In many European countries, the creative business is one of the fastest growing sectors of the economy. If in doubt, just check out our Culture Matters section. Besides, funding is still problematic in this sector, especially when it comes to small and medium-sized enterprises. If you are in a business of this kind, you might be interested in the report focusing on innovative financing instruments for the cultural and creative sector. In the first chapter of Access to Finance, the authors explore traditional and innovative instruments for accessing finance and provide case studies. The publication also includes a roundup of the challenges and problem-solving measures for small and medium-sized enterprises that look for financing for their projects.
1. Support for pre-seed and seed stage companies. It is hard to find financing on the early stages of the project in view of the lack of recognition and experience. In this situation, the authors suggest crowdfunding as an opportunity to present the product to customers. In a wider perspective, they recommend to build infrastructure and get coaching.
2. Support for start-ups. In this phase, the entrepreneur still depends on his own financing and the support from friends and family. Often, it is a time of team building and investments that bear no returns. It is a risky time for investors, but business angels and venture capital firms may be interested.
3. Incubation support. For this step, you need to find contacts and a comfortable working environment. In order to save time and money, collaborate with business incubators.
4. Development of products and services. In this phase, you will need sufficient financing. The support instruments applicable in this situation are grants, loans, crowdfunding, etc.
5. Support for innovation. The SME’s initiatives can be innovative, but the authors of the report point out the lack of business skills among creative and culture entrepreneurs. They advise looking for partners from larger corporations outside the creative field.
6. Financing Intellectual Property. It becomes more common and often exists as a model of equity financing.
7. Social investment in the arts. This final step will bring social and economic revenue for the project.