C-I Factor

The key objective of the C-I Factor project is to realize new financial facilities for the Creative Industries by preparing new instruments and by addressing the perceived challenges and risks of investing in Creative Industries businesses.

Description of the project - Aims and objectives

The C-I Factor project will explore and promote novel financial resources emerging in Europe that are relevant to the creative industries in order to support them to exploit its full potential.

To that end, C-I Factor will create a new platform to leverage the financial support of the EIB/EIF and other public and private funding sources to recognize crowd-funding and creative guarantee funds as legitimate and reliable early stage financing systems to be used in coordination with investors, banks and other European Institutions. This would include establishing a co-investment mechanism to provide investment alongside funding deals in CI businesses that received initial crowd funding support in their early growth phase.

Creative Industries (CI) combine a range of activities that generate and exploit knowledge, technologies and human creativity to provide value. They represent an extremely dynamic sector and include highly innovative companies with great growth potential. However, due to several identified factors, accessing finance is a key challenge for companies in this sector.

Activities

The C-I Factor’s main activities include:

  1. Map investors’ understanding and motivation towards investing in creative industries.
  2. Create a Creative Industries Access to Finance Advisory Board. This body will bring together players that are involved in different aspects of access to finance (investment, training, policy & regulation) at different levels (local, regional and European levels) and involved in both traditional and innovative access to finance schemes together with the practitioners from creative industry.
  3. Examine the possibilities to use innovative funding options such as crowd-funding and guarantee funds with a view to:
    • Establish and pilot a dedicated Guarantee Scheme for CI businesses offering access to more significant bank loans, identifying a specific Bank (Triodos) to pilot their Guarantee Fund into a new pan European Guarantee scheme.
    • Establish a consolidated model to use Crowd Funding as a recognized source of early stage finance, for CI businesses supporting pre proof of concept and early market validation.
  4. Develop a new investment-readiness serious game to be made available via the How to Grow platform (www.howtogrow.eu). The game will assist start-up companies and entrepreneurs in the process of preparing their businesses (and/or business plans) to be presented to potential investors or other financial actors.

Actors involved

Communication and dissemination:

  • How to Grow platform: Is a European platform for creative industries which combines several functionalities and tools, namely access to financial instruments such as crowd-investment and funding platforms, access to grants and funds, a network of mentors and live events aimed at professionals in the creative industries.
  • Creative SMEs network: A Dutch network that supports 1500 creative SMEs on a yearly basis managed by Cuultur-Ondernemen and Triodos Bank.
  • Dutch Platform for Creative Industries: Associated partner from Cultuur-Ondernemen.
  • Arts & Business Network: Partner from Cultuur-Ondernemen.
  • Union Wallonne des Entreprises: St.art is member.
  • Agence Bruxelloise pour l'Entreprise: St.art partner.
  • London Business Angels: Sister company from ACI receives over 1000 business plans per year (50% from CI businesses.
  • Clusters of CI businesses in the UK: Institutional and business partners from ACI include London College of Fashion, Royal College of Art, Design London, National Film Council, Tech City Digital Media Cluster, Mobile Monday, KTN Creative Industries, KTN Digital Media, Serious Games Institute.

Financial actors:

  • Triodos Bank
  • Investors for Creative Business Fund: Dutch Guarantee Fund
  • Reseau WABAN Business Angels Wallonie/Nord de la France
  • Reseau BE Angels Bruxelles and Louvain La Neuve
  • Belgium Venture Capital & Private Equity Association (BVA)
  • Societe Wallonne de Financement et de Garantie des Petites et Moyennes Entreprises (SOWALFIN)
  • Fonds de Garantie Bruxellois
  • La Societe Regionale d.Investissement Bruxelloise
  • London Business Angels
  • London Seed Capital and Seraphim
  • BBAA UK Trade Body (For angel and early stage investing)
  • EBAN (European Trade Body for Angel Investors)
  • Capital for Enterprise Ltd
  • UK Innovation Fund
  • Angel Co-Investment Fund
  • British Banking Association
  • Lloyds: Operating an awareness raising programme with all the relationship managers across UK to encourage SMEs to attract loans through Bank Guarantee Schemes: Partner from ACI, will be invited to integrate the investment network foreseen for the pilot actions.
  • Voordekunst: Crowd-funding platform aimed at artistic projects.

Expected outcomes and impacts

The project objectives include:

  1. Engage 500 CI Businesses in the use of interactive tool and increase their investment readiness.
  2. Select 50 promising CI businesses across Europe and successfully attract investment as a result of increased investment readiness and investor attractiveness.
  3. Generate at least €15m investment/finance accessed by CI resulting from this increased investment readiness through direct interface with Angels, VCs; seed funds and banks.
  4. Generate at least €100,000 additional finance accessed through crowd funding among SMEs involved in the pilot crowd funding action.
  5. Connect 50 of the most successful crowd-funded projects/companies with a network business angels, banks or other financial institutions.
  6. Generate access to at least €25m from finance sources leveraged alongside crowd funding through these crowd funding projects.
  7. Facilitate access of 50 creative companies/ projects that have access accessed Triodos Bank loan successfully.
  8. Contribute to the full implementation of a European wide guarantee fund for creative industries as foreseen in Creative Europe, the new EU programme for cultural and creative industries.
  9. Set up a network of investors and financial institutions interested in being linked with creative industries, namely with successful crowd-funded projects.

Quotation

"Europe has strong creative sector because of its rich cultural heritage and the ingenuity of its creative class. C-I Factor is channeling novel funding sources to unleash the growth potential of this sector", Joao Mena de Matos, CEO European Design Centre.