ANDY MURRAY, a tennis ace, made headlines this month—off the court as well as on it. He is teaming up with Seedrs, an up-and-coming British crowdfunding platform through which small companies sell stakes in themselves. The Scot will advise Seedrs on the health, sports and wearable-technology sectors as well as make the odd investment himself. Through such websites, individuals and funds provided over €1.5 billion ($2 billion) in equity and debt to European small and medium-sized enterprises (SMEs) in 2014, according to researchers at Cambridge University and EY, an accounting firm.
That is a pittance compared with the €926 billion of total new external funding made available to European SMEs the year before, mostly by banks. But the amount is more than doubling each year. That is heartening, since European banks, nursing big losses from the financial crisis and trying to rebuild their capital ratios, have trimmed lending to businesses by 12% over the past six years.
Crowdfunding is just one of a number of ways in which European SMEs, typically far more reliant on bank financing than their American counterparts (see...Continue reading
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