What is the future of crowdfunding agencies
10 years of crowd: Startnext, the future belongs to the brave
Crowdfunding came to Germany 10 years ago. Reason to take a closer look at this type of fundraising. This time our bank mirror editor-in-chief Falk Zientz speaks with Tino Kreßner, co-founder of Startnext Crowdfunding GmbH.
Startnext is the largest platform in Germany for classic crowdfunding. The supporters receive no monetary value for their donation. With 77 million euros, 8,000 projects from a wide variety of areas have now been successfully financed through Startnext. The volume of the projects financed ranges from € 500 to € 2 million.
When did you first see the potential of crowdfunding?
In 2007 I wrote my bachelor thesis on the potential of crowdsourcing in marketing and discovered the Dutch music crowd platform SellaBand. Back then I was working as a film producer and asked myself the question: Why not create such a platform for films too? Or why not for the entire creative industry at all? We started working on it in August 2009 and activated the platform in October 2010 for financing the first projects.
What did you invest in yourself for the first time?
That was in 2011 via seedmatch for the smarchive project, a digital document management system that is still very active on the market today under the name Gini.
How did you convince other people to set up a crowd offer at the beginning?
As a film producer, I was able to tell very authentically from my own experience what problems the funding landscape brings with it and what potential can be raised through the new financing option crowdfunding. For example, crowdfunding functions as a market test, because the idea is presented to potential customers in advance. In addition, crowdfunding can enable follow-up financing if investors and other financiers see the positive feedback from the market. We built Startnext out of our own resources, primarily through our work at our software and social media agency
What was your greatest hope?
Part of our founding vision were artist shares, analogous to SellaBand. So the idea that individual people can invest in art and creativity and then participate in economic success. However, this model has not yet been successfully established on any platform. On the one hand, it is probably due to the fact that it is regulatory difficult to get involved in creative projects. On the other hand, many art and creative projects do not achieve economic success and the economic sense is too often questioned.
What was your biggest disappointment?
At the beginning we were non-profit for three years, but we gave it up again due to the bureaucratic complexity. We believed that by means of the non-profit status we could emphasize that we promote projects, reinvest our sales and not distribute any profits. Even today, Startnext sees itself as a social enterprise. We did not extend the non-profit status because we were very time-consuming in discussions with our tax advisor and the tax office in order to fit our model into this legal framework. Instead, today we have been certified as a so-called “Benefit Corporation” - an international certification for companies that measure their success not by profit, but by their social benefit.
What is currently the biggest challenge for crowdfunding?
The amounts that can be achieved through crowdfunding in Germany are still too small for some projects. That is why we would like to link crowdfunding with other financing instruments, such as sponsoring or bank loans. However, bureaucratic processes often come up against the lean and innovative crowdfunding processes. At Startnext, we therefore often go the long way with our partners to simplify their processes for so long that the user gets an experience that is as integrated as possible.
What are you planning for 2020?
We would like to start establishing long-term funding pools for all 24 categories on Startnext, as we are already doing in the area of nature and the environment together with the Krombacher company. Here, over a year, € 500,000 is automatically distributed to projects via the supporters. Krombacher, for example, adds 25 percent to every financial support from the crowd.
What is the social relevance of crowdfunding in 2030?
Crowdfunding will serve as a tool to validate real needs. The project initiator knows even before he starts his investment whether there are enough people willing to pay money for his product or service. At the same time, capital investors, financial institutions or development companies see this feedback and can then make better financing decisions themselves. This makes the promotion of offers aimed at end customers more democratic and transparent. Often the crowd can assess market opportunities better than experts. That is why crowdfunding will be an integral part of the funding landscape.
Read more articles about the crowd
10 years of crowd - a balance sheet
Falk Zientz (54) is editor-in-chief of the GLS Bank customer magazine "Der Bankspiegel".
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