Crowdfunding in Belgium: the basics explained

This article explains what Crowdfunding is and describes the crowdfunding landscape in Belgium with its market players and its economic potential.

It also looks at the co-financing model of combining traditional funding with crowdfunding and looks at the pros and cons of crowdfunding for the entrepreneur and the investor.

Finally, it provides a hands-on checklist for the entrepreneur on how to prepare a successful crowdfunding campaign for his business.


  • What is Crowdfunding?

    • 1. Donation

    • 2. Reward

    • 3. Equity

    • 4. Lending

  • Crowdfunding market size

  • How does crowdfunding work?

  • Crowdfunding market in Belgium

  • Is crowdfunding the holy grail for the entrepreneur?

  • Checklist for the entrepreneur in need of funding.

  • Conclusion

What is Crowdfunding?

Crowdfunding is simply the use of small amounts of capital from a large number of individuals to finance a new business. Crowdfunding makes use of the easy accessibility of vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together, and has the potential to increase entrepreneurship by expanding the pool of investors from whom funds can be raised beyond the traditional circle of owners, relatives and venture capitalists.

Crowdfunding is an alternative form of financing for a project. You have 3 parties: the lender, which is typically a start-up or small enterprise in search for extra capital to finance his expansion, an investor willing to invest into that company in return for an upfront agreed return and a go-between: the crowdfunding platform to manage this process. To finance a project, the entrepreneur typically goes to the bank first to request a loan. When that is not-, or only partly successful, crowdfunding could be an alternative to bridge his financing gap. When both the traditional banking loan, and the crowdfunding loan coincide we talk about co-financing.

Crowdfunding is the ‘container’ term for 4 different types of funding: Donation, Reward, Equity, and Lending:


1.     Donation

Here the investor donates money to the project, without anything in return:

  • Small amounts

  • Usually charity or social projects

  • Individual persons

  • Create visibility for a social cause/problem



2.     Reward

The investor receives a compensation or reward for the investment made. This could be in the form of a product (e.g. tickets, free CD from a music band), or a service (e.g. free cleaning of his car for a car-wash start-up)

  • Small amounts

  • Creative professions, also professionals

  • nteresting rewards

  • Prototype building

  • Activate clients, ambassador building




3.     Equity

The investor becomes a shareholder of the company he/she invests in. This usually implies some form of active management or involvement from the investor into the company. When the company makes a profit, the investor will receive his share through e.g. dividends.

  • Higher amounts

  • Minimum starting amounts required

  • Innovative growth companies

  • Creation of network of (international) investors

  • Activate clients, create ambassadors

  • Investors become shareholders


4.     Lending

The investor is part of a crowd that is lending money to the lender (start-up or small enterprise). The investor will get monthly paybacks from the lender, usually managed through the crowdlending platform as go-between.

  • Higher amounts

  • Very severe conditions (min of 3 years of activities, proven revenues, good future prognosis)

  • High interest rates

  • Usually ‘matured’ start-ups (= scale-ups)

  • Create ambassadors without diluting company shareholders stakes



Crowdfunding market size

The market size in Belgium is still small: 24,9 Million Euro has been crowdfunded in BE in 2017, which is about 1/10 of the market size of our Dutch neighbours (223 Million Euro in 2017). Around 50% in Belgium is crowdfunded in the form of a loan (rest is donation/rewards), with average amount around 11.000 Euro per project.

Worldwide Crowdlending covers 97% of the crowdfunding market:


How does crowdfunding work?

There are many crowdfunding platforms, and all have their different flavours, but as an example for crowdlending the main process is as follows:

Usually the lender contacts the crowdlending platform with a funding request for its (new) business. The crowdlending platform will perform a business case analysis/credit analysis check on the company and, upon approval, will ‘pitch’ the request via its website to the crowd (= its registered investor base). It will then ‘open’ the loan to the investors for subscription and will close off the loan when the requested amount is subscribed through the cloud. In cases where the requested loan is not fully subscribed to by the cloud, the crowdlending platform will close off the demand and return the money to the investors (all or nothing rule).

Cost structure

The crowdlending platform will issue costs on both lender side (filing costs, campaign costs, credit analysis...) and investor side (management costs). Typically, the crowdlending platform will issue a loan to the lender at a rate of 6-9% and will guarantee a net profit to the investor of 3-5%. For sure there is always an investment risk: when the lender goes bankrupt the investor will lose its invested money into the company and is therefore recommended to spread his investments into various companies.


Some platforms will just put in contact the lender and investor, with no extra service delivered. Other platforms will provide additional support to both lender and investor and this before, during and post campaign. Campaigns are very important for the lender to position his company correctly to the crowd, hence good campaign management (e.g. with full transparency on the figures of the company, professional video...) is essential in preparing for a successful crowdfunding.

All or nothing

Usually the requested loan with its terms and conditions is posted to the crowdfunding website a couple of days prior to the opening of the case, so investors can be informed upfront. The ‘all or nothing’ rule implies that the campaign ends when the requested amount is subscribed to. In case of non-100% subscription the received amounts are returned to the investors. Some platforms allow to overinvest, meaning raising more capital than the initially requested amount.

Crowdfunding market in Belgium

In Belgium the crowdfunding market is still relatively small compared to France and the Netherlands but is growing steadily. For reward and donation in Belgium some of the most active players are Ulule, KissKissBankBank, Gingo, Yeee-Haaa, Hello Bank, Finicrowd and World of Crowdfunding. For equity you have Seedrs, Bolero Crowdfunding (KBC), Socrowd and FundedByMe as most active players. For crowdlending, the top 3 (July 2018) is:  Look&Fin, Spreds (ex myMicroInvest) and Bolero Crowdfunding (KBC). Some platforms combine the different types of crowdfunding.

If you look at the co-financing part (combining traditional funding with crowdfunding) the activities of the 4 major Belgian banks related to crowdfunding are as follows:

  • KBC through their own Bolero platform

  • ING has a partnership with Seedrs and KissKissBankBank (reward and donation only),

  • BNP Paribas Fortis offers crowdfunding through HelloBank (cooperation with the Ulule crowdfunding platform), and

  • Belfius had a partnership with the platform, but that partnership seems to have disappeared ( is still active in Belgium).

Is crowdfunding the holy grail for the entrepreneur?

No, it isn’t..

While reward and donation might help to fund small projects easily with the help of social media/crowd (writing you first book, launching your first CD’s, help a person to finance its medical costs), the professional crowdfunding (equity and lending) will apply the same financial mechanisms on due diligence, business case analysis and credit analysis as traditional financing today.

Hence the requester needs to have a ‘rock solid’ project on offer, and the crowdfunding platform will have to prepare well his case upon approval, pitch it well to its (inner)crowd of known/registered investors, and provide decent follow up on questions and support both on lender and investor side.

Never forget that crowdfunding is hard work!

Furthermore, the lender has to realize that (lending) costs could be much higher than traditional loans (up to 10% of interest rate), and that you sometimes have to accept high transparency and lots of media attention for your project (although that might also be good marketing for your business).

On the downside of things, it might be hard for the entrepreneur to explain your customers you have not made it through in case of unsuccessful closure of the campaign (meaning, not all demanded capital was raised).

For the investor, it is important to wisely choose your crowdfunding partner based on their conditions, professionalism and campaign assistance. As an example, have a look at the ‘Rolls-Royce’ of crowdlending in the Netherlands: Collin is the number 1 in crowdfunding in NL with impressive figures Year to Date (July 2018):

·        114 Million Euro of loans successfully raised

·        99,4 % success rate on requested loans

·        Biggest loan crowdfunded: 1,7 Million Euro

·        Impressive investment base of 15.000 active investors

These investors can rely on a professional business case and credit analysis of the project, with full company transparency by means of publishing their Dun and Bradstreet and the Collin internal risk rating on each published project. For dynamic investors a loyalty program is offered, with net profits on investments up to 5%.

Checklist for the entrepreneur in need of funding.

If you are an entrepreneur in need of capital for a new project or wanting to expand your current business, here are some guidelines to follow:

·        Prepare a good business case for your project, and provide full transparency on anticipated customer growth and future revenue/profit prognosis

·        Go to your traditional banker first and ask for a traditional loan (usually cheapest interest rates)

·        In case of no-go, ask for co-financing alternatives (e.g. 1/3th traditional loan, 2/3th via crowdfunding)

·        Investigate other financing alternatives in parallel to closing your financing gap: win-win loans, business angel network, government financing for start-ups (e.g. Participatie maatschappij Vlaanderen (PMV), SambreInvest, LaMeuse Invest). Remember that every time you will have to ‘pitch’ yourself, so a good business case and/or company presentation is fundamental!

·        For equity-based crowdfunding: be careful to accept the conditions from your investors, as it usually means you are forced to accept new shareholders and/or involvement through micro-management in return of extra cash.

·        Don’t forget the ‘FFF’s’: fools, family, friends as a (last) alternative funding resort.


In conclusion, crowdfunding in Belgium is there to stay, but as an entrepreneur choose your platform/partner wisely. Also pick your cards well: the reward and donation route might be easier to handle but provided funds will be rather limited – for professional crowdfunding needs (e.g. fast growers) rather move to crowdlending or equity-based funding. Don’t forget to check the co-financing options through your traditional banker.

For investors, crowdfunding is a good alternative to the current low interest rates given, but never forget it remains risk-capital, therefore the first rule of investment applies: spread your investments across companies and businesses.

Frank Smits

About the Author


Frank Smits is a managing consultant @ Initio Belgium, with over 20 years of hands-on project-, program management and business case management experience. He is also a certified Agile/Scrum product owner.