Spanish 'startups' rely on 'equity crowdfunding'
Spain is the fifth largest European market in terms of alternative finance.
According to a study by Cambridge University, the alternative finance market in Spain accounted for 50 million euros in 2015, which represents a 39% increase on 2014. And within a period of three years, crowdfunding platforms have generated 103 million euros in investments (17 million in 2013, 36 million in 2014 and 50 million in 2015).
The study also points out that Spanish startups prefer equity crowdfunding (funding in exchange for stocks: investors provide capital to develop a company and share in its earnings, if any). In Spain, this market grew by 75% on average between 2013 and 2015.
Equity crowdfunding is very convenient for startups when compared to traditional finance rounds – the conditions are set at the start of the process and entrepreneurs have access to countless investors remotely.
Equity crowdfunding is very convenient for startups when compared to traditional finance rounds
Legally, startups that wish to use equity crowdfunding from certified investors can raise up to 5 million euros. The Spanish Act on Promotion of Business Finance also stipulates that a company that uses equity crowdfunding must set a finance goal of 125% or less of the funds they request.
Back to Cambridge University's study, Spain is light-years away from the United Kingdom, which totaled 4.4 billion euros of the 5.431 billion euros raised in 2015. The market in France amounted to 319 million euros, 249 million in Germany, 111 million in the Netherlands, 64 million in Finland, 37 in Belgium and 32 in Italy. Overall, the European online alternative finance market grew by 92% in 2015 to 5.431 billion euros.