E4D Case Study: Part A
Impeial College Business School
Crowdfunding and Renewable Energy Investment
Teaching Case Study on Abundance Generation
December 2014
Abundance Generation
Imperial College London
Case Summary
In just a few years, a small but growing number of online platforms have established
themselves as intermediaries for relatively small retail investors seeking long-term, stable
investment returns. This case study looks in depth at the historical growth and strategic
choices facing a crowd-lending platform focused on matching investors with clean energy
infrastructure investments in the United Kingdom.
Abundance Generation, co-founded by Karl Harder, Bruce David and Louise Wilson,
facilitated more than £7million of investment in 8 wind and solar projects from 1,500 people in
just 2 years. Meanwhile more broadly, crowdfunding has emerged as a global phenomenon
with the potential to disrupt the existing ways in which modern finance is transacted.
Despite these growing trends, a number of questions still remain: What is the potential for
crowdfunding as an alternative source of capital for making scalable investments in renewable
energy infrastructure? Over the next 5-10 years, what are the different factors - such as
regulatory policy, capital constraints and the evolution of crowdfunding platforms - that will
influence key decisions to be taken by senior management as it seeks to compete with
mainstream banking?
This case study written by Charles Donovan (Principal Teaching Fellow) and Christopher Corbishley (PhD
candidate) at Imperial College Business School. The case is an adaptation of a chapter written by Sam Friggens
and Karl Harder for the book Renewable Energy Finance: Powering the Future, edited by Charles Donovan. The
authors acknowledge the support of the Abundance staff for their invaluable assistance in gathering the material
for this case study.
This case is for educational purposes and is not intended to illustrate either effective or ineffective
management of an organisational situation. The situations and circumstances described may have been
dramatized or modified for instructional purposes and may not accurately reflect actual events.
This material is provided free of charge under an Attribution-Non-commercial-No-Derivations Creative Commons
licence. You may download this work free of charge. It may not, however, be changed in any way or used
commercially.
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Background
In 2012, when a wind turbine started spinning in the historic village of St. Briavels on the border
of England and Wales, it was more than just another small step towards a clean energy system
in the UK. The turbine lay claim to be the first renewable energy project in the world financed
through crowdfunding, a 21st century phenomenon that involves large numbers of individuals
coming together via the internet to directly raise money for projects or ventures of their
choosing. A total of £1.4m was collectively invested by hundreds of people who stood to
receive annual financial returns of 6-8% over a period of 20 years. The achievement signified
the evolution of crowdfunding from a niche – driven by donations and rewards – to a viable
investment mechanism capable of delivering new sources of private finance to fund 21st
century infrastructure.
A small but increasing number of crowdfunding companies had begun to provide the online
platforms to connect individual investors to renewable energy investment opportunities in this
way. In 2014, Abundance Generation was leading the UK market. Established by three
founders – Karl, Bruce and Louise (Appendix 1) – they had facilitated £7.2m of investment in
8 wind and solar projects from 1,500 people in just 2 years. In the US, Solar Mosaic had raised
over $9m for solar projects in a number of states including California, Florida and New Jersey.
In France, Lumo has successfully funded a number of local pilot projects and is set to formally
launch following the introduction of new crowdfunding regulation there.
Within a relatively short period of time, these companies had built the online infrastructure and
financial processes essential to their operations, shaped emerging regulatory regimes and
established an intellectual framework rooted in notions of choice, ethics, disintermediation and
the democratisation of finance. Above all, they have proved renewable energy crowdfunding
can deliver tangible outcomes on the ground. Despite this early success, a cursory comparison
of the relatively small amounts raised to date with the huge sums needed to transform the
global energy system (see Figure 1) showed the distance renewable crowdfunding had yet to
travel before it could make a serious dent at national or global scales.
Figure 1: Required investment by green sectors over the next two decades (£ billions)
Source: Vivid Economics analysis of various sources, see Appendix 2 for more detail
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The origins of crowdfunding
Different explanations have emerged as to the origins of crowdfunding. One reference point
sometimes held to be the first example of a modern online crowdfunded project is the raising
of $60,000 by fans of British rock-group Marillion to fund a US tour in 1997. This interpretation
sees crowdfunding as an essentially new phenomena defined by use of the internet and the
organic coming together of like-minded individuals to financially support a common cause. By
contrast, other interpretations emphasise crowdfunding’s links with earlier forms of
decentralised finance; viewing it not as a radical break from the past but as a natural evolution
of older mechanisms reformulated and modernised for the digital age. In this spirit, a World
Bank report has described how crowdfunding “began as an online extension of traditional
financing by family and friends; communities pool money to fund members with business
ideas” (The World Bank, 2013, p.8).
Figure 2: Joseph Pulitzer (left) launches the Statue of Liberty ‘pedestal fund’
Source: United States Library of Congress's Prints and Photographs division
Indeed a broader historical perspective offers rich pickings in identifying early forms of capital
raising that display at least some, if not all, the characteristics of modern-day crowdfunding.
In the 19th century, for example, newspaper publisher Joseph Pulitzer used appeals in The
New York World to raise $100,000 from 125,000 people in six months to fund the completion
of the pedestal to the Statue of Liberty. As a reward, the name of every contributor was later
published in the newspaper (US National Park Service, 2014; BBC News, 2013). In the 18th
century the Irish Loan Funds first developed by Irish nationalist and author of Gulliver’s
Travels, Jonathan Swift, involved the pooling of philanthropic donations to fund millions of
small-scale loans to poor households. In the absence of collateral, repayment obligations were
enforced through mechanisms of trust and social capital; borrowers were required to present
a guarantee from two neighbours who were immediately notified if a repayment was missed
(Hollis & Sweetman, 2001). Even further back, the 17th century coffee-houses of the City of
London can be seen as arenas for an earlier form of disintermediated capitalism; places of
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exchange where investors and investees met face-to-face in the absence of financial
intermediaries, to directly trade the first shares in commodities and companies.
Crowdfunding models
At present there is no universally accepted definition of the term ‘crowdfunding’ and related
concepts such as peer-to-peer lending. The terms are used by different people to mean
somewhat different things in different contexts. For example the UK’s Confederation of British
Industry uses crowdfunding to refer principally to contributions made in exchange for nonmonetary rewards (CBI, 2014). However others such as the online platform Funding Circle
use crowdfunding to refer to equity investments (usually in start-ups) with peer-to-peer lending
used to describe other types of debt investments (usually in more established businesses)
(Funding Circle, 2014).
There are currently four main crowdfunding models, which offer individuals, enterprises and
charities a variety of options for raising capital in the form of debt, equity or donations:
1.
2.
3.
4.
Lending model (notable examples include Prosper, Lending Club, Funding Circle)
Equity model (Crowd Cube, Crowd Angel, Fundable)
Donations model (GoFundMe, YouCaring)
Rewards model (Kickstarter, Verkami, PledgeMusic)
While donation-based platforms are currently the most prevalent, equity and lending models
are beginning to experience increased popularity (see Appendix 3). In terms of lending
platforms, beyond the five main platforms mentioned above a host of start-ups are now staking
their claim in the latest gold rush in financial technology.
Brands such as Peerform (US) and Thin Cats (UK) are competing head-to-head with the likes
of Lending Club and Funding Circle, while others are seeking to establish themselves in
unclaimed corners of the credit market. In the US, Social Finance Inc. (SoFi), began by
targeting the $1.2 trillion student debt market (Zibel 2014) and is now moving into mortgages
and some consumer loans. Since 2011 it has loaned $1.3 billion to students at the top 100 US
universities. SoFi pools money from individuals and institutions and then makes loans directly
to borrowers at fixed rates. In December 2013 it completed the first securitization of
marketplace originated loans; and in July 2014, its second securitization was rated A by
Standard and Poor’s. Returns are based on the performance of the overall loan book.
In the UK, Lend Invest and Market Invoice are growing fast with £166 million and £287 million
lent, respectively. Lend Invest focuses on the residential and commercial real estate sector,
with bridge and buy-to-let financing. Loans are secured against the property with terms
between 1 - 3 years. Loans are funded in a posted price marketplace. Market Invoice brings
Market Place Lending (MPL) to invoice factoring. Investors predefine risk parameters then
Market Invoice automatically funds approved loan applications on terms less than 60 days.
Neither platform has a fund to protect lenders from default, so diversification is, presumably,
the name of the game.
Zopa is a UK peer-to-peer lending platform that has facilitated well over £500m pounds of
lending from a community of 50,000 lenders since its launch in 2005. Recently Zopa has also
facilitated tens of millions of pounds of lending from institutional investors, mirroring the actions
of peer-to-peer lenders in the US who have teamed up with Wall Street funds attracted by
yield and new opportunities for securitisation (Alloway, 2013). Such moves have proved
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controversial in light of the evident tension with the principal of disintermediation, but they are
at the same time contributing to the rapid scaling up of the platforms involved. Where such an
approach is adopted a core challenge will be to strike a balance between retail and institutional
investors which retains the integrity of the crowdfunding concept and resists the temptation to
offer different terms to different types of investors.
With this caveat in mind, Zopa’s experience to date suggests the existence of crowdfunding
sites each raising billions of pounds a year is a near-term possibility. Having previously helped
to set up Zopa, Bruce Davis – one of the co-founders of Abundance – used his early
experience establishing the peer-to-peer lending site Zopa to devise crowdfunding solutions
for renewable energy.
Abundance Generation brings MPL to project finance in the form of unlisted infrastructure
bonds funded by retail lenders. The platform allows lenders to make 15 - 20 year investments
in renewable energy projects. Due to the nature of project finance Abundance Generation
operates slightly differently from other marketplace lenders. Unlike consumer or SME
marketplaces, which require scale and sophisticated data analytics, project finance requires
relationships and a deep understanding of the long term viability of projects. Approved projects
are listed on the market for lenders to fund. Interest rates are set by Abundance Generation
based on the nature of the project. To date Abundance Generation has loaned £8 million to 9
renewable projects across the UK. Abundance Generation’s early success shows the diversity
in the MPL sector.
High yields and the opportunity to directly invest in previously inaccessible types of debt have
drawn institutional investors to the sector. Combined with a fragmented platform landscape
has resulted in a cottage industry of investment platforms which focus on supply generation
and investment allocation based on proprietary analytics. Orchard, founded in 2013, is but one
example. These platforms seek to help investors, mainly institutional investors, to navigate the
nascent sector, and to further diversify by spreading bets across the ecosystem.
The benefits of crowdfunding to renewable energy financing
Some renewable energy crowdfunders are experimenting with models based on both equity
and rewards. In 2014 Dutch platform Windcentrale raised €1.3m in just 13 hours by offering
shares in exchange for an agreed quantity of ‘free’ clean electricity every year. The higher the
retail price of electricity, the greater the value this free electricity will be. In many countries the
use of share offers to raise equity from local people for community energy projects is a
mechanism that has been used for many years (the UK’s first cooperative renewable project,
Baywind in Cumbira, dates back to 1997). The transition to launching such offers online now
means a much wider group of potential investors can be accessed.
It is debt crowdfunding however that is likely to represent the real opportunity for renewable
energy infrastructure, due to the natural match between the project finance requirements of
developers and the stable low-risk returns sought by ordinary investors. As Bloomberg New
Energy Finance recently put it, “clean energy crowdfunding is much more of a debt play than
an equity play” (BNEF, 2012). In the UK, the Abundance model is based on debentures which
are debt-based securities that represent a loan to the project company and entitle the holder
to a payment every 6 months. The role of Abundance in this process is administrative: to
undertake due diligence on projects, facilitate the sale and purchase of debentures between
project and investor, and provide the forum for communication relating to the project
throughout its life. Investment occurs directly between the investor and the project company,
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and only after the project has all the necessary consents to proceed. The project company is
ultimately responsible for the delivery and maintenance of the project and for repaying its
investors.
Benefits to developers
For developers of small renewable energy projects - typically a few megawatts in size or less
- accessing debt finance has always been a major challenge. The reasons for this are varied
and well-documented but include the perception that community energy is niche and high-risk
and the fact that new small developers, such as co-operatives, often lack the balance sheet
and track-record required by most investors (Julian & Olliver, 2014). The financial crisis of
2007-08 has made this situation worse, initially by the disappearance of virtually all bank
lending to small businesses and more recently as a result of Basel III regulations squeezing
lines of credit to projects that are inherently long-term in nature. In this context crowdfunding
mechanisms that provide new sources of patient capital (capital invested for the medium or
long term) are likely to prove not just attractive but indispensable too. A secondary potential
benefit for developers is a reduction in planning risk as a result of increased local involvement
and support.
Benefits to consumers
For communities, the opportunity to host appropriately sized local energy infrastructure is often
seen as an attractive concept but one that is difficult and risky to put into practice. Debt-based
crowdfunding provides a solution to this problem. It allows experienced professional
developers to undertake the complex work needed to build and operate projects, whilst at the
same time giving people living in the local community the opportunity to invest at an
appropriate point in the development process: after the highest risk planning stages are
complete. The benefits and sense of ownership that flow from community projects are retained
but without asking more of local people than they are able to give. In addition to financial
returns, these wider community benefits can include reduced energy bills for local residents
and the use of project revenues to fund initiatives such as local energy efficiency drives and
ecological restoration. Investment in local energy infrastructure is also seen as a way to retain
wealth in the local economy, as money that would otherwise have flowed out through energy
bills is recycled back through investor returns.
Benefits to investors
For individuals looking to invest their money, debt-based renewable crowdfunding offers an
attractive and suitable asset class that has previously been out of reach. Many forms of
electricity generation infrastructure offer relatively low-risk returns but the UK’s framework for
supporting renewable energy means that projects under 5 megawatts in size have the
additional benefit of receiving Government backed inflation-linked revenues. The returns that
result from this arrangement typically reach 6-9% per year and are more reliable than many
other types of investment. Before the advent of debt crowdfunding retail investors had little
access to these kinds of opportunities. Investment in renewables or other types of
infrastructure has typically been limited to specialist funds or cooperative share offers - options
that often involve higher risk profiles, exposure to stock market volatility and significant barriers
to entry (such as high minimum investment thresholds). By comparison, debt-based
renewable crowdfunding has a lot to offer investors - including those with no interest in
renewable energy at all.
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Benefits to society
The appeal of renewable energy crowdfunding is not limited to its financial bottom line
however. By directly connecting those with money to those who need it, crowdfunding offers
an alternative to the mainstream approach to finance that has dominated for over a century.
The emergence of a global financial system in the 20th century was characterised by
complexity and a professional intermediary class of bankers and fund managers. The idea
that technology can be used to bypass these intermediaries (“disintermediation”) and
democratise finance in the process is an important intellectual underpinning of the
crowdfunding movement. From this perspective, if people take back control of their own money
and invest it transparently and tangibly in the real economy, ethics will be reintroduced into
financial decision making. Where the financial capitalism of the 20th century produced
institutions stripped of objectives beyond the pursuit of profit, disintermediated capitalism has
the potential to make markets social again, and help to build an economy more reflective of
its constituent parts.
Together, these benefits are effectively ‘the pitch’ for renewable energy crowdfunding. They
are the reasons for thinking it is a scalable model capable of making a significant contribution
to financing clean energy infrastructure in the decades ahead.
How big could it get?
The most comprehensive, publicly available assessment of global crowdfunding activity
illustrates the rapid growth achieved in recent years, estimating that $5.1bn was raised across
all types of crowdfunding in 2013 - a figure up 80% from $2.7bn in 2012 (Massolution, 2013).
Roughly half was associated with investment crowdfunding and much of this was via lending
or debt-based instruments. Geographically, crowdfunding is at present almost exclusively a
developed world phenomenon (North America and Europe accounted for over 90% of the
2012 total) but there are signs this is changing with activity in other parts of the world now
growing at a fast pace. In jurisdictions where crowdfunding is more established it is beginning
to register in the minds of those with a macro-economic outlook. In the UK, a recent Bank of
England assessment of national lending trends recognised the increasing importance of peerto-peer lending and crowdfunding sources of businesses finance (Bank of England, 2014).
The share of total crowdfunding investments specifically attributable to renewables has not
been systematically quantified but it is almost certainly very low, not least because renewable
crowdfunding is such a recent phenomenon. A simple aggregation of the publicized
investment totals from the main renewable crowdfunding platforms in Europe and North
America suggests the total raised to date for renewables is in the tens of millions of pounds
rather than anything higher. This equates to around 1% of all crowdfunded capital raised
across the globe in 2013, and it is only a fraction of the huge sums needed to fund a global
clean energy transition. Whether renewable crowdfunding can close this gap in any
meaningful way will depend on the extent to which recent growth trends can be maintained.
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Figure 3: Number of crowd-funding platforms as of April 2012
Source: Based on crowdsourcing.org directory of sites by April 2012
Looking to the future, a number of recent reports have attempted to provide indications of the
broad quantities of capital potentially available. According to Bloomberg New Energy Finance
just 1% of current US retail investment in savings accounts, money markets and US
Treasuries would provide $90bn for clean energy crowdfunding, with 0.5% of the bond market
adding a further $190bn (BNEF, 2012). In developing countries, the World Bank has estimated
that ordinary people will have the potential to invest $96bn each year by 2025 (based on the
assumption that families with incomes of $10,000 p/a will save as well as consume), of which
over half will be from China (The World Bank, 2013). Whilst these figures should in no way be
interpreted as actual predictions of future investment levels from renewable energy
crowdfunding they do serve to make the basic point that the money is out there, if only a
mechanism can be found to access it. When exploring whether renewable crowdfunding could
be such a mechanism, two case studies provide examples of scalable solutions.
The context and conditions for growth
Expanding the pool of people willing to take more direct control of their money will be an
essential precondition for the scaling up of renewable energy crowdfunding. The case studies
above provide some anecdotal evidence that this is possible, but a broader and perhaps more
important issue is whether trends emerging in tandem with the internet’s integration into
society are fringe phenomena or early indicators of a more fundamental restructuring to come.
According to Harvard Business School Professor Shoshana Zuboff, new digital technologies
are impacting our sense of self and expectations about the world in fundamental ways. “We
have a new society of individuals” she says. “People are more experienced, have more
disposable income, more education, more information, leisure, connectedness, travel than at
any other time in human history. And because I feel a unique sense of self, I want to have
control over my own life, I want to make my own choices, I want to make a life which reflects
my uniqueness” (BBC, 2013).
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Such changes can be seen played out in business, where standardised products like music
albums have been overtaken by our ability to create personalised products online, and in
manufacturing, where innovations like 3D printing promise to revolutionise the level of
customisation that will be possible in the production of consumer goods. If this perspective
proves accurate and the mass production of the 20th century gives way to greater
personalisation in the 21st, then it is hard to see the world of finance avoiding a comparable
transformation of its own. New mechanisms like crowdfunding that are disintermediated,
personalised and ethical will be well poised to challenge the centralised and opaque structures
of old.
A further factor likely to affect the attractiveness of renewable crowdfunding investments is the
macroeconomic context for saving, and the range of savings products available to retail
investors. Ever since the 2007-08 financial crisis many countries have seen inflation exceed
base interest rates, which has in turn eroded the value of money kept in current and savings
accounts. People persist with this strategy in part because the mainstream financial services
industry has failed to provide suitable next-step options with better returns at relatively low
risk. All too often the choice for savers is perceived as being between cash or shares, yet the
risk and volatility of the stock markets means the latter is simply a step too far for many.
As long as this remains the case, there will be an opportunity for alternative savings products
to step into the gap, particularly those that offer relatively stable inflation-linked returns such
as renewable energy debentures. In the UK tax structures to encourage saving (ISAs) can be
seen as reflecting the choice savers face between cash and shares. Opening up these
structures to include crowdfunding investments would be one way to create a more level
playing field. This has already happened with Self Invested Pension Plans (SIPPs) in the UK,
and extending this to ISAs would help deliver the increasing number of willing investors
needed to scale up renewable energy crowdfunding.
Evolution of crowdfunding platforms
Crowdfunding platforms themselves also have work to do. Their pitch may be attractive in
terms of returns, stability and ethics but practical barriers to expanding the pool of investors
still need to be overcome. The clearest example (and frequent charge from critics of
crowdfunding) is the lack of liquidity. Capital markets are volatile and unsuitable places for
many retail investors but they at least provide an opportunity to turn assets into cash quickly
when needed. By contrast unlisted crowdfunding products cannot be traded on these markets
and so other mechanisms are needed to provide liquidity.
Abundance’s solution has been to set up an online bulletin board that allows renewable energy
debentures to be directly bought and sold between registered individuals. It is comparable to
E-Bay and is intended to enable people to efficiently trade previously hard-to-trade items,
creating a potentially disruptive alternative to traditional public markets. This has operated
effectively for over a year but many investors will require confidence that such mechanisms
are effective and here to stay before going ahead with an investment.
For renewable energy crowdfunding to raise capital in the quantities indicated by Bloomberg
and the World Bank, a much greater number of suitable projects will be required alongside an
increase in the number of willing investors. In theory, an economy on a low-carbon pathway
will provide plenty of relevant opportunities here, but approaches to energy system
decarbonisation vary between jurisdictions, and a focus on large top-down infrastructure
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rather than multiple smaller bottom-up projects could still mean this proves challenging in
practice. In the near future there will be limited capacity for crowdfunding platforms alone to
raise the hundreds of millions needed for large projects, so an expanded pipeline of community
and municipality sized projects will be needed.
An exception to this would be for developers of utility scale projects to team up with
crowdfunding platforms to raise part of the required debt directly from retail investors; an
arrangement that would signify a major step forward in the evolution of renewables
crowdfunding. In either case, the role of Government in establishing a financial framework that
provides predictable revenues is critical. In this sense, crowdfunding investors are no different
from other types of investors: asset financing will not materialise without enough certainty and
incentives in place.
New regulatory frameworks
The issue of regulating crowdfunding reflects the same inherent tension as regulating other
disruptive new business models. It is desirable where it creates markets, builds credibility and
protects against rogue elements, but if done badly it risks quashing the very innovation it seeks
to support. In crowdfunding’s main global markets regulatory frameworks are still very much
being established. Whether the right balance will be struck between different objectives is still
very much an open question.
In the US the key piece of federal legislation relating to crowdfunding is the 2012 JOBS Act,
which includes provisions to exempt crowdfunding from previous federal securities laws, in
turn enabling non-accredited investors to invest up to certain limits.1 Yet as of October 2014
these provision had still not been operationalised, leaving a patchwork of different rules across
the country as individual states have implemented their own exemptions and requirements. In
any case, the JOBS Act provisions are proving controversial. Some fear the federal
requirements will be too restrictive and costly to unleash the full potential of crowdfunding;
others are concerned consumer protection measures are insufficiently strong, particularly in
relation to equity crowdfunding.
In the European Union there is no EU-wide legislation specifically targeted at crowdfunding,
although the European Commission has outlined its intention to monitor progress and report
back on the need for further action in 2015 (European Commission, 2014). In the meantime,
a number of Member States are developing their own approaches to regulation, risking a
fragmented approach across the continent. In the UK a new framework came into force in
2014. Whereas previously some platforms were regulated by the Financial Conduct Authority
and others were not, now all platforms offering debt and equity crowdfunding must now comply
with standards relating to marketing, risks and capital reserves.
Retail investors buying ‘readily realisable securities’ (a category that includes renewable
energy debentures as well as mini-bonds and equity investments) must be either
professionally advised, certified as sophisticated, or confirm they will not invest more than 10%
of their net investible assets (FCA, 2014). France also adopted a new legal framework for
crowdfunding activities in 2014, to a generally positive reception from French platforms
(Dekker, 2014). The growth of crowdfunding and the scale it can achieve will depend on the
1
In the US a non-accredited investor is an investor who does not meet the net worth requirements for
an accredited investor under Securities & Exchange Commission regulation.
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effectiveness of these new regulatory regimes and the responsiveness of regulators to
changing conditions in the future.
From small acorns…
Renewable energy crowdfunding has come a long way in a short time. A new source of private
finance for projects has been created and tens of millions of pounds have already been raised.
The crowdfunding models used to do this provide new ways to engage communities and offer
new opportunities for individuals to take control of their finances.
For Abundance Generation, this was only the beginning of a vast number of opportunities that
crowdfunding could bring to renewable energy finance. Indeed, they had set their sights on
funding £500m of renewable energy projects by 2020, made possible by executing a proven
business model. Put simply, their model relied on financing renewable energy projects capable
of earning money for ordinary high street investors, who shared a positive reason to support
renewable energy companies.
Abundance fitted into this funding model by offering developers access to a potentially limitless
source of investors, taking a small percentage from the transaction fee, whilst providing a
customer aggregation mechanism for investors. For investors, they provided credit analysis
as well as a due diligence framework on the project developers they were funding, also taking
a small transaction fee based on a percentage of the financing they provided.
All of these transactions sat within an archaic and tightly controlled regulatory framework
designed to govern the traditional banking system. It was up to the Abundance team not only
to educate a two-sided market on viable crowdfunding mechanisms, but help to influence
regulatory bodies by proving they could offer a secure and transparent service.
Figure 4: Abundance business model and stakeholders
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Taking next steps
Going forward, the senior management team at Abundance faces important decisions about
how to manage the growth of its business. Should Abundance focus on remaining a niche
player in order to address the specific requirements of renewable energy projects in the UK?
Or should the team leverage its existing experience to create a more diverse asset investment
platform? Will the path to sustainable long-term growth for Abundance be found in
diversification beyond renewable energy, country expansion beyond the UK, or in entirely new
markets? In charting a vision for the company over the next 5-10 years, how will evolving
regulatory policy, technological innovation, and the threats posed by competing platforms
influence decisions to be taken by the company?
•
•
•
How will investors respond when a high-profile project fails to deliver?
Will regulators strike the right balance between consumer protection, innovation and
encouraging new sources of private finance?
Can crowdfunding platforms develop effective secondary markets and adapt to a much
larger scale of project?
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Appendices
Appendix 1: Abundance Management Team Profiles
Karl Harder is one of three Managing Directors and Founders
of Abundance Generation, the first regulated crowdfunding
platform in the EU and the world’s first renewable energy
crowdfunding platform. Karl previously co-founded the
environmental business Green Your Office.
Bruce Davis is the second Managing Director and Founder of
Abundance Generation. He is an ethnographer, Visiting
Research Fellow at the Bauman Institute and Fellow of the
Finance Innovation Lab. He previously co-founded peer-topeer lending service, Zopa.
Louise Wilson is the third Managing Director and Founder of
Abundance Generation. She was formerly Head of Equity
Capital Markets at UBS Investment Bank and has been voted
among the 100 most influential women in the City of London.
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Appendix 2: Range of estimates for investments in £billion (2011-2012 prices)
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Appendix 3: Growth of crowdfunding platforms by category (2007-2011)
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Appendix 4: The Online Lending Ecosystem
Source: Orchard Platform
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References
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21st September 2014]
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Imperial College London
Appendix 1:
Source: Access Analytics
Imperial College Business School
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United Kingdom
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