European Economy - Peoples Capitalism: Crowdfunding helps Europe’s businesses boom

Peoples Capitalism

Crowdfunding is no longer a niche, it’s booming in Europe. In this edition of Business Planet, from Finland, Serge Rombi finds out how platforms work and what makes a successful campaign.

“Global crowdfunding was more than 30 billion euros last year,” Lasse Makela, CEO of the Invesdor crowd-funding platform, told euronews’ Serge Rombi.

“It’s growing by more than 100 percent per year. And it’s going to be larger than venture capital financing this year.”

In the autonomous Aland islands in the Baltic Sea, a family-run SME produces 100 percent natural lemonade, using only local products.

In 2014, Tony Asumaa – founder of Amalias Limonadfabrik – realised that he needed to expand production and he immediately opted for crowdfunding.

“We chose crowdfunding because it was cheap, efficient, fast and, above all, non-bureaucratic – to get new capital into the company,” he said.

Through Lasse’s platform, Tony won more than 86-thousand euros in equity crowdfunding.
In other words, those who invested in his company are now shareholders.

“We have 163 new shareholders. As our ambassadors, they promote our products, they sell them. Some restaurant owners sell products throughout the country,” said Tony.

 Read more: Crowdfunding helps Europe’s businesses boom | euronews, business planet

EU-Digest

What Cities Really Need to Attract Entrepreneurs, According to Entrepreneurs - by Richard Florida

Creating high-growth, high-impact entrepreneurial enterprises has become a common goal of cities. Metros and states have cut taxes, implemented entrepreneur-friendly business policies, launched their own venture capital efforts, and underwritten incubators and accelerators—all in the hope of creating the next Apples, Facebooks, Googles, and Twitters.

But what really attracts innovative entrepreneurs who create these economy-boosting companies?
The answers: talented workers, and the quality of life that the educated and ambitious have come to expect—not the low-tax, favorable-regulation approach that many state and local governments tout.

These are the findings in a new report from Endeavor Insight, the research department of the nonprofit Endeavor, which focuses on fostering and mentoring "high-impact" entrepreneurs. Based on surveys and interviews with 150 founders of some of the country's fastest-growing companies, the report answers the basic question, "What do the best entrepreneurs want in a city?" It offers basic evidence that cities should focus on factors and conditions that attract the talented, educated workers who fast-growing entrepreneurial enterprises need.

 

Entrepreneurs look for talented workers and the amenities that these workers like.

Looking at this sample of America's most successful new businesses, Endeavor identified two fundamental patterns.

For one, size matters. These top business-creators gravitated towards cities with at least a million residents in the metro area. This size offered the scale and diverse array of offerings needed to attract talent.

A city also needs to appeal to the young and the restless. The entrepreneurs surveyed were a highly mobile bunch when they first started out. They moved often and easily in the early phases of their careers, following personal ties or lifestyle amenities while also seeking the right environment to launch their enterprises. But 80 percent of respondents had lived in their current city for at least two years before launching their companies, meaning that cities had to catch them early. And once they started their first company, these business leaders rarely moved. So attracting this mobile group at an early age is key.

The report then dug deeper into exactly what these entrepreneurs cited as the most important part of their location choices.

The top-rated factor by far was access to talent. Nearly a third of those surveyed mentioned it as a key factor in their decisions for where to live and work (many specifically prized access to technically trained workers). Entrepreneurs explained that they proactively sought out the places that educated and ambitious workers want to be.

EU-Digest

Europe's Hotbed of Entrepreneurship? France - by John Tozzi

You don’t need to be Gérard Depardieu to think that France’s high taxes and generous welfare state smother entrepreneurship. It’s surprising, then, that France gained more new businesses from 2007 to 2011 than the rest of the wealthy economies known as the Group of Seven (G-7), which include the U.S., Canada, the U.K., Germany, Italy, and Japan, combined.

That’s according to a new tally of government data by consulting firm RSM. France registered a net gain of 562,000 businesses in that period, compared with 95,000 in the U.S. and 75,000 in Germany, according to the report (pdf). (RSM used each country’s national statistics and acknowledged that direct comparisons are difficult because governments report the data differently.) What happened in France?

The jump can be traced to a change that then-President Nicolas Sarkozy’s government made in 2009 to simplify the rules and lower taxes for people forming very small businesses through a program called Auto Entrepreneur. (It has nothing to do with cars: “auto” refers to “self,” as in self-employed.)

The program proved so popular that the current Socialist government of François Hollande has proposed limiting who can take advantage of the favorable tax treatment. The Financial Times reported in June that the government was considering limiting how long businesses could qualify for the program and lowering the ceiling on revenue. The move sparked backlash online, with tens of thousands of French entrepreneurs defending the program.

Read more: Europe's Hotbed of Entrepreneurship? France - Businessweek