How a Crowdfunding Platform Became The Funding Network
All over the world people are becoming better connected, creating cheaper, faster and easier access to products and services. Entire industries are being concentrated into single online destinations – termed ‘go-to’ platforms – disrupting and simplifying the way we live our lives. When Spotify launched, in October 2008 in Sweden, founder and CEO Daniel Ek’s dream of “frictionless” access to music seemed like the longest of long shots. His “music-is-free” mentality was ridiculed by the established record companies. Now Spotify is the Netflix of music sites. Mark Zuckerberg says, “Daniel just saw the opportunities of streaming music before anyone else.” What Spotify is to the music industry, Uber is to personal transportation, and Airbnb or Booking.com are to hospitality. But one industry in particular has remained resistant to the democratizing impact of the digital age, and that’s finance. Entrepreneurs and investors in the SME backbone of our economies experience obstacles and barriers when seeking to connect, fund and grow. Recent financial crises and stricter banking regulations means there’s a vacuum in the life cycle of SME financing.
Rethinking access to capital
This ‘equity gap’ is waiting to be filled by a centralized platform for alternative finance with standardized data protocols. That’s where The Funding Network™ by Symbid comes in. If rejected for a bank loan, as 30% of young SMEs were in the EU in 2014, entrepreneurs can struggle to navigate the emerging alternative finance market. With each platform focusing on just one type of finance, for example peer-to-peer lending or equity crowdfunding, a capital search can be a costly and time-consuming process for a busy entrepreneur. The lack of standardized SME financial data, plus the limited financial skills of entrepreneurs, creates a mismatch between small business and investors. We must rethink our online access to capital. Founded in the Netherlands in 2011 as one of the world’s first investment crowdfunding platforms, Symbid was early in identifying the need for data-driven SME finance and invested in developing advanced investing, monitoring and data tools. The so-called disruptive, horizontal, peer-to-peer models of Spotify, Uber and Airbnb are the next logical step for a financial industry grounded in a traditional, vertical, offline way of operating. Symbid used its early mover advantage in crowdfunding to push ahead with paradigm-shifting technologies that connect alternative and traditional finance.
Enabling the flow of funding
The Symbid solution is clear: a fully-integrated, data-driven and user-friendly distribution network for SME finance set to become the go-to platform for private enterprises and financiers. Built around our cutting-edge investing and monitoring technology, The Funding Network™ gives entrepreneurs direct access to all forms of finance, while offering (both private and institutional) investors full transparency on the potential risks and returns of their portfolio. Every entrepreneur connecting to The Funding Network™ is guided towards the right type of funding with professional financial advice. Meanwhile, investors can personalize their deal flow according to key business criteria, pinpointing the investment opportunities that matter to them. This produces the most efficient and effective capital allocation service possible, all underpinned by standardized XBRL data streamed from the accountant’s reporting system. This is how Symbid is becoming The Funding Network™, the go-to platform connecting entrepreneurs, start-ups and small businesses to all types of funding.
Delivering on potential
The launch of The Funding Network™ on March 4 is only the beginning. With over 40 funding partners already connected including banks, venture capital, angel investors, over 29.000 private (crowdfunding) investors and affiliated platforms, Symbid is set to become the go-to platform for SMEs in search of finance. A recently signed partnership with financial advisory firm Credion means the expected total transaction volume of The Funding Network™ in 2015 is worth €700 million. Our vision of simplifying the way small businesses are funded through efficient and transparent technology is now underway. Join us as we grow from one of the first investment crowdfunding platforms worldwide into The Funding Network™, the fastest and most efficient capital market for SME financing.
Intrigued by our vision? Get in touch with us on social media, or visit our website to see how The Funding Network™ is taking shape.