Demand for New Financial Instruments


When it comes to investments in Europe, as presented in the figure above, SMEs, startups and real estate projects mainly rely on bank loans (50%) and credit lines (55%) for their financial needs. Private equity, venture capital and business angel investors are fulfilling just a small niche for high-tech and high-growth firms and do not actually fit the majority of companies’ needs.

This traditional model of raising investments is being stretched to its limits, as more and more innovative and rapidly-growing SMEs, startups and real estate projects need equity and mezzanine capital.

The growth, on the other hand, is in stark contrast with bank regulations. The rules and procedures by which companies must comply to raise funding is gradually becoming more complicated and dismissive, therefore reducing these firms’ access to bank lending.

On account of these reasons, the need for alternative investing methods has risen, leading to the expansion of alternative financing methods.

The Power of the Crowd...

Emerging technologies have afforded startups, SMEs and entrepreneurs with new investing approaches for securing financing. Some of the fastest-growing and most important methods are referred to as crowdfunding or alternative financing, meaning a broad range of people are now able to finance projects and companies.

Crowdfunding, which until recently only supported local and creative projects, has now become a popular way of raising money around the globe. Startups and entrepreneurs with incredible ideas are now securing investments through various platforms for crowdfunding. Because these platforms differ from traditional funding methods, they’re considered revolutionary and may boost sales and marketing via a “cool” factor.

The first (and most important) achievement is the automatization and optimization of the process, thereby reducing costs. Previously, small businesses were prevented from entering the financial market due to its high price tag. By giving firms a chance to set up a legally-compliant platform for crowdinvesting, CONDA provides every business a fair opportunity to succeed.

In short, crowdinvesting offers investors the opportunity to legally invest in small companies and startups; these same companies can thus realize their ideas, thanks to the power of the crowd.

...and the Democratization of Financial Markets

Blockchain technology is a simple and easy way to create a completely decentralized market on a trusted technological layer. The procedure of an ICO is almost the same method used for an IPO except that there are fewer intermediaries with an ICO.

As the popularity of blockchain has grown, the number of companies launching their own ICOs have grown as well. Over the last couple of years, ICOs have become very popular ways of gaining investment.

With the CRWD Network built by CONDA, companies get an opportunity to release their own tokens and raise funds via a broad network of platforms.