Crowdfunding as an Alternative Source of Financing (Revizor)

Summary

• Crowdfunding provides external, non-bank financing to entrepreneurs and small enterprises by pooling small contributions from a large number of investors via online platforms.p.2
• In the Netherlands, as much as 89% of crowdfunding activity takes the form of lending-based loans.p.4
• Approximately 90% of all startups fail, reflecting the high risk involved in early-stage investments.p.5
• The total number of global crowdfunding platforms surpassed 1,250 in 2018.p.7
• The global crowdfunding market reached USD 20.34 billion.p.7
• In 2024, North America led the global crowdfunding market with a 31% market share.p.8
• In 2017, approximately $700,000 was invested through crowdfunding in Serbia.p.8

Key insights

1. Crowdfunding emerged as a key alternative financing model for young ventures following the restricted bank lending during the 2008 Global Financial Crisis.p.3
2. Lending-based crowdfunding represents 60% of total global crowdfunding revenues.p.8
3. Information asymmetry remains a major obstacle for early-stage startup funding because external backers lack historical financial statements.p.5
4. Platform administrators perform vital screening functions by selectively listing projects with higher chances of success to protect investors.p.6
5. Regulation (EU) 2020/1503 harmonizes rules for European crowdfunding service providers to reduce transaction costs and foster cross-border funding.p.8
6. The Asia-Pacific region is currently the fastest-growing market for crowdfunding globally.p.8