Heini Staudinger is hardly a household name in Europe. But the Austrian entrepreneur has been making an awful lot of noise recently about what he regards as the abuse of the Austrian banking industry’s control of the market. Not shy of hyperbole, he thundered recently on his website that "the monopoly of the banks is a danger to our democracy".
At issue is Staudinger’s recourse to friends, family and business connections as a source of funding. Over a period of several years, he is said to have raised about €3 million in this way to fund his shoe-manufacturing business, GEA.
Staudinger calls this crowdfunding. The Austrian Financial Market Authority (FMA) calls it banking. And where there’s a bank, it says, there must be a banking licence. The legal case is still pending, and Staudinger has reportedly said that he is prepared to go to prison to defend his right to raise money from consenting adults.
The authorities, which regard his funding strategy as the thin end of the wedge, believe that the hornets’ nest Staudinger has stirred up has little to do with democracy and everything to do with self-promotion. The Austrian press has described the Staudinger case as the tip of the iceberg, reporting that several other Austrian SMEs are at loggerheads with the authorities about their private funding strategies.