We finished a research work about opportunities and threats of crowdinvesting as a kind of corporate finance for enterprises. The research project started in 2011 and was finished in April 2014. We focussed our work on the crowdinvesting scene in Western Europe, especially in Germany. Because of our own experience in the field of corporate finance and by considering the insights from the previous economic and financial crises we watched the in 2011 in the USA upcoming Crowdfunding phenomenon, followed by the first steps of Crowdinvesting or crowdfinancing done by the online platform in the USA, named kickstarter.
Table of Contents
1. Introduction
2. Digital Economy – Internet Powers Economic Growth
3. Internet Releases Banks
4. Crowdinvesting State of the Art – Pros and Cons
5. Reference to research work in the field of Crowdinvesting
6. Alternatives of Crowdinvesting
7. Summary
Research Objectives and Core Themes
The research examines the opportunities and threats of crowdinvesting as a contemporary corporate finance instrument, specifically within the German landscape, while investigating its potential as a sustainable alternative to traditional bank lending in the era of the Digital Economy.
- The impact of regulatory frameworks like Basel III on SME financing.
- The role of crowdinvesting as a catalyst for bankless financing.
- Methodological insights from the development of a web-based crowdinvesting platform.
- Future projections for crowdinvesting in diverse sectors such as real estate, agriculture, and municipal funding.
- Challenges related to legal requirements and the necessity for professional standards in online financing.
Excerpt from the Book
3 Internet Releases Banks
In the case of Crowdinvesting, the Digital Economy has the potential to replace many parts of the banking sector. Ensuring the availability of capital and enabling its employment in order to stimulate growth within a national economy is the actual role of the banking system. Yet, the banking crash and the financial crisis clearly demonstrate that banks have failed in serving their goal. The Internet could take over this role bringing about an additional advantage: with these new digital structures called Crowdinvesting, the citizens’ money, which would be held by the banks only in mere moral trust, could be used to finance businesses and that at lower costs. The savers’ money would not go into terribly high salaries of bank managers or into banks’ real estate offices. This said, our research work has also tried to understand how Crowdinvesting can be used as a corporate financing tool.
Summary of Chapters
1. Introduction: Outlines the scope of the research, focusing on the relationship between internet technology, social media, and new forms of corporate finance in Germany.
2. Digital Economy – Internet Powers Economic Growth: Explores how the digital era and internet trends like Mobile and Big Data are forcing traditional sectors to adapt, creating a need for new capital provision methods.
3. Internet Releases Banks: Discusses the potential for crowdinvesting to circumvent failing traditional banking systems and offer lower-cost capital to businesses.
4. Crowdinvesting State of the Art – Pros and Cons: Analyzes the financing behavior of the German SME sector and the impact of Basel III regulations on future capital accessibility.
5. Reference to research work in the field of Crowdinvesting: Details the methodologies used, including a custom-built crowdinvesting platform and primary data collection through surveys.
6. Alternatives of Crowdinvesting: Examines new potential applications of online financing, including municipal projects, real estate, and renewable energy.
7. Summary: Recaps the research findings and reaffirms the potential for crowdinvesting to evolve into a sustainable financing tool if professional and legal standards are met.
Keywords
Crowdinvesting, Crowdfunding, Crowdfinancing, Digital Financing, Bankless Financing, Wisdom of the Crowd, Swarm-intelligence, SME Financing, Basel III, Corporate Finance, Internet Economy, Digital Economy, Financial Crisis, Online Platforms, Capital Markets.
Frequently Asked Questions
What is the primary focus of this research?
This research evaluates the opportunities and threats of crowdinvesting as a corporate finance tool, with a specific focus on the German market and the broader Digital Economy.
What core thematic fields does the work cover?
The work covers SME financing, the impact of the banking crisis, regulatory challenges like Basel III, and the emergence of new digital financing models.
What is the central research question?
The study seeks to determine whether crowdinvesting can serve as a sustainable, viable instrument for enterprise financing and how its risks can be mitigated while maximizing its opportunities.
Which scientific methods were employed?
The research used a multi-faceted approach, including literature analysis, the development and testing of a proprietary web-based crowdinvesting platform, and primary data collection via online questionnaires.
What topics are discussed in the main body?
The main body examines the growth of the Digital Economy, the shift away from traditional banks, the pros and cons of current crowdinvesting platforms, and potential future applications in various economic sectors.
Which keywords characterize this work?
Key terms include crowdinvesting, digital financing, bankless financing, collective intelligence, and SME capital accessibility.
How does the author view the role of Bergfürst AG?
The author highlights Bergfürst AG as a benchmark for professionalization in the German crowdinvesting landscape, particularly due to its unique integration into capital market laws and its focus on established companies.
What is the author's stance on the impact of Basel III?
The author argues that the Basel III framework will likely worsen the credit crunch for SMEs, thereby increasing the necessity for alternative, internet-based financing solutions.
What specific risk is associated with the 'foodiesqare' case?
The insolvency of 'foodiesqare' illustrates the risks for crowd investors, specifically the danger of total capital loss when companies fail to secure necessary follow-up financing.
- Quote paper
- Rainer Schenk (Author), 2014, Crowdinvesting made in Germany, Munich, GRIN Verlag, https://www.grin.com/document/272580
