The AltFi Frontline: A War Over Words

The Alternative Finance revolution remains in full swing. But as with any major upheaval, questions relating to direction and definitions are surfacing.

a man in a suit smiling

Speaking to the various platforms allows me some insight into the queries and gripes that may well become important and contentious issues – and I will explore those issues in this this column. I’ll also be considering the following points:

  • The importance of face-to-face interaction in alternative finance.

  • The increasing diversity of crowdfunding aggregators.

A War Over Words

“It is odd how learned persons fail to see that new terms and definitions are apt to mean new doubts and litigation.” – Frederick Pollock

The terminology of this industry is already a confusing beast.

“Alternative Finance” is defined by many as online finance platforms that have a peer-to-peer element. Examples include crowdfunding, p2p lending and invoice funding platforms. However, to some the meaning of the phrase should also encompass any non-traditional source of finance – regardless of whether that source contains a p2p element. Examples of non-p2p companies currently considered within the alternative finance bracket are pensionledfunding.com and Fleximize.

Perhaps because of the blurred distinction above, some instead refer to online, p2p sites as “Crowdfunding” platforms. The difficulty here is that others see crowdfunding as specifically relating to donation, reward or equity-based investment in startup businesses, with debt-based p2p lending and invoice funding as individual categories unto themselves. Within the p2p space, some question how distinct p2p consumer lending and p2p business lending truly are.

How important is it to settle upon answers to these questions?

Firstly, it will benefit the industry’s supporting ecosystem to have clear definitions of each sub-sector of the space, and that in turn benefits the industry. One of the major challenges for alternative finance platforms is raising awareness and trust for the sector throughout the country (and indeed the world over). The alternative finance ecosystem can help to accomplish that. If the media, the statisticians, the aggregators, lawyers, advisors and investors are all speaking the same language – that will only help to bolster the confidence of all those that they direct to the industry. In spite of the massive progress and growth throughout the space, skepticism remains rife among those who still know little about the various forms of alternative finance. It will not ease their wariness to meet with an industry teeming with muddled jargon. 

Finally, a lack of established terms inevitably leads to the pointing of fingers. A few times now I’ve witnessed platforms, without naming any names, questioning the makeup of a rival platform, i.e. are they really p2p? Should that platform be considered an alternative finance provider? Etc. That sort of internal feuding will again serve only to put potential borrowers, lenders, investors and entrepreneurs off of the industry as a whole. For now, the best course of action is for the many and various platforms to continue to collaborate in building a mainstream and popular alternative finance sector – and standardized definitions will help with that. 

Face-to-Face AltFinance?

“One of the best parts of One Spark is the real-world feedback. You are out there talking to the public every day during the event and these are the people to whom you will be selling. For them to be able to hold your product and be able to tell you what they like and don’t like was invaluable.” – Pete Cochrane, Co-Founder of Aurora

Last weekend saw the second coming of the crowdfunding festival – One Spark – take over the streets of downtown Jacksonville. Hundreds of project creators pitched their ideas to an audience of 235,000 people. One Spark in essence produces a live version of the crowdfunding process. It got me thinking about whether face-to-face interaction has a role to play within an industry famed for the digital nature of its transactions. A yearly spectacle like One Spark is great for raising awareness of both entrepreneurial projects and of the crowdfunding space itself, but physical interaction can also be a distinguishing element in the approach of a platform.

Take ThinCats, for example. This peer-to-business lending platform’s due diligence goes beyond the rigorous online checks that are typical within the space – they also send representatives to meet every business that comes to the platform seeking a loan. A new entrant to the UK crowdfunding space – CrowdShed – is developing a physical space named “The Shed”, as part of the platform’s holistic approach. Based in London, The Shed is a place for entrepreneurs to work, get support, hold meetings and promote their project. The Shed will also play host to various inspirational talks from business and crowdfunding experts. The equity crowdfunding platform CrowdBnk hosts quarterly “Meet the Entrepreneurs” evenings. These give investors the chance to talk with some of the entrepreneurs who are raising money via the platform, and to sample the product that these entrepreneurs have created.

Physical interaction can generally be considered a unique feature among platforms at present, but that may not always be the case. I suspect an increasing number of platforms will begin to supplement their online service with a face-to-face element.

Who’s Going to Claim the One-Stop-Shop Crown?

As more sites are launched, aggregators will play a more important role than ever before. Similar in nature to travel and hotel site aggregators, they will become the standard since it will be nearly impossible for the average surfer to keep up with the deluge of new projects and sites being started.” CrowdFundFusion Founder Jon Mushey 

I write almost as much news about emerging aggregators as I do about new platforms. Every new site that springs up does so prominently flaunting a unique feature, and each seems to have its sights fixed firmly upon the title of one-stop-shop for the crowdfunding industry.

The fervent pursuit of that title represents a general recognition of the fact that the Alternative Finance movement is now gaining real scale. There is an opportunity for a singular site to pool various products, services and/or projects from the industry into one hyper-intuitive, highly efficient portal. Users will thus be able to peruse the offerings of all the platforms at once, and then be funneled through to the site which best suits their requirements. But is that the extent of what an aggregator can offer?

Although there are a fair number of them out there, there is as yet no definitive one-stop-shop for alternative finance. In general, each new entrant adds a new and innovative twist to what may be called the typical aggregating model – described above. Let’s take a look at a few of the existing claims to the throne:

  • CF4ALL


    CrowdFunding4All (CF4ALL.com) uses Crowd-Powered Project Search to help you easily find, follow, and fund the projects that best match your needs and interests. More than a search engine or directory, CF4ALL combines the largest database of crowdfunding projects (over 38,000 campaigns) with CrowdCredits (what CF4ALL calls the "Social Currency of Crowdfunding"), and a rotating display of trending projects. While they have been focused on Rewards and Donation-based Crowdfunding in the U.S. and Canada, CF4ALL is expanding into Australia and the UK, and will soon be adding Debt and Equity-Based Crowdfunding to its mix.” 

  • Alternative Business Funding

    : “



    we provide a free and easy way for SMEs to find alternative business funding — especially those with an interest in the non-bank business funding sector. We are focused on making it simple for time-constrained business-owners to find the right funder to contact, with only a few simple questions and no personal contact information required to use the site. The unique collaboration brings together the market-leaders for the main forms of alternative business funding for SME finance, so all types of funding from short to long-term loans / debt / equity or self-investing are covered. More than just a web portal,


    is the start of a campaign to create a more collaborative environment for business funding aimed at simplifying SME owners’ search for finance to help support their businesses and also a place for the major Banks to redirect customers.”

  • UP Investments


    “There’s nothing like it anywhere in the world. UP is the crowdfunding supermarket – we aggregate crowdfunding opportunities, but we also act as a broker and portfolio management service.”

    – Founder and MD James Tuckett

  • CrowdsUnite


    "What I'm trying to become is a Yelp for the crowdfunding industry, a resource that anybody can use.

    It's such a huge industry evolving right now. My goal is to be a resource for people to find these experts and professionals and platforms."

    – Founder Alex Feldman

  • CrowdFundFusion

    : “

    What really makes CrowdFundFusion special is that we group and organize projects into our own distinct categories, sub-categories and types that make

    browsing projects intuitive and simple. We also let visitors search via a combination of the two. A visitor can search by either main/sub category or 'Type' or a combination of the two. For example, a visitor can browse by Innovative/Tech (Main Category/Sub Category) --> Ending (the Type). Visitors can also suggest the next site to add to CrowdFundFusion or vote on submissions made by others. We want to show the projects from sites that people want.

    Project creators can also get their project featured on our home page and access resources to help them plan and run their projects.”

    – Founder Jon Mushey

Those are just five brief examples, offered to give you an idea of the variety that’s out there. What is clear is that the best aggregators will not simply present users with a mishmash of products and projects. Going forward, it will be fascinating to see which of the structural quirks championed by the above aggregators will prove to be the most effective. 

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