Credit financing opens the door to a better Pohoda and protects the festival’s independence, says founder


Credit financing opens the door to a better Pohoda and protects the festival’s independence, says founder

Pohoda Festival shapes not only the world of music and art, but also now the world of business and investment, as it becomes one of the first Slovak companies to use a new form of financing brought to Slovakia by Crowdberry. Credit (debt) crowdfunding will pave the way for further development of the festival, while maintaining its authenticity and independence. This marks a significant milestone for the festival as well as the transparency of the investment environment in Slovakia.

The collaboration between Michal Kaščák, founder of Slovakia's most famous music and arts festival, and the Crowdberry investment platform is a natural result of mutual convergence since the appearance at Pohoda 2018 of an Ecocapsule – a self-sustainable microhome developed by a crowdfunded company. After winning the Best European Medium Festival award in 2023 following a difficult period during the Covid pandemic, the festival is pressing ahead with designs to improve and expand. Crowdberry will accompany Pohoda on its journey as a strategic partner.

“Considering the situation that we found ourselves in during the post-pandemic years, we were wondering how we were going to continue with Pohoda. Although we had several offers to buy the festival, we decided to avoid the classic route and looked for an investment approach that would in no way compromise our control over the festival, the quality of the services and its very underlying philosophy. That is why we put our trust in debt financing, which turned out to be ideal for us,” says Kaščák.

An old-new approach to investing

Having obtained a European ECSP license, Crowdberry this year introduced a new investment product, private credit (debt) financing, which complements the time-tested “growth equity” investment opportunities.

This debt-secured investment approach has proven ideal for Pohoda, as it provides both the stability for investors and retention of control for the founders. This allows the festival to maintain its independence and creative control over operations and programming. At the same time, fixed repayment and interest terms allow the festival to plan its cash flows in detail and manage its long-term commitments with precision.

What is credit financing and how you can become an investor

Crowdfunding is a debt product in the form of an investor credit (loan) for companies or real estate, equivalent to bank financing. In this type of financing, the investor essentially becomes a ‘banker’ to whom interest income is paid regularly according to pre-defined rules and timetable. Both individuals and companies can invest, and interest is paid in a similar way to banks. Secured credit investing is also one of the less risky investments, which should appeal to more conservative investors.

In the case of Pohoda Festival, the initial minimum capital investment is set at €3,000 with a 9.7% annual interest yield. The payout mechanism is set semi-annually with principal repayment over 3 years. The investor loan is secured by receivables, the company itself and the festival brand.

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“Crowdberry acts as an investor ‘umbrella’ so that Michal Kaščák doesn't have to interact with a hundred different individual investors. We act as an administrative credit agent which makes sure that each investor receives the interest and all the necessary information about the company,” says Dano Gašpar, managing partner Crowdberry, about the new product.

Investor interest in Pohoda

Since January 2024, Pohoda Festival has gained the attention of hundreds of investors, many of whom decided to finance this lovebrand’s growth and take advantage of a trailblazing investment opportunity.

How does credit (debt) financing work?

With credit financing, the investment platform doesn’t interfere with the festival’s operations, but does require transparency on the part of the company and adherence to so-called “financial hygiene” habits throughout the investment period. Crowdberry systematically reviews all data and parameters that might be overlooked by banks or investors.

It also performs a full risk analysis, assessing the firm’s credit and security “scores”. Based on the data obtained, Crowdberry determines the level of risk and sets an acceptable funding amount. However, the responsibility for the final results lies with the funded company itself.

Each investor has full access to the financial analysis and economic profile of the festival, including events during the pandemic and planned future measures. Crowdberry will also provide investors with regular quarterly updates on the progress of Pohoda’s business.

Want to know more about Crowdfunding DNA and Pohoda Festival's collaboration with Crowdberry? Michal Kaščák and Dano Gašpar discuss matters in a joint interview.
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Crowdberry's mission is to democratise investing and enable people to transparently fund companies that matter to them and will create value. Currently, Crowdberry's portfolio includes 35 Slovak and Czech companies focused on healthcare, biotechnology, IT, e-commerce, lifestyle and real estate.

Article source: Diana Michaličová /