Barcamp review: Access to smart finance

This session was hosted by Søren Würtz, chief consultant from our Danish partner CKO, the Danish Centre for Culture and Experience Economy. CKO’s work is centered around building frameworks for creative industries and entrepreneurs. At the moment, the topic of access to finance is one of their foci, as they have just been conducting a survey measuring the needs of creative industries vs. other industries in Denmark in order to answer the question: “How can we build an ecosystem in a regional area that fosters good investments?”

A key finding showed that creative industries carried significant ambitions for commercial growth – in this aspect, they were most alike to other industries.
Based on this survey and its results, Søren Würtz set out to discuss the questions: What is smart financing for the creative industries? What is stupid financing for the creative industries?

The theses and major points for discussion of the session were:

  • Ambitions for commercial growth:

This point was challenged by some participants. First, because the study did not take into account companies with less than two employees, freelancers and artists.

Jörn Krug who is a coach for creative entrepreneurs in the region of Brandenburg: “My experience proves both the myth that the creative industry is not interested in growth and the opposite, so I’m surprised that the difference shown by the survey is so small. This shows that the business development components are similar in all industries.”

  • Use of classical analysis tools for success measuring:

Classical investors use the 3-year-ladder, whereas in the creative industries it makes more sense to use the leap metaphor: development 1 step at a time, testing in between phases, and a close relationship with the investor – essentially learning by doing.

In Søren Würtz opinion “the typical 3-year ladder-models doesn’t correspond to the pace of the market, they can’t compete with new developments or miss them completely. Instead, investors and creative industries alike should become experts in change, they should focus on short-term strategies and step-by-step scaling!”

  • Need for immaterial assets, much higher within creative industries than others.


(Source: CKO (2013) Access to smart finance, study and presentation for C2C, May 2013)

Examples:

In groups, the participants worked on the tasks 1) create a map of the investment ecosystem and 2) to develop a strategy for region x.

1) Create a map of the investment ecosystem

  • creatives in the center of the investment ecosystem as the most important aspect
  • creatives should reflect on whether they really need an investor and if yes, what kind, as investments can also be immaterial.
  • Investors should aquire more knowledge of the market, support life-cycle growth models and reflect on their own mindset, as investment gains can also be immaterial.

 

2) Develop a strategy for the region X!

Key questions:

  1. What are the elements of the ecosystem?

  2. How can we create good meeting places?

  3. How can we put new actors into meeting places?

  4. Why are banks always the main go-to actor when it comes to financing? What about venture capital, crowdfunding, private funding?

 

The session concluded that in order to improve the investment system for the creative industries
We need to change the cultural mindset: the intellectual property is unique, not the money involved.
We need to change the paradigm of needs/communication.
We need to help creatives develop business sense.
We need to mix financing sources.
We need to develop small scale financing/crowdfunding as business strategy.
We need to develop incentives and models for role models/ambassadors.
We need to focus also on mentors, not just investors.