Exploring the potential role for crowd-funding in SME start-up financing: a comparative study of the perspectives of Bank Executives and SME Owner-Managers
In Northern Ireland over 95% of all SME funding is still sourced through banks although bank lending has declined to small and micro SMEs and funding costs remain higher than for larger businesses across the UK. A potential solution to this funding problem is the innovation of crowd-funding which involves a large number of individuals, i.e. the crowd, providing funding to organisations thereby bypassing traditional forms of finance (Belleflame et al, 2013; Mollick, 2014). Awareness of crowd-funding platforms appears low in the SME community across the UK and early evidence suggests that SMEs are reluctant to engage crowd-funding platforms to test their new ideas and/or garner financial support for their venture.
That said, the global crowd-funding economy has tripled from 2011 – 2013 (to a current global value of $5.1b). Extant research with Banks in the UK identifies a lack of lending to SMEs, especially higher risk start-ups, and also low awareness of new online funding solutions on the part of bankers, (Durkin et al, 2013). There is an opportunity for SMEs to be better educated about the potential advantages of crowd-funding in their business contexts and to be positioned to make more informed decisions around the possible appropriateness of this platform.
This research study explores the potential role for crowd-funding in SME start-up financing through a comparative study of the perspectives of Bank Executives and SME Owner-Managers.
Putting Value on Innovation through an Asset Based Community Approach: Action Research on the Grow Trust
This project is a pilot study to investigate the contemporary entrepreneurial activities of the Grow Trust, an asset based community partnership. This initiative is adopting Social and Open Innovation practices towards developing a fairer society, meanwhile enabling sustainable business to be achieved. This unique study bridges the gap between theory and practice and explores the Open Innovation mechanisms of collaboration used by this initiative to engage community groups from both rural and urban areas.
The Grow Trust is already providing inspiring examples of good innovative practice with small stage approaches making tangible differences. Through the power of a bottom up approach, they engage collaboration by the community. The overall objective of Grow Trust is to establish sustainable businesses within the differing communities which belong to Grow Trust: Linwood and Govan are inner-city communities in areas of multi-deprivation, Beith is semi-rural and Lochboidsdale rural. All these communities have received numerous grants and awards from policy makers in a ‘piece meal’ way for specific projects which have had a tendency to ‘fail’ once the funding has ceased. Through establishing sustainable new ventures Grow Trust will not only increase income generation within deprived communities, creating employment and increasing capacity, they will empower these existing communities.
The aim is to better understand the micro-processes involved in this new trend of Asset Based Community Development in Social Innovation, which is an under-researched area. The impact of this project will also provide Knowledge Transfer between the host institution where the applicants are located and Grow Trust.