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Fulham, Portsmouth, Parma: How Vialli & I are revolutionising grassroots football funding

FOUR years ago, I attended a fascinating talk at the London Business School by Gianluca Vialli, European Cup winner, former Chelsea manager and a boyhood hero of mine. He discussed the growing disengagement between football clubs and their fans - how clubs treat their sponsors as partners but their fans as mere customers.

I approached him afterwards to continue the conversation because I was wrestling with the same issue from a different standpoint. Working on sports financing projects at a large investment bank, I found that institutions were reluctant to invest in even the biggest football clubs. They worried about the uncertainty of future performance and revenue – the threat of relegation or the star striker breaking a leg – rather than looking at the size of a club's global fanbase and seeing it as an opportunity to unlock capital.

After many long discussions around Luca's kitchen table, we developed the concept of Tifosy (the word means 'fans' in Italian), the world's first FanFunding sports platform.

Our mission is to allow ordinary fans to become investors in the clubs they believe in. Investing in football clubs shouldn't be left only to millionaires and billionaires. Bringing clubs and their fans closer together will strengthen the bond between them. It will allow clubs to invest for the future, improving their infrastructure and making them less reliant on overseas shareholders to inject capital.

Even the smallest clubs have passionate fans, locally and internationally, and are connected to them digitally. They would love the chance to invest in sports, but there is currently no way to do so for the average fan or investor.

Millions of engaged supporters, all over the world, one click away, follow the club's every move and every new piece of content. The 30 most followed clubs on Facebook have more than 720 million followers and more than 1 billion across all social channels.

For clubs, this is a massive opportunity and an untapped, digital source of financing. Even your average League Two club will have up to 10 times more people connected to them online than physically going to the stadium on a match day. For larger clubs, multiply that number by 1000. All these millions of people are digitally connected, want to engage with their club and have their voices heard.

That is where Fanfunding - our version of Crowdfunding - comes in. From a standing start seven years ago, Crowdfunding has become a $432bn phenomenon, overtaking venture capital globally as a source of financing.

To prove our concept, we launched a pilot project in 2014 with Portsmouth FC. It was a rewards campaign, giving fans unique experiences and club-related incentives, in return for their donations. It was a phenomenal success – in just 62 days we raised £270,000 from fans in 35 countries. The club invested in two new academy pitches at the training ground.

A year later, we launched a campaign for the Italian club, Parma, beating the €150,000 target by raising €171,000 from fans in 42 countries. Further campaigns with EFL clubs Bradford City and Oldham Athletic raised a combined total of nearly £200,000 to fund stadium improvements. We worked with Fulham FC, launching a rewards campaign to fund a statue of World Cup legend George Cohen and community dementia programmes, raising a total of £231,000.

Seeing the strong international demand from fans to invest in their clubs, we successfully applied for a licence from the Financial Conduct Authority, allowing us to run financial crowdfunding campaigns.

In August 2017, we launched English football's first mini-bond, under our proprietary FCA licence, raising £600,000 for League Two club Stevenage FC in just six weeks. More than 200 supporters took part, buying five-year bonds paying 4% interest or 8% in club credit. The Standing Shoulder to Shoulder campaign will allow the club to build a new all-seater North Stand, matching the amount raised by supporters with a Football Foundation grant.

The campaign was successful because Stevenage's long-standing chairman, Phil Wallace, is trusted by the fans. They understood what he was trying to do and believed in the project. That is a pre-requisite for any FanFunding project – we will only work with owners who have the interests of the club and its fans at heart and we have not been afraid to walk away from projects where there hasn't been the case.

Any investment carries an element of risk and it's important that is clearly spelled out to fans. We have created a simple, easy-to-use digital platform which is transparent and efficient. Fans can see where their money is going and how it will be used; clubs benefit from a cheaper, more flexible way of financing their operations while deepening their engagement with supporters.

So far, we have now worked with 15 clubs in England and Italy, raising more than £1m. Even the smallest club can count on passionate fans all over the world. By tapping into this global fanbase, they will no longer be solely dependent on traditional sources of revenue: ticketing; broadcasting; commercial activities; sponsorship. If a club makes its fanbase a long-term partner, it has a real alternative.

There are many ways that sports clubs can use Fanfunding – for example, we have been working with Shrewsbury Town to raise money for the first Safe Standing area in English football, a campaign that has attracted nearly 1,000 fans and organisations, breaking down the barriers between clubs.

Now, the time is right to scale up and we plan to work with leading Premier League clubs – as well as leading cricket and rugby clubs - launching debt and share issue campaigns on a much larger scale. We recently launched our own £1m equity raise on the Tifosy platform to accelerate our strategic growth and give fans all over the world the chance to become sports investors.

Fanfunding will transform the way fans interact with their clubs, unleashing their passion and liberating clubs from their reliance on traditional sources of finance. This is a sports revolution in the making.

Fausto Zanetton is founder and CEO of Tifosy

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Fausto Zanetton

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