My two cents

YC Felin is the founder of Crwdpark (Crwdpuisto), an initiative that promotes information on crowdfunding with the aim to inspire people to find new ways to make most of crowdpower.Looking for money to start a new company or expand your business abroad? The conventional way to conquer the world would be turning to family and friends for financial support or humbly ask the bank for a loan.Today it is possible to raise money for business from anyone in the world. Crowdfunding is a rapidly growing industry due to the light industry regulation, emergence of crowdfunding platforms and a new breed of social media savvy generation who puts emphasis on value-based spending.

In Finland, crowdfunding has not yet mushroomed though potential is there. Why are not Finnish companies taking advantage of crowdfunding?

For businesses crowdfunding can take form of reward-based, equity-based and/or debt-based funding. Several Finnish startups including sleep tracker provider Beddit (raised USD 500,000) and children book Hello Ruby (USD 380,000) have had success with reward-based funding. There are few equity-based platforms such as Seedrs, FundedByMe and Invesdor, where a Finland-based company can pursue international investors. More players would be welcomed.

The biggest crowdfunding market, the US, currently has variety of specialised platforms ranging from cleantech and medical research to real estate. We can expect more funding platforms focusing not only in startups but also in established companies with global expansion in mind. A 2013 study commissioned by World Bank estimated the global crowdfunding industry would become 1.8 times bigger by 2025 than the size of the global venture capital industry today.

Meanwhile, the Finnish crowdfunding industry is still in its baby steps. Finnish authorities don't know whether to promote it or rein it in. In July 2014 Finnish Financial Supervisory Authority recommended tighter regulations to equity-based crowdfunding services to the surprise of the industry, creating more obstacles for companies looking for funding.

Instead of fearing, why not take advantage of the best sides of crowdfunding? Technology, money and best practices are already there.

As Finnish officials paint the worst-case scenarios of crowdfunding, the world is leaping forward. Crowdfunding not only helps with business financing, it also forces companies to re-evaluate their business model based on investors' questions and feedback. Additionally successful crowdfunding can later attract the interest of business angels, VCs and institutional investors.

In the future more companies will be using crowdfunding as a proof-of-concept, to test target markets and to build credibility towards traditional investors and business partners. State-owned financial players (e.g. ECAs) and local business angels might respectively value those businesses that have been successful during and after crowdfunding. Finnish public players with history of internationalising Finnish companies could unite with local investors and take crowdfunding as an excellent method of business validation.

It is critical for Finnish companies to access funding, valuable insights of investors, business partners and future clients. Let's give a hand to Finnish companies to make use of cross-border crowdfunding. Investments, jobs and success stories will follow.

This article is provided by Helsinki Business Hub