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financing offers both opportunities and difficulties.

Of the initiatives to tackle this issue in the UK, of special

interest one can point to the establishment of AIM, or

Alternative Investment Market of the London Stock

Exchange. Targeting firms without size to access the

traditional market, it offers differentiating conditions

such as: i) regulation adapted to the realities of SME

without letting investor protection go off rail


; ii) a

global investor base and iii) access to a network of

lawyers, accountants, brokers, etc, providing support

to companies that have decided to join AIM. However,

even if AIM is still the largest specific market for SME

public equities, increasing disinvestment perspectives

for venture capitalists, the effects of the global financial

crisis and its aftermath have not gone unnoted to AIM

participants, as can be seen by the diminished issuances,

follow-ups and money raised in recent years



Other initiatives worth mentioning include Angel

CoFund, StartUp Loans, Enterprise Finance Guarantee

and Business Finance Partnership; all of which have

in common not only names that hint at their target

approach or investor base, but also the fact that

they are overseen by a single institution, the British

Business Bank, set up in 2012 as an answer to the

need to consolidate and seek synergistic outcomes

for the different programs, acting as a one-stop shop.

This development-like bank focus on providing funds

to innovative partners whereby public money will be

multiplied by private’s. In this manner, the bank seeks at

the same tim Via investments through BBB, where the

bank would provide the remaining funds for applicants

in cases where the first 90% of the credit requested

had been granted by private individual lenders. e to

foster the supply of finance to small business and start-

ups, thus creating a deeper financial market with more

options and suppliers while minimizing the impact on

the fiscal budget, and to build confidence and awareness

on these companies regarding the financial markets as

an alternative and reliable source of funds.

Efforts in this regardhavebeen conducted inBrazil mainly

by the investment banking arm of the development

bank BNDES, through: i) allocation in venture capital,

private equity or mezzanine finance managers, focusing

mainly in IT services growth, education, health and

infrastructure; ii) programs directly supporting IPOs of

medium sized companies; or iii) via its Criatec initiative,

whereby it provides capital to a family of privately

managed funds targeting seed and start-up investments


For instance, admission criteria is naturally more flexible,

without a required volume of market cap, free float, and commercial

operational historic


For the most up-to-date statistics, please check at: http://

in innovative businesses


. Though these efforts highlight

BNDES’s role in supporting venture capital in Brazil,

they have experienced varying degrees of success at

attracting private capital to multiply public funds and

promoting SME alternative financing.


Regulatingandpromotingcollective investment

Crowdlending, equity crowdfunding, peer-too-peer

lending (p2p), mini-bonds, angel syndicates, start-up

incubators. These names, as is often the case in the

world of innovative finance, bring both dazzle and

apprehension. Indeed, there have been cases around

the globe in the segment more broadly termed collective

investment in which platforms showcased stellar growth

rates only matched by their rapid fall to disgrace. This

highlights the need for public support in the form of

discussing and formulating regulation to protect the

interests of private investors and stakeholders, while

paying close attention to entrepreneurial finance

challenges in the age of collaborative economy, and

balancing advantages offered and risks posed by new

technologies. This, rather than simply a one-step

regulatory framework, should be an ongoing process,

as this young industry consolidates. Also, traditional

players can benefit both directly and indirectly with as

successful cases mount.

Turning to specific cases seen in the UK, several institu-

tions noted initiatives of Funding Circle (FC), one of the

leading p2p (aka crowdlending or debt-based crow-

dfunding) platforms in Europe, in obtaining synergies

with both public


and private players. The key innova-

tion was the Santander deal, through which, in case a

micro or small enterprise loan application was denied

credit, the bank would commit itself to refer FC as

funding alternative. While later a similar deal was an-

nounced with RBS, two further points are worth noting.

First, the deal was basically an anticipation of a new

“bank referral legislation”


, which institutes that tradi-

tional banks will be obliged to offer credit-denied busi-

ness a referral to a designated, online finance platform.


There have been three Criatec funds since 2007, also pro-

viding start-ups with managerial and strategic support. Similar, though

smaller and directly conducted efforts, have also been conducted in

start-up financing by SEBRAE. Though such public funding and guidan-

ce initiatives are obviously welcomed, one could argue that combining

them under the umbrella of a single institution could have synergistic

results, as it has been the goal with the BBB model in the UK.


Via investments through BBB, where the bank would pro-

vide the remaining funds for applicants in cases where the first 90% of

the credit requested had been granted by private individual lenders.


First aired in 2013 and later called Bank Referral Scheme

but not fully implemented nor enforced at the writing of this article,

and estimated by the

portal to be

able to reach over 100,000 small businesses that could get over 2 bil-

lion pounds in loans additional to the amount they would get without

the scheme in place.