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Innovative finance for sustainable initiatives by the crowd
Together with the first sustainable crowdfunding platform in the Netherlands, StartGreen generated EUR15 mln for sustainable initiatives. According to the current growth rate, the platform doubles its asset collections each year. This solution is part of a larger series that were published in 2016.
StartGreen Capital offers instruments for entrepreneurs with innovative and sustainable business or projects to take it to the next level of development. StartGreen managed four funds (two venture capital funds/ two regional development funds, with EUR 125 mln assets under management). In 2012 StartGreen Capital also launched the first sustainable crowdfunding platform in the Netherlands, called OnePlanetCrowd, with 25,000 international participants (the crowd) so far. In 2016 this crowdfunding platform generated EUR 15 mln (July 2016). With the current growth rate the platform doubles its asset collections each year. OnePlanetCrowd is also active in Germany, Belgium and Austria and will start activities in the UK in 2017. StartGreen aims to offer the sustainable entrepreneur or project developer a custom made finance solution, offer from their funds, by crowdfunding, or a combination of both. Coenraad represents the Netherlands as board member of the European Crowdfunding Network. He experienced in the Cop that their combination of market knowledge, network, coaching and innovative investment practice offers opportunities for natural capital as well.
We can be a hands-on partner for regular financial institutions and enhance their natural capital transition
Crowdfunding for transition
Coenraad de Vries: “The financial market is rapidly changing, the total available investment money is growing quickly. Despite of this, start-ups and sustainable projects can still hardly find ‘starting money’. Most of the governmental (and EU) policy is supporting regular financial institutions (banks, Private Equity, funds). These investors lack the expertise to finance these start-ups and projects, especially in the sustainable sector. On the other hand, personal savings are at the record high (in % of gross national income never this high in Benelux before). As interest rates are incredibly low there are limited opportunities to create returns for these savings. These two macro trends five crowdfunding the opportunity to bridge the finance gap for SME’s and sustainable projects. It is developing very rapidly worldwide, doubling each year (Massolution). Besides start and growth capital we experience more benefits with crowdfunding. For the public it is an opportunity to generate personal impact through finance. Funders feel connected with ‘their’ project or start-up and generate free publicity and advice. For banks and governments, the fundings of the crowd show the market-value and potential business case of such a project and its innovative character. On top of that, through its investment, the crowd decreases financial risk. We think that crowdfunding and regular finance instruments will work together in new models (see picture, source: StartGreen) more and more.”
More than nature thought
“In the past years, we predominantly aimed at financing sustainable energy. This funding is of course also related to the preservation of natural capital, but we did not finance biodiversity directly through our funds. Because of our participation in the CoP, we started to think about the meaning of the concept of Natural Capital. Until recently, the definition of it seemed very abstract and policy-oriented to us. However, when we scanned our crowdfunding portfolio, it appeared that we financed more natural capital related projects than we thought. Think of organic flower bulbs, protection of natural parks, initiatives to create a healthy sea and the preservation of bees. We expect to finance more biodiversity through crowdfunding because of the sustainable relevance and the public awareness. The network of CoP FiNC really helped to have a better understanding and network in this area. What we see is that much of the nature related finance is in the form of taxes and subsidies. I believe we should come up with better business cases for natural capital we could pay a role by raising awareness and by direct involvement.”
StartGreen was one of the frontrunners that formed part of a Community of Practice of Financial Institutions and Natural Capital (CoP FINC), which aimed to accelerate the transition to sustainable finance. This solution is part of a larger series of best practises that resulted from this CoP.