NEWS The CrowdfundingHub launched Europe’s report on Crowdfunding this week: The Current state of crowdfunding in Europe.
The alternative finance industry is a young industry and there is not a universally accepted taxonomy yet to describe the different actors in the industry. In The European Alternative Finance Benchmarking Report from Cambridge University (February 2015) this issue was already addressed. The Benchmarking Report followed the taxonomy of nine categories of business that had been constructed in defining and segmenting the UK alternative finance market in previous studies. CrowdfundingHub choose to follow this taxonomy as well and focusses in the research on the four following types of crowdfunding:
• Donation based crowdfunding
• Reward based crowdfunding
• Peer-to-Peer lending (where possible subdivided into consumer and business lending)
• Equity based crowdfunding
The lack of a clear taxonomy is a hindrance for research. In the documentation and information received about the crowdfunding industry in different countries, terms are used that do not always follow the same taxonomy. Crowdinvesting, crowdlending and crowdfinance are frequently used terms but they aren’t accurately defined. At least they are not defined on a European level and have a different meaning in the separate countries. For example crowdinvesting is sometimes used as a synonym for equity based crowdfunding and sometimes it includes both equity and lending based crowdfunding to entrepreneurs. For the sake of uniformity, CrowdfundingHub tried to avoid the words crowdinvesting, crowdlending and crowdfinance and converted them.