Crowdfunding – whether donation- or loans-based – is now really taking off. Vincent Ricordeau, founder of the first French crowdfunding platform KissKissBankBank, describes how this phenomenon has evolved.

“Crowdfunding enables millions of euros to be injected into the real economy”

L'Atelier : When did you launch KissKissBankBank and what inspired you to do so at the time ?

Vincent Ricordeau:  : We launched KissKissBankBank in 2010, but we had already started to think about the project back in 2007, and in 2008 we gave up our jobs in order to devote all our time to it. The world of crowdfunding simply did not exist then, so there was no way we could have imagined that it would be so popular today. The original idea came to us when we saw how popular Myspace [a US social networking service with a strong music emphasis] had become. We were all great fans of the independent business culture and we realised that there was a lot more going on than we had previously thought, that the Internet provided a fantastic way for musicians to get themselves known. Then we thought about the next step. If the Internet could enable independent musicians to make a name for themselves, why couldn’t it also help them to obtain financing? That’s how KissKissBankBank got started: we wanted to finance arts and culture ventures in a different way. 

42,078 projects launched - 12,309 projects submitted for financing - 731 ongoing projects - 489,478 KissBankers - €26,296,734 pledged

KissKissBankBank statistics since its launch in 2010. © KissKissBankBank

L'Atelier : You then set up a second crowdfunding platform

Vincent Ricordeau: Well we saw very quickly that this way of financing people from the arts and culture world by using the social networks to appeal to the wider community worked very well, and thought that it could be suitable for any kind of creative initiative. So we started to accept, for example, science, technology and also humanitarian projects. KissKissBankBank has become a crowdfunding platform for culturally or technologically innovative initiatives. Then we launched a second platform, Hello Merci, for micro-firms. When our politicians saw that the system was working, they gradually began to take an interest. Many companies have difficulty raising funds, and crowdfunding enables millions of euros to be injected into the real economy. Now the policymakers have created a legal framework for it.

L'Atelier : What does it cover?

Vincent Ricordeau: Well, until very recently, only banks were entitled to lend money and charge interest. The people who pledge funds on the KissKissBankBank and Hello Merci platforms don’t earn any money. They make donations to finance projects that matter to them. The new French law on crowdfunding, signed into law by [Minister of the Economy, Industry and Digital Data] Emmanuel Macron last year, and which came into force in October, ends the banks’ monopoly on charging interest and allows private individuals to lend to companies and earn a return. The next stage will be to allow company-to-company lending. This is part of the Macron Bill which is currently being debated in the French Parliament.

2010: out of the 58 projects submitted, 34% of all funding targets were reached

2014: out of the 6,146 projects submitted, 56% of all funding targets were reached

The number of projects achieving their fundraising targets on KissKissBankBank has greatly increased since the site started up, as has the number of projects submitted © KissKissBankBank

L'Atelier : This widening of scope from a regulatory aspect has now enabled you to launch a third crowdfunding platform...

Vincent Ricordeau: Yes, on 18 November last year we launched Lendopolis, which enables small and medium-sized firms to solicit funds from Internet users. Unlike the other two platforms, people pledging funds on Lendopolis do obtain a financial return. Loans pay between 5% and 12% interest per year. So far it has been very successful; out of the fifteen projects submitted, nine reached their funding targets within a week.

L'Atelier : So crowdfunding is no longer only donation-based, it has become a way of earning money. Aren't you afraid that in doing so it will, in a way, "lose its soul"?

Vincent Ricordeau: Well, first and foremost we must remain true to the crowdfunding DNA. This means devoting time to it, creating a climate of trust. Experience shows that collective intelligence is more powerful than that of individual experts. In the UK, the default rate on crowdfunding platforms is actually lower than the figure for financial institutions! 

By Guillaume Renouard