Media for equity is an alternative investment model which has the main goal of diversifying the revenues stream of a company in a more rational way. Media companies act generally in two different ways: they can either give an unsold advertising space in their publications or a real advertising space equal to a pure cash campaign. The idea is to help the start-up companies increase their metrics in a very short period of time; this way, instead of spending money on online marketing, they can use their financial resources to improve other aspects of their businesses. The companies receive advertising space instead of cash for their stock. Media for equity funding fills a gap in funding which exists after a new company has spent its initial seed money, and hasn't yet grown enough to attract large venture capitalists. The company uses the advertising to increase its customer base, thereby increasing the value of its stock. The start-up company makes money directly, and the media company can sell the stock at a profit. This method of funding new and small companies has been commonly used in Europe since the late 1990s. Some examples are the Stroeer company, which specializes in billboards and street furniture, the German television group ProSiebenSat.1 and the Italian one of Mediaset through the appointed vehicle Ad4Ventures. Tens of millions of Euros of media have been provided to startups in Germany using this investment model, for example to Zalando, an online shoe retailer. A similar but more complex model is the media for equity fund. In this model, several media companies together commit advertising space to a fund intermediary. The fund exchanges this media for shares in one or more high-growth companies. These funds are called cross-media funds, because they can provide different types of media to a single high-growth company. Current media for equity funds who offer leading services are Addinvest.se, Aggregate Media Funds in Sweden, VOC Media Funds, L'Express Ventures, 5M Ventures in France and GMPVC German Media Pool in Germany. Media for equity funding can be found in many areas around the world, for example in India through the Times Group’s fund Brand Capital, PE Global Media Fund and of Berlin, 5M Ventures of Paris, Hagan Capital Group of Atlanta, Leverate Media of Berlin and in Warsaw.
