017 the alliance aims to enter independence mode.
• The alliance is open and endorses a vision of a wider alliance in the near future.
Nordic Crowdfunding Alliance

18. * Spreading knowledge and understanding of
Crowdfunding, its benefits and challenges.
* Developing a thriving Nordic community of Crowdfunders
that can become one of the most vibrant in the world.
* Launch of an alliance website that will allow backers to
identify interesting projects across the Nordics.
* An option allowing campaigners to run and international
Nordic level campaigns.
* Knowledge sharing between platforms and the public via
research.
Nordic Crowdfunding Alliance – Current Activities
National
Events
Community
Development
Alliance
Website
Nordic
Campaigns
Knowledge
Sharing

19. The alliance members are jointly responsible for successfully helping
entrepreneurs, artists and social ventures raise EUR 9,6 million in period
between mid-2012 to Mid-2015.
• EUR 7 Million in equity-Crowdfunding of 40 projects (average EUR 175K).
• EUR 2,6 million in reward-Crowdfudning of 822 projects (average EUR 3,123).
Representing a thriving and growing Nordic Crowdfunding community:
- Over 30.000 community members across the Nordic countries.
Nordic Crowdfunding Alliance - Facts and Figures

20. Nordic Crowdfunding Alliance - Facts and Figures 2012-july 2015
Booomerang
(Denmark)
Bidra.no
(Norway)
Karolina
(Iceland)
Mesenaatti
(Finland)
Type Reward Reward+
Donation
Reward Reward
# Successful
campaigns
470 66 136 150
Success rate 35,1% 35,7% 77,4% 70,9%
Growth
Dec 14 to Jul 15
Total -37%
Successful – 55%
Total -131%
Successful – 83%
Total -43%
Successful – 43%
Total -103%
Successful – 108%
(* for period mid-2012 to mid-2015)
* 78% success in 2015.
Invesdor
(Finland)
Equity +
Lending
40
41,7%*
Total -23%
Successful – 54%
Total = growth in total number of campaigns in first half of 2015.
Successful = growth in number of successful campaigns in first half of 2015.

21. Record Breaking Camapaigns (2012- july 2015)
Booomerang
(Denmark)
Bidra.no
(Norway)
Invesdor
(Finland)
Karolina
(Iceland)
Mesenaatti
(Finland)
Copenhagen
Boulders
(sport center)
EUR 42.430
(DKK 314,000)
Car for sick
child
(social cause)
EUR 15,245
(NOK 134,153)
Cityvarasto
(storage
facilities firm)
EUR 1.037.385
Stundin
(newspaper)
EUR 45,520
NEW RUN –
Pekka Hyysalo
(film)
EUR 31,746

22. Reward-based Crowdfunding in Iceland 2013-July 2015
0
50
100
150
200
250
300
350
2013 2014 2015 (jan-aug)
114
245
308
148
189
41
Karolina
Global
EUR(inthousands)
(Indiegogo and Kickstarter)

23. Marketshare
(inmonetaryvalue)
(Indiegogo and Kickstarter)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 (jan-aug)
44%
56%
88%
56%
44%
12%
Global
Karolina
Reward-based Crowdfunding in Iceland 2013-July 2015

24. MailPile raised close to EUR 121K for developing their
Open Source Free web-mail client.
Haafell Goat Farm raised close to EUR 91K for saving the
unique Iceland Goat from extinction.
Árstíðir raised close to EUR 50K for producing a music
album.
Stundin raised close to EUR 45K for launching ‘new’
newspaper.
Sirkus Íslands raised close to EUR 42K for purchase of
new circus tent.
Best 5 Icelandic Campaigns
(Sources: Indiegogo, Karolina, Kickstarter)

25. Main campaign success factors
Networking
• Dedication and persistence in social media interactions.
• Active networking throughout campaign process.
• Capitalize on existing fan and follower base.
1
Based on the experience from thousands of campaigns on the alliance’s
platforms, we have summarized critical success factors:
Attractive
Presentation
• Attractive, good and clear project description.
• Use of images and videos.
• Highlighting unique aspects of concept.
2
Good
Preparation
• Good business and marketing plans.
• Reasonable valuations and target/goal sums.
• Communication on multiple media platforms.
3

26. Reasons for refusing campaigns
Purpose
• Moral, Ethical and social aspects.
• Unbacked claims of dubious nature.
1
• Up to 55% of proposed reward-based campaigns, and up to 80% of
equity-based campaigns are refused publication.
Goals
• Unrealistic targets and goal sums.
• Excessive valuations of own project.
2
Project
• Unorganized and non-responsive project owners.
• Insufficient planning and information about project.
3

27. Some interesting facts and figures
• According to an interview with Indiegogo founder in 2011 (HuffingtonPost 2011):
- Campaigns with video receive 122% more funding than campaigns with only text.
- Campaigns involving teams raise 70% more than those with just one person involved.
• Spelling errors in crowdfunding campaign texts decrease the chance of
success by 13% (StartupInnovation.org).
• Once crossing the 30% milestone, statistics suggest that crowdfunders have
nearly a 90% rate of success (Crowdclan 2013).
• On Kickstarter, about two-thirds of women-led projects reach their funding
goals, which is compared with a little less than one-third of male-tech ventures.
The research showed that women are 13% more than likely to meet their goals
on the crowdfunding giant (Crowdfundinsider 2014).

28. Code of Ethics
to providing information in good time to crowdfunders or potential
corwdfunders with regard to platform services and all costs and
related charges.
1
• We the members of the Nordic Crowdfunding Alliance commit :
2
3
to a due diligence and authentication process when approving
projects and individuals prior to campaign publication, in
accordance with each platforms guidelines.
to publish campaigns in accordance with nationals laws, and those
that are not against or hurting human rights of third parties
(individuals or groups).

29. Code of Ethics (continued)
to use best filtering practices for avoiding publication of campaigns
including false, inaccurate and misleading information.
4
5
6
to accept campaigns where campaign owners are actively engaged
and fully committed to campaign completion.
to best security practices in IT systems and data protection.

30. 1. Rise of equity-crowdfunding.
2. Rise of niche platforms.
3. Regulatory amendments and adaptations across countries, to
better fit a Crowdfunding reality.
4. Increased focus on educating stakeholders in the market about the
prospects and practice of Crowdfunding.
5. Increasing competition and consolidation across platforms.
6. Increasing professionalism of campaign management following
stronger competition among campaign owners for the Crowd’s
attention and support.
Trends and Future perspectives

31. The Danish government owned fund Markedsmodningsfonden
made public, that it will match fund DK crowdfunding projects.
Projects have to be pre-accepted by the fund, and the match
funding can go as high as DKK 1.461.000.
Finnish equity-Crowdfunding platform Invesdor chosen as a 2014
Red Herring Top 100 European Startups.
- Surpassing EUR 4 million in funds raised via equity-crowdfunding for
entrepreneurs in March 2015.
Finnish equity-Crowdfunding platform Invesdor first in Europe to
receive MiFID license covering all 31 EEA countries.
GOOD NEWS

32. Thank you for the attention…
Dr. Rotem Shneor
Centre for Entrepreneurship - School of Business and Law,
University of Agder, Norway
E-mail: rotem.shneor@uia.no
Nordic Crowdfunding Alliance
www.nordic-crowdfunding.com