Success Factors in Reward based and Equity based Crowdfunding in Finland

Master’s Thesis 
37 
funders participating in crowdfunding are not educated in the details of crowdfunding 
legislation. This in turn results in ambiguity regarding the legislation. Not understand-
ing which laws a crowdfunding project is subject to, can be incredibly detrimental to 
the success of said project. Thus, De Buysere et al. (2012) suggest a three-part system 
for crowdfunding policies: 
• Legal regulation (funder protection and financial control) 
• Education (educating stakeholders on crowdfunding benefits) 
• Research (transparent and open approach)
 

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Master’s Thesis 
38 
7. Crowdfunding in Finland 
Entrepreneurial activities have been on the rise in Finland, and entrepreneurial culture 
has improved in recent years (Napier et al., 2012). Entrepreneurship is seen as a desir-
able career choice in Finland. (Lasrado and Lugmayr, 2013) Approximately 93% of 
Finnish businesses have less than ten employees and 26% of all employees work in 
these micro enterprises
10
. 
Most new businesses ventures are funded at least in part by the Finnish government 
agencies (Lasrado and Lugmayr, 2013). The government grants monthly financial aid 
for startup entrepreneurs
11
, which in 2013 amounted to approximately 27 million eu-
ros
12
. 
Although Finland is very supportive towards entrepreneurs, help aimed at 
startup entrepreneurship has not come to full fruition (Napier et al., 2012). Possibility 
for entrepreneurs to look for alternative funding is limited. Equity financing has 
dropped drastically since 2008 in Finland. 
(Lasrado and Lugmayr, 2013)
Additionally, 
banks have a much more low-risk policy in terms of loans, and thus hesitate to invest 
in new risk-high ventures – not surprisingly, bank loan financing has decreased since 
2008 (Napier et al., 2012). 
With the decrease of available funding for new entrepreneurs from traditional sources, 
crowdfunding has gained popularity in Finland. Five active crowdfunding platforms 
have emerged recently. Although crowdfunding as a concept is becoming more popu-
lar, Finland still lacks behind many other developed countries. Finns are slow to adopt 
new innovation and financial options. Motivations for participating in crowdfunding 
do not differ from motivations in other countries, but the importance of financial re-
wards should be noted. (Lasrado and Lugmayr, 2013) 
One key distinction in the Finnish crowdfunding setting is legal regulation. Under-
standing Finnish laws is crucial for success, thus educating Finns on legal regulation 
is the biggest challenge crowdfunding platform face at this point in time. Donation-
10
http://www.yrittajat.fi/File/58894954-665a-4e66-95e6-
1134e13dd10f/SY_yrittajyystilastot_2015_ENG.pdf
11
http://www.finlex.fi/fi/laki/ajantasa/2012/20120916#L8P1
12
https://www.tem.fi/files/44299/ELY-keskusten_ja_TE-
toimistojen_myontamat_yritystuet_v._2013.pdf

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