This demand for alternative funding mechanisms has given rise to a growing industry already estimated to be worth billions of dollars. According to recent research published by The Economist, in 2014 global investment in fintech reached $12 billion, up from $4 billion a year earlier. Separately, Goldman Sachs estimates that global revenues linked to the growth of fintech could be as high as $4.7 trillion.
Taking a step back, it's important to realise that funding is just one (important) piece of the puzzle. In addition to securing capital, there are a myriad of resources, services and environmental factors that are critical to startup development.
Timely access to professional services (such as legal, tax, accounting and developers / programmers) has been shown to play a positive role for startups to succeed. As a result, today we are witnessing the growth of ecosystems in many cities around the world - designed to support the growth of startups and small enterprise. In dedicated areas or business hubs, incubators, accelerators and shared office spaces - knowledge sharing and mentor services - form networks that support thriving business activity.
Together, these groups of experts assist startups and ensure they have access to timely knowledge and the information they need, beyond capital requirements.
In addition, many governments around the world have rolled out new regulation covering equity crowdfunding or P2P lending and online digital investments. Governments are taking active steps to keep up with innovation in finance, by providing the frameworks and environment in which operators and participants can transact safely and efficiently.
As startup ecosystems grow, so too do the associated services that support them. At this highest level of small enterprise planning, the neural networks or sophisticated platforms that monitor and mange them, connect all the stakeholders in real time and with access to critical business data. Using these networks it is possible to better plan, measure and drive the growth of startups, to identify bottlenecks and better allocate resources to them. Find out how Grow Advisors can help sustain a startup culture in your city through highly connected networks.
Of course, ensuring adequate access to capital is a key component of the ecosystem is never a bad thing.