Portuguese crowdfunding: Exploring new entrepreneurial shores
Portugal currently faces economic challenges that require a boost in productive activity to generate the outcomes its people deserve.
“Access to finance is essential to enhance the competitiveness and growth potential of small and medium enterprises,” said European Commission Vice President Antonio Tajani, responsible for industry and entrepreneurship, in December 2011. “In the context of the current crisis, marked by a fall in lending to the real economy, it is increasingly difficult for such companies to access loans.”
Portugal has experienced the fastest growth in innovation performance among EU member states as per the European Union’s 2010 Innovation Scorecard, and now requires innovative alternatives to funding mechanisms and sources to potentiate its innovation capability.
At a time when alternatives to traditional forms of finance are welcome and the technology to deliver them is abundant, crowdfunding has a strong potential to positively disrupt the entrepreneurial generation setting and grow to a position of significant relevance in society. Crowdfunding will thrive in an environment like Portugal.An Introduction to PPL
PPL.COM.PT stands for “People With Portugal,” as in Portuguese “com” means with.
In May 2011, the four founders of PPL realized the liquidity gap between aid and microfinance solutions up to traditional investor and venture capital funding in Portugal, where bank loans used to predominate, was disabling several innovative ideas from launching and becoming successful. Passionate for the do-it-yourself spirit but also all things collaborative, we decided to be a part of the pioneering movement of Portuguese Crowdfunding this past summer. PPL Crowdfunding Portugal is a status quo disruption very much needed in a country with plenty of ideas but some barriers to develop them.
PPL is unique for the regional flavour it brings, for the qualities and values of the team behind it and for the differentiating marketplace innovation it is working on and developing. It potentiates a truly engaged community looking to exchange funds and skills, resulting in innovative and creative projects. This is accomplished with local action but global thinking, where PPL networks with the strongest references in the field and works with partners and other European and North American platforms to collectively push the envelope in this new area and promote a strongly positive and impactful democratization of finance.The Learning Process
Our team operates a crowdfunding platform, but also actively studies the phenomenon, writes about it — currently two of the four founders are studying and writing theses on the matter — and looks at how it can be utilized and adjusted to maximize its potential to the people. Since PPL’s launch, we’ve achieved critical learning in online funding processes, community building and management mechanics, and gained very relevant overall experience and credibility. Today we’re looking to grow the business, add relevant functionality and enlarge the participating community both as a source of new projects with incremental value and impact and as a source of investment and promotion.
In the future, PPL will become a marketplace for the “very well made in Portugal,” where resources, projects, ideas, products, services, promotion, results, shares and support will flow freely with minor and very low cost intermediation. This method of funding will go from alternative to mainstream and will complement and work tightly with other traditional methods of finance such as angel investing. The concept is then applicable and exportable to any region – it’s a local marketplace with a global vision.
So far, the strength of the community, as small as it might be to start off with, has been a positive surprise to us. People that engage with a project, originally to buy a reward or support an entrepreneur, become much more involved and come to “own” the project. The crowd has contributed with content, skills, resources and funds to several projects. For some projects, the crowd itself has become the main promoter, voicing their support in a viral networking effect.
The satisfaction derived from all involved and the sense of accomplishment with a visible impact has been extremely satisfying. Most of the projects funded thus far would not have found their way out from the drawing sketches, so the most relevant lesson has been that the ability for the crowd to validate, curate, support and then own, promote and finance an initiative is something not to underestimate. It is also a great responsibility for a platform such a PPL to intervene enough to ensure trust, efficiency, security and growth of such a mechanism, but we’ve come to understand that such movements are desired and driven by the crowd and ultimately belong to it.Act Local, Think Global
Although still very young in its life, PPL has already managed to fund several projects, two being from Mozambique and one from Angola, with investors coming in from the United States, Europe, Africa, the Middle East and Asia. These projects had the support of a Portuguese entrepreneur, but already an international span is a natural trend in this act local, think global strategy.
Rating agencies and doomsayers may preach the end of our world, and new challenges will certainly require a collective gathering of forces and efforts to overcome this current economic struggle. We rest assured, however, that boosted by tools of open communication and channelling of funds and resources, our innovative mindset and survival spirit will keep the light at the end of the tunnel at bay. Portuguese entrepreneurs are set to reach fertile shores and they have the capabilities and tools to establish profitable trading routes with benefits to all involved.