DOCSLIB.ORG

Mind the Gap

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text

Load more

Norwegian School of Economics Bergen, Spring 2017 Mind the Gap Is there an equity gap in Norway, and can equity crowdfunding close it? Haakon Møyner Lund Supervisor: Bram Timmermans Master Thesis in Strategy NORWEGIAN SCHOOL OF ECONOMICS This thesis was written as a part of the Master of Science in Economics and Business Administration at NHH. Please note that neither the institution nor the examiners are responsible − through the approval of this thesis − for the theories and methods used, or results and conclusions drawn in this work. 2 Abstract When an entrepreneur starts a new company, accessing funding is essential. However, funding is not always easily accessible due to the lack of internally generated profits, operating history and collateral that could have been used to lower the risk for potential lenders or investors. Companies that introduce new technologies or business models with a large potential for growth will in many cases have larger problems accessing financial capital due to both a larger need for capital, but also a higher risk of failure. These companies are also especially important to for the society because they represent a small minority of fast-growth companies that generates a significant proportion of new jobs and economic growth in the economy. International researchers have identified so-called equity gaps in the financing of this category of fast-growing ventures. This paper explores the phenomenon of equity gaps in existing academic literature and examines whether such gaps exists in the Norwegian market for risk capital. The thesis also evaluates equity crowdfunding’s ability to close such gaps. A qualitative design using semi-structured interviews with leading risk capital investors as well as secondary sources were used to answer the research questions set forward. This approach was chosen due to the explorative nature of the paper and the lack of quantitative data. Overall, the interviews seem to point to the existence of an equity gap in Norway, but not investors all did not agree. The investors did also not agree on the size of the gap measured in the size of the investment. In addition, there were disagreements among the investors on equity crowdfunding’s ability to close the equity gap. The data collected from equity crowdfunding platforms did as well show that equity crowdfunding currently does not serve the investment sizes that the majority of investors identified as the equity gap. This paper concluded that there is an equity gap in Norway, but at the current stage equity crowdfunding is not a suitable solution to close or reduce the gap. This thesis contributes to the limited research on equity gap in Norway, as well as use a novel approach to evaluate equity crowdfunding’s ability to close the gap. The research in this thesis can be of interest to market participants, including entrepreneurs, investors and the government, to better understand why young companies fail to attract funding. 3 Preface This study has been conducted as a concluding part of an M.Sc. in Economics and Business Administration at Norwegian School of Economics in Bergen. The thesis consists of 30 credits and is written within the master profile of Strategy and Management. The process of trying to answer whether there is an equity gap in Norway, and if equity crowdfunding can close it has been a six-month long roller-coaster ride with ups and downs, causing both excitement and frustration. In other words, I could not have asked for a better way to end my time here at NHH. I would like to thank my supervisor Bram Timmermans who contributed with very useful input and feedback along the way. In addition, I want to thank the investors that contributed with their time and knowledge in this study. Not one single investor declined to be interviewed, leaving me with the impression that this is an industry with people that sincerely want to share their knowledge to help create tomorrow’s great companies. A big thank you also goes to family and friends who have contributed constructive discussions, feedback and proofreading of the assignment. Bergen, June 16th, 2017 Haakon Møyner Lund 4 Table of contents ABSTRACT........................................................................................................................................... 2 PREFACE ............................................................................................................................................. 3 TABLE OF CONTENTS ..................................................................................................................... 4 1. INTRODUCTION ...................................................................................................................... 6 2. RESEARCH QUESTIONS ...................................................................................................... 10 3. METHODOLOGY ................................................................................................................... 12 3.1 RESEARCH DESIGN ................................................................................................................. 12 3.2 CONDUCTING THE INTERVIEWS .............................................................................................. 16 3.3 THEMATIC ANALYSIS ............................................................................................................. 17 3.4 SECONDARY DATA ................................................................................................................. 18 3.5 LITERATURE REVIEW ............................................................................................................. 18 3.6 RELIABILITY AND VALIDITY ................................................................................................... 20 3.7 ETHICAL CHALLENGES ........................................................................................................... 22 3.8 STRUCTURE OF THE THESIS .................................................................................................... 23 4. WHAT IS AN EQUITY GAP? ................................................................................................ 24 4.1 INTRODUCTION ...................................................................................................................... 24 4.2 LITERATURE REVIEW ............................................................................................................. 25 4.3 ANALYSIS .............................................................................................................................. 28 4.4 CONCLUSION .......................................................................................................................... 30 5. IS THERE AN EQUITY GAP IN NORWAY AND WHAT IS ITS SIZE AND LOCATION? 33 5.1 INTRODUCTION ...................................................................................................................... 33 5.2 LITERATURE REVIEW ............................................................................................................. 33 5.3 PHASES OF DEVELOPMENT: .................................................................................................... 39 5.4 ANALYSIS .............................................................................................................................. 41 5 5.5 CONCLUSION .......................................................................................................................... 44 6. WHY COULD THERE BE AN EQUITY GAP IN NORWAY? .......................................... 46 6.1 INTRODUCTION ...................................................................................................................... 46 6.2 LITERATURE REVIEW AND THEORETICAL BACKGROUND ........................................................ 46 6.3 ANALYSIS .............................................................................................................................. 52 6.4 CONCLUSION .......................................................................................................................... 56 7. HOW CAN EQUITY CROWDFUNDING AFFECT THE EQUITY GAP? ...................... 59 7.1 INTRODUCTION ...................................................................................................................... 59 7.2 THE CROWDFUNDING CONCEPT .............................................................................................. 60 7.3 CROWDFUNDING IN NORWAY ................................................................................................ 61 7.4 LITERATURE REVIEW ............................................................................................................. 62 7.5 ANALYSIS .............................................................................................................................. 67 7.6 CONCLUSION .......................................................................................................................... 71 8. CONCLUSION ......................................................................................................................... 73 9. BIBLIOGRAPHY .................................................................................................................... 75 9.1 LIST OF FIGURES ..................................................................................................................... 80 10. APPENDIXES .........................................................................................................................
Recommended publications
  • Crowdfunding in Asia

    Crowdfunding in Asia

    Crowdfunding in Asia May 2018 Introducing the first free directory of crowdfunding platforms across Asia. The data is based on the AlliedCrowds Capital Finder, a database of over 7,000 alternative finance capital providers across emerging markets. Our data has been used by organizations like FSD Asia, UNDP, World Green Economy Organization, GIZ, World Bank, and others in order to provide unique, actionable insights into the world of emerging market alternative finance. This is the latest of our regular reports on alternative finance in emerging markets; you can find all previous reports here. Crowdfunding rose in prominence in the post-financial crisis years (starting in 2012), and for good reason: a global credit crunch limited the amount of funding available to entrepreneurs and small businesses. Since then, crowdfunding has grown rapidly around the world. Crowdfunding is especially consequential in countries where SMEs find it difficult to raise capital to start or grow their businesses. This is the case in many Asian countries; according to the SME Finance Forum, there is a $2.3 trillion MSME credit gap in East Asia and the Pacific. Crowdfunding can help to fill this gap by offering individuals and small businesses an alternative source of capital. This can come in the form of donation-based as well as lending-based (peer-to-peer or peer-to-business) crowdfunding. In order to help entrepreneurs and small business owners to find the crowdfunding platform that’s right for them, we are releasing the first publicly available list of all crowdfunding platforms across Asia. The report is split into two key sections: the first one is an overview of crowdfunding platforms, and how active they are across the largest markets on the continent.
  • I Investigations Into the Structure of Crowdfunding Research

    I Investigations Into the Structure of Crowdfunding Research

    Investigations into the Structure of Crowdfunding Research and the Role of the Content and Linguistic Cues in Risk Disclosure in Crowdfunding Campaigns A thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy Ahmad Ridhuwan Abdullah Master of Science in Finance (Northern University of Malaysia) Bachelor of Business Administration in Finance (MARA University of Technology) School of Economics Finance and Marketing College of Business RMIT University March 2019 i DECLARATION I certify that except where due acknowledgement has been made, the work is that of the author alone; the work has not been submitted previously, in whole or in part, to qualify for any other academic award; the content of the thesis is the result of work which has been carried out since the official commencement date of the approved research program; any editorial work, paid or unpaid, carried out by a third party is acknowledged; and, ethics procedures and guidelines have been followed. Ahmad Ridhuwan Abdullah 25 March 2019 ii ACKNOWLEDGEMENTS First and foremost, I would like to thank my supervisors, Professor Jason Potts, Dr Nthati Rametse, and Dr Joanne Laban for their wisdom and constructive supervision, consistent encouragement, and intellectual commitment in guiding me since the first day of my study and upon finishing writing this thesis. Special thanks to Professor Jason Potts who is kind- hearted enough to allow me to develop my own academic interests. I must thank my family members, especially my wife Siti Salwani Abdullah and my daughter Dhia Alia for their support and encouragement throughout my study. They went through hard times throughout the research process and I am grateful for their patience and understanding.
  • Crowd Involvement in CHEST: Insights and Recommendations for Crowdsourcing in Innovative Funding Schemes and Successful Crowdfunding of Digital Social Innovations

    Crowd Involvement in CHEST: Insights and Recommendations for Crowdsourcing in Innovative Funding Schemes and Successful Crowdfunding of Digital Social Innovations

    Crowd involvement in CHEST: Insights and recommendations for crowdsourcing in innovative funding schemes and successful crowdfunding of Digital Social Innovations 1 Table of Content 1 Introduction ..................................................................................................................................... 3 2 Crowdsourcing Digital Social Innovation in CHEST .......................................................................... 4 2.1 CHEST open call design and results ......................................................................................... 4 2.2 Community engagement supporting idea generation ............................................................ 6 2.3 CHEST CrowdMonitor: Crowd evaluation of beneficiaries ..................................................... 9 3 Crowdfunding ................................................................................................................................ 10 3.1 Types of crowdfunding .......................................................................................................... 10 3.2 Overview of crowdfunding market and platforms ................................................................ 12 3.3 Factors of success .................................................................................................................. 15 3.4 Guidelines for planning and implementing a successful crowdfunding campaign for DSI ... 15 3.4.1 Step 1: Decide if crowdfunding is appropriate for your project ..................................
  • Crowdfunding Schemes in Europe

    Crowdfunding Schemes in Europe

    Crowdfunding Schemes in Europe by David Röthler and Karsten Wenzlaff EENC Report, September 2011 Crowdfunding Schemes in Europe by David Röthler and Karsten Wenzlaff EENC Report, September 2011 This document has been prepared by David Röthler and Karsten Wenzlaff on behalf of the European Expert Network on Culture (EENC). A draft was peer-reviewed by EENC member Aleksandra Uzelac. This paper reflects the views only of the EENC authors and the European Commission cannot be held responsible for any use which may be made of the information contained therein. The EENC was set up in 2010 at the initiative of Directorate-General for Education and Culture of the European Commission (DG EAC), with the aim of contributing to the improvement of policy development in Europe. It provides advice and support to DG EAC in the analysis of cultural policies and their implications at national, regional and European levels. The EENC involves 17 independent experts and is coordinated by Interarts and Culture Action Europe. About the authors David Röthler, Master´s degree in Law, trainer, consultant and journalist in the fields of political communication, media and European funding. He teaches at journalism schools in Austria and Germany. His focus is on participatory journalism, social media and new funding schemes e.g. crowdfunding and social payment. Furthermore he has extensive experience with the management of international projects. He is founder of the consultancy PROJEKTkompetenz.eu GmbH. Personal Weblog: politik.netzkompetenz.at Karsten Wenzlaff is the founder of the Institute of Communications for Social Communication (ikosom), a Berlin-based research facility for new forms of electronic technology.
  • Current State of Crowdfunding in Europe

    Current State of Crowdfunding in Europe

    Current State of Crowdfunding in Europe An Overview of the Crowdfunding Industry in more than 25 Countries: Trends, Volumes & Regulations 2016 Current State of Crowdfunding in Europe 2016 CrowdfundingHub is the European Expertise Centre for Alternative and Community Finance [email protected] www.crowdfundinghub.eu @CrowdfundingHub.eu Keizersgracht 264 1016 EV Amsterdam The Netherlands This report is made possible by the contribution of: Current State of Crowdfunding in Europe is a report based on research conducted by CrowdfundingHub in close cooperation with professionals from all over Europe. Revised versions of this report and updates of individual countries can be found at www.crowdfundingineurope.eu. Current State of Crowdfunding in Europe 2016 Foreword We started this research to get a structured view on the state of crowdfunding in Europe. With the support of more than 30 experts in Europe we collected information about the industry in 27 countries. One of the conclusions is that there is a wide variety of alternative finance instruments that is being offered through online platforms and also that the maturity of the alternative finance industry in a country can not just be measured by the volume of transactions on these platforms. During the process of the research therefore, the idea took root to develop an Alternative Finance Maturity Index. The index takes into account the volumes in the industry, the access to relevant and reliable data, the degree of organization of the industry, the presence and use of all the different forms of alternative finance and also the way governments are regulating the industry with rules that on one hand foster alternative finance but on the other hand also protect consumers and prevent excesses.
  • Crowd Power – Success & Failure, the Key to a Winning Campaign

    Crowd Power – Success & Failure, the Key to a Winning Campaign

    CROWD POWER Success & Failure: The Key to a Winning Campaign Davinia Cogan and Simon Collings 1 CONTENTS 1.0 Executive Summary ...................................................................................................................................3 2.0 Introduction ....................................................................................................................................................5 3.0 The Layers of Success ..............................................................................................................................7 3.1 Donation .........................................................................................................................................................11 3.1.1 Choosing the Right Platform....................................................................................................................................................................11 3.1.2 The Campaign Period ..................................................................................................................................................................................13 3.1.3 Implementing Campaign Goals & Success into the Future .......................................................................................16 3.1.4 Q&A – Kenya Green Supply ..............................................................................................................................................18 3.2 Reward ..........................................................................................................................................................
  • What to Consider Before Contacting a Venture Capital Investor

    What to Consider Before Contacting a Venture Capital Investor

    Deliverable 6: Network of private investors Background material for AAL project participants March 2014 (updated NHG 15.1.2016) Copyright statement AAL2Business - Report titled “Network of private investors - Background material for AAL project participants“ Report for Ambient Assisted Living Association, Brussels Date April 2014 Author(s) Nordic Healthcare Group Responsible Administrator: AAL Association Brussels Project name: AAL2Business Publisher: Ambient Assisted Living Association Rue de Luxembourg, 3, 2nd floor B-1000 Brussels, Belgium Phone +32 (0)2 219 92 25 email: [email protected] About Ambient Assisted Living Association: The Ambient Assisted Living Association (AALA) is organizing the Ambient Assisted Living Joint Programme (AAL JP). The AAL JP aims at enhancing the quality of life of older people and strengthening the industrial base in Europe through the use of Information and Communication Technologies (ICT). Therefore, the AAL JP is an activity that operates in the field of services and actions to enable the active ageing among the population. The programme is financed by the European Commission and the 22 countries that constitute the Partner States of this Joint Programme. See more at: http://www.aal-europe.eu/ The information and views set out in this report are those of the author(s) and do not necessarily reflect the official opinion of the AALA. The AALA does not guarantee the accuracy of the data included in this study. Neither the AALA nor any person acting on the AALA’s behalf may beheld responsible for the use which may be made of the information contained therein. All rights reserved by AALA. © 2014 Ambient Assisted Living Association, Brussels 2 Contents 1 Introduction and content overview 2 Funding opportunities and availability in Europe 3 Considerations before seeking funding 4 Choosing the right type of funding 5 Investor contacts and event listings • Accelerator Programs & Business angels • Venture capital • Events • Other useful sources 3 Introduction to material .
  • Crowdfunding As a Source for Social Enterprise

    Crowdfunding As a Source for Social Enterprise

    CROWDFUNDING AS A SOURCE FOR SOCIAL ENTERPRISE FINANCING Advantages and Disadvantages Experienced by Social Entrepreneurs Authors: Diana Hazam Dijana Karimova Magnus Gabriel Olsson [email protected] [email protected] [email protected] Bachelor Thesis within: Business Administration Tutor: Number of credits: 15 ECTS Mark Edwards, Associate Professor Programme of study: International Management [email protected] Jönköping, May 2017. Acknowledgements During the past four months, a significant share of our time has been spent on researching and writing our thesis. We have had the privilege to immerse ourselves into two very exciting and emerging topics, crowdfunding and social enterprising. We are now happy to finally deliver our finished work. Specifically, we would like to express our gratitude towards our tutor, Mark Edwards. His support during this journey has been of decisive importance, and we are very thankful for his effort and guidance. We would also like to thank the participating companies who, despite hectic time schedules, were able to give us interviews. The insights obtained from the interviews are very highly valued. Finally, we thank our seminar opponents Josefin Davidsson and Hanna Jonsson for giving us insightful comments. Thank you, Mark Edwards, Josefin Davidsson, Hanna Jonsson, Abundance Investment, Ari.Farm, Big Heart Sweden, Röstånga Utvecklings AB, TRINE and Uniti Sweden! Diana Hazam Dijana Karimova Magnus Gabriel Olsson i Abstract Social Enterprises face funding challenges. As investors focus too narrowly on risk and return, social enterprises may struggle to compete with commercial enterprises for investment capital. In this context, lending and equity crowdfunding have not been sufficiently examined, and its growing importance for business financing makes it valuable to understand its implications for social enterprises.
  • (Microsoft Powerpoint

    (Microsoft Powerpoint

    Crowdfunding and Crowdinvesting Karsten Wenzlaff Moscow, 24 th April 2012 Private Research Institute based in Berlin founded in 2011 12 scientists -Market Research -Trend Reporting on new digital economies -OpenScience-Institute Crowdsourcing is allocation of knowledge, skills and capital 1. 2. 3. Donation-based crowdfunding Crowd-Investing Peer-to-peer Lending European Crowdfunding and Peer to Peer Lending Platforms UK - http://www.fundingcircle.com - http://www.innovatrs.com - http://www.crowdfunder.co.uk - https://www.buzzbnk.org - http://www.sponsume.com - http://wedidthis.org.uk - www.wefund.co.uk - http://bluedotworld.com/ - http://en.fansnextdoor.com/ - http://www.unbound.co.uk/ - Ireland - http://www.seedups.com - http://www.venturesocially.com - http://www.fundit.ie - Germany - http://couchtycoon.net/ - http://www.seedmatch.de - http://www.globumbus.com/ - http://www.cofundos.org - http://www.innovestment.de/ - https://www.sellaband.com/ - http://www.smava.de - http://www.startnext.de - and - www.startnext.at - http://www.mysherpas.com - http://www.visionbakery.com - http://www.inkubato.com - http://www.pling.de - http://www.friendfund.com - htpp://www.games-plant.com - http://www.betterplace.org - http://www.einfachgeben.org/ - Austria - http://www.respekt.net - http://www.querk.net - Switzerland - http://www.c-crowd.com - http://www.cofundit.com - http://www.investiere.ch - France: - http://www.wiseed.fr - http://www.financeutile.com/ - http://www.friendsclear.com/ - http://www.babyloan.org - http://www.ulule.com - http://www.kisskissbankbank.com
  • Study to Monitor the Economic Development of the Collaborative Economy at Sector Level in the 28 EU Member States

    Study to Monitor the Economic Development of the Collaborative Economy at Sector Level in the 28 EU Member States

    Study to Monitor the Economic Development of the Collaborative Economy at sector level in the 28 EU Member States Final Report 23 February 2018 [Written by] [February – 2018] EUROPEAN COMMISSION Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs Directorate E — Modernisation of the Single Market Directorate E.3 Digitalisation of the Single Market E-mail: [email protected] European Commission B-1049 Brussels Study to Monitor the Economic Development of the Collaborative Economy at sector level in the 28 EU Member States Final Report The information and views set out in this study are those of the author(s) and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use which may be made of the information contained therein. Directorate-General for Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs 2018 EN Europe Direct is a service to help you find answers to your questions about the European Union. Freephone number (*): 00 800 6 7 8 9 10 11 (*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you). LEGAL NOTICE This document has been prepared for the European Commission; however, it reflects the views only of the authors, and the Commission cannot be held responsible for any use, which may be made of the information contained therein. More information on the European Union is available on the Internet (http://www.europa.eu).
  • Download (2MB)

    Download (2MB)

    Dipartimento di Impresa e Management Cattedra di Management of Innovation “Crowdfunding in Real Estate: do Real Estate Crowdfunding Platforms really know what moves the crowd?” RELATORE Prof.ssa Leone Maria Isabella CANDIDATO Mucedola Matteo Pio MATRICOLA 709551 CORRELATORE Prof. Peruffo Enzo ANNO ACCADEMICO 2019/2020 TABLE OF CONTENTS INTRODUCTION 1 1) OPEN INNOVATION 4 1.1) WHAT IS OPEN INNOVATION 4 1.1.1) From “Innovation” to “Open Innovation” 4 1.1.2) Open Innovation: characteristics, drawbacks and benefits 5 1.1.3) From “Search” to “Broadcast Search”: applicative models 8 1.2) CROWDFUNDING: CHARACTERISTICS 10 1.2.1) Definition 10 1.2.2) A journey on the crowdfunding history: from offline to online 12 1.2.3) Crowdfunding models: classification 14 1.2.4) A crowd analysis: motivation for participation 17 1.3) ADVANTAGES AND DISADVANTAGES OF CROWDFUNDING 20 1.4) CROWDFUNDING APPLICATIONS: EVIDENCE FROM THE MARKET 24 1.4.1) Crowdfunding market analysis 24 1.4.2) Main players 27 2) CROWDFUNDING IN THE REAL ESTATE MARKET 28 2.1) WHAT IS THE REAL ESTATE MARKET? 28 2.1.1) Definition and main classification 28 2.1.2) Real Estate Cash Flows and Relevant Factors 29 2.2) NEW TECHHNOLOGIES IMPLEMENTATION IN REAL ESTATE 32 2.2.1) From “Innovation Identification” to “Innovation Implementation” 32 2.2.2) Digitization 33 2.2.3) Data Management 34 2.2.4) Artificial Intelligence 35 2.2.5) Digital Reality 36 2.2.6) Cybersecurity and Privacy 37 2.3) CROWDFUNDING IN REAL ESTATE MARKET 38 2.3.1) From “Real Estate” to “Real Estate Crowdfunding”: Historical Steps 38 2.3.2) Real Estate Crowdfunding Classification 40 2.3.3) Crowdfunding Real Estate Platforms Common Elements 42 2.4) RESEARCH QUESTIONS 44 3) REAL ESTATE INDUSTRY OVERVIEW 46 3.1) HISTORY OF THE REAL ESTATE INDUSTRY 46 3.1.1) History of the U.S.
  • Perceptions of Swedish Fund Managers of Equity Crowdfunding

    Perceptions of Swedish Fund Managers of Equity Crowdfunding

    Perceptions of Swedish Fund Managers of Equity Crowdfunding Axel Andersson*, Latif Andersson** & Mikael Uusivuori*** Acknowledgements Foremost, we would like to express our gratitude to our tutor Adele Berndt for her continuous encouragement and support of writing this thesis. Her guidance and extensive knowledge of the area of study helped us in fulfilling the purpose of our research. In addition, we would like to thank all of the fund managers for participating in this study by devoting their time to providing us with their insightful perceptions and sharing their experiences with us. Without the participants we would not have been able to arrive at the outcome that we so proudly have accomplished. Axel Andersson, Latif Andersson & Mikael Uusivuori Axel Andersson Mikael Uusivuori Latif Andersson Bachelor Thesis in Business Administration Title: Perceptions of Swedish Fund Managers of ECF Author: Axel Andersson, Latif Andersson and Mikael Uusivuori Tutor: Adele Berndt Date: 2015-05-11 Abstract Equity crowdfunding (ECF) is the smallest of four main types of crowdfunding (CF) and has emerged as a new form of investment, where investors receive equity of a company in return for capital. Over the past years, the development of CF has given entrepreneurs the option to seek funding from a new source, instead of relying solely on venture capital (VC) and other sources of funding (Mollick, 2013). However, the implementation of regulations for ECF has not yet developed enough to make such investing equally consistent for everyone. Equity crowdfunded ventures can potentially attract a large number of investors that can possibly create corporate governance issues between the entrepreneur and investors.