A public framework in which citizens direct their own capital into early-stage innovation. The state guarantees the procedure, not the outcome.
CIVINCO makes household capital investable in early-stage innovation. Under conditions of transparency, limited risk and mediated complexity.
CIVINCO is
a publicly accountable framework for citizen investorship. Private households decide for themselves which early ventures they invest in, each with a micro-investment. A public operator runs the procedure; an independent Expert Advisory Committee (EAC) safeguards the quality of information.1
CIVINCO is not
- a private intermediary earning commissions
- a return product with promises
- a fund, public or private: no one decides on citizens’ behalf
- a programme that distributes public money
Procedure without selection
The state makes citizen investment publicly traceable and accountable. It does not pick winners.
Mediation before choice
Because people avoid the unfamiliar, the complexity of early ventures is translated into a comparable form before anyone decides.
Limited, distributed risk
Contributions are capped and spread across many ventures. Nobody bears a disproportionate individual risk.
Six roles, clearly separated. Capital comes exclusively from citizens.
Micro-investment
The small, capped amount a person invests in a venture of their own choosing.
Swarm investment
The sum of many micro-investments in the same venture. It replaces no individual decision; it consists of them.
Aggregation
The rule-based summing of micro-investments per venture. Without discretion and without reallocation between ventures.
Citizen investorship
The guiding principle: citizens are independent investors. They decide for themselves; no fund decides for them.
| Actor | Task | Explicitly not |
|---|---|---|
| State (ministry) | Owner of the framework: creates the legal basis, mandates the operator, oversees the purpose. | Not an investment decision-maker, not a capital provider |
| Public operator | Public body commissioned by the state: runs the procedure, manages intake, provides the curated portfolio, acts as interface to founders. | No capital provider in the portfolio, no investment advice, no selection on citizens’ behalf |
| EAC (advisory committee) | Independent, purely professional body: admission review and translation into standardised profiles. | No selection decisions, no financial interests |
| Citizens | The actual decision-makers: choose each venture themselves and invest their own capital as micro-investments, bound by caps. | No compulsion, no unlimited exposure |
| Technical service provider | Platform and payment processing, commissioned through regular procedures. | No decision-making power, no selection |
| Financial supervision (BaFin) | Regulatory oversight, depending on the legal design. | No operational involvement |
None of the public bodies invests in the portfolio. That distinguishes CIVINCO from distribution models in which banks or platforms earn from sales.
From venture to financing in seven steps. Every step is documented and publicly traceable.
- 01
Intake
Start-ups apply. The operator can bring in ventures that fall through existing programmes, such as very early ventures before their first proof.
- 02
Admission
The EAC reviews structure, documents, stage of development and goals against fixed criteria. Admission is not a recommendation.
- 03
Profile
Every admitted venture receives a standardised profile, the venture brief: technology, market, finances and risks in comparable form.
- 04
Portfolio
The portfolio is put together so that abstract, technology-intensive ventures also have a firm place.
- 05
Decision
Citizens choose for themselves, in the curated portfolio, which ventures they invest in, each as a micro-investment below caps set by the state. No one decides for them.
- 06
Aggregation
Per venture, the micro-investments are aggregated into a swarm investment. The operator makes it traceable how many individual decisions become one financing.
- 07
Feedback
Regular reports on the development of the ventures and the portfolio. Experience turns into judgement.
Those who are too early elsewhere get a second chance here. Without the operator having to decide more.
Existing programmes reject many ventures not for lack of quality but because they are too early for the programme in question: proof that the technology works is still missing. With the founders’ consent, the operator can transfer exactly these ventures into the CIVINCO portfolio via a standardised form. Existing application documents are reused.1
This places the democratic core of the model exactly where a venture drops out of the system today: where a programme’s expert review says “not yet”, citizens can decide whether to give the venture a chance anyway.
What the operator does
- Run and supervise the procedure
- Manage intake and accept handovers
- Document the aggregation per venture
- Report regularly
What the operator is spared
- Investment decisions per venture
- A separate review per investment: the EAC reviews once against fixed criteria
- Providing public capital
- Portfolio management and investment advice
- Payment processing, handled by a commissioned service provider
The model is designed so that the operator’s workload hardly grows with the number of ventures: decisions are spread across many citizens, review and profile follow a single standard. The cost model of phase 0 is to establish the actual workload.
Legitimacy, mediation, shared responsibility. Each pillar answers a named problem.
Procedural legitimacy
Answer to the trust deficit
The aggregation of many micro-investments into a swarm investment is fully traceable. Allocation follows fixed rules, without discretion and without informal intermediaries. Participants receive regular reports on the development of the ventures and the portfolio.
This creates procedural trust: the certainty that what was promised happens with one’s own contribution. It does not create trust in the quality of individual ventures, and CIVINCO does not claim that it does. Legitimacy is necessary for broad participation, but not sufficient for good decisions.12
Why a public operator?
- Credible, especially in loss. An early-stage portfolio contains failures. That is exactly when the operator must remain neutral. Whoever earns from fees or commissions has different incentives.
- Reach as a mandate. The value of the model grows with broad and diverse participation. A public operator pursues this as a mandate, not as a marketing cost.
- Fitting the problem. Households’ reluctance is rooted in a lack of trust in institutions. An operator with public, rule-bound legitimacy addresses exactly this deficit.
Platform and payments can be outsourced to supervised service providers. The guarantee of the procedure is a public good.
Information mediation
Answer to complexity
The EAC, staffed with experts in venture capital valuation, financial and risk analysis, technology assessment and industry dynamics, translates the complexity of early ventures into decision-relevant form. It holds no stakes in the companies it reviews and is separated from political influence and private financial interests.
Admission is not a recommendation
The EAC checks whether a venture meets the procedural requirements, not whether it deserves funding. This protects citizens’ freedom of decision and limits the state’s reputational risk.
Legible, not enticing
The standardised profiles are a deliberate countermeasure against the pull of the familiar. They are meant to make an abstract deep-tech venture understandable, not attractive. Their organising principle is comparability, not persuasiveness.
Regular feedback on the portfolio closes the loop: whoever works repeatedly with reviewed information and observable results sharpens their judgement without having to become an analyst.
Shared responsibility
Answer to individual risk
State-set maximum amounts per venture and per calendar year, and a cap on each household’s total annual participation, prevent excessive commitment, even if someone wanted it. They enforce micro-investment. The legislator sets the specific amounts.
Each contribution is spread across several ventures, and each venture gathers the capital of many people. This creates diversification on both sides.
The EAC is the key lever of the model. It reviews and translates, but it does not decide.
The Expert Advisory Committee translates the complexity of early ventures into a form on which lay people can decide on a comparable basis. Its role is professional, not allocative: it does not determine who receives money, but under which information conditions citizens decide.1
Because the strength of this mediation decides whether CIVINCO improves or worsens capital allocation, the EAC is the component on which the model succeeds or fails.
Venture capital valuation
Assesses business model, funding needs and milestones like an early-stage investor.
Financial and risk analysis
Reviews financial information, capital structure and risks and makes them comparable.
Technology assessment
Assesses readiness, feasibility and novelty of the technology, especially in deep tech.
Industry and innovation dynamics
Places market, competition and development paths of the respective industry in context.
Consumer protection and financial literacy
Ensures that profiles and risk warnings are understandable for lay people and not promotional.
additional proposalLaw and financial regulation
Checks the admission requirements and compliance with the procedural rules.
additional proposalAdmission
Reviews structure, financial information, stage of development and goals against published criteria. Admission is not a recommendation.
Profile
Prepares a standardised profile for every venture. The yardstick is comparability, not persuasiveness.
Curation
Assembles the portfolio so that abstract, technology-intensive ventures also have a firm place.
Feedback
Reports on the development of the ventures and the portfolio so that participants can sharpen their judgement.
Independence
- No stakes: Members hold no financial interests in reviewed ventures.1
- No instructions: The EAC is separated from political influence and private financial interests.1
- Disclose conflicts: Anyone with a connection to a venture takes no part in its review.
- Public criteria: Admission criteria and the profile format are published.
- Fixed terms: Members are appointed for a limited term so that the EAC does not ossify.
The first two points and the four fields of expertise with a source reference come from the working paper. The other rules and the two additional fields are design proposals.
CIVINCO does not eliminate risk. It limits and distributes it.
At the individual level, the small size of contributions keeps the burden low. At the portfolio level, it is spread across different ventures. At the system level, early-stage risk is carried jointly by a broad base of participants.
The total loss of a single micro-investment remains possible. The state guarantees no return, but the integrity of the procedure and the limits of exposure. The political worst case, someone losing their savings, is ruled out by design through caps, small amounts and diversification.
Diversification limits individual harm and evens out random misjudgements. It does not correct systematic bias against the new; that requires mediation and curation. That is why pillars B and C complement rather than replace each other.
Broad participation does not improve capital allocation by itself. Whether it does depends on a condition that can be named.
Dispersed, non-professional investors prefer the familiar and the understandable. Radically new ventures fare worse in crowdfunding than incremental improvements.3 In the most direct comparison of crowds and experts, the two largely agree, and where they differ, the crowd tends to fund what experts reject. But it does not rate novelty more highly.4
It follows that the crowd is generous, but along a dimension that need not coincide with technological novelty. Without a countermeasure, CIVINCO would filter the new more strictly than the capital it is meant to complement. The decisive lever is therefore the strength of information mediation.1
Discount on the unfamiliar
Without mediation, citizens fund abstract, technology-intensive ventures less often than an expert benchmark, at equal quality.
Mediation as moderator
Standardised, comparable profiles reduce this discount: the stronger the mediation, the more.
Correction through the portfolio
Diversification and curation mitigate the effects of individual biases at system level.
Conditional superiority
CIVINCO improves allocation relative to the status quo only if P2 and P3 together are strong enough to outweigh P1. Otherwise it worsens it.
Four conditions of success
- Sufficient mediation: The profiles reduce the discount enough that deep tech is not systematically underfunded.
- Curation with integrity: New ventures have a real place in the portfolio and are not screened out in advance.
- Broad participation: Participants are numerous and diverse enough for individual biases to even out.
- Neutral operator: The procedure remains credible even in case of loss.
Naming the sources of failure openly is not a hedge but the core: it shows what must be measured and what must be protected.
Every assumption is testable. A limited pilot is the beginning, not the goal.
| Question | Metric | Approach |
|---|---|---|
| Do citizens underfund novelty? | Novelty profile of funded versus admitted ventures | Comparison of citizens’ decisions with blind expert ratings of the same ventures |
| Does mediation reduce the discount? | Discount on the unfamiliar as a function of the comparability of profiles | Random variation of the profile format between ventures or groups |
| Does the portfolio correct biases? | Novelty profile of the portfolio versus individual decisions | Comparison with a scenario of unmediated individual choice |
| Is CIVINCO better than the status quo? | Survival, follow-on funding and novelty of the funded ventures | Staged pilot with a comparison group from conventional early-stage channels |
| Is participation broad and lasting? | Depth of participation, retention, representativeness | Longitudinal observation of participants |
The most important opportunity for measurement lies in the EAC: because admission and selection are separate, every citizen decision can be compared with a blind expert rating of the same ventures.1
Review
Legal framework, regulatory classification and cost model.
Pilot
Limited by region and field, as a research project with evaluation.
State
Expansion once the conditions of success are demonstrated.
The regulatory classification depends on the design, for instance under the German Capital Investment Act, the European Crowdfunding Regulation or the German Capital Investment Code.6 Clarifying it is the task of phase 0.
The obvious questions. And the short answers.
Isn’t CIVINCO simply INVEST for everyone?
No. INVEST makes an investment cheaper for business angels who already have access to it. CIVINCO creates access in the first place, for households that structurally lack it, and without necessarily subsidising their investment. The state provides no capital in CIVINCO.
Is this a sovereign fund?
No. No public money flows into the portfolio, and no public body selects ventures. The state guarantees the procedure, not the outcome.
Is CIVINCO a fund?
No. In a fund, a management team decides where pooled capital goes. In CIVINCO, each citizen chooses for themselves, in the curated portfolio, which ventures their own micro-investments go to. Per venture, only what individuals have chosen is aggregated: that is what forms the swarm investment, not a decision by the operator.
How does CIVINCO differ from crowdinvesting?
Private platforms finance themselves through fees and intermediation, and investors choose individual projects without a standardised information basis. CIVINCO relies on a public operator without commercial interest, reviewed and comparable profiles, mandatory diversification and fixed caps.
Can citizens lose money?
Yes. A single micro-investment can fail completely. CIVINCO does not eliminate risk; it limits and distributes it so that damage relevant to a household is ruled out by caps, small amounts and diversification. The state guarantees no return.
Who is liable if a venture fails?
Admission by the EAC is not a recommendation, and the operator runs the procedure without advising. Losses are an expected part of an early-stage portfolio and are reported openly, not concealed.
Does it actually work?
That is the right question, and it is open. CIVINCO is an untested model with clearly named conditions of success. That is why an evaluation architecture is part of the design and a limited pilot is where it starts.
- Steiner, T. M. (2026): Collective Risk-Sharing in Innovation Finance: An Institutional Model of Citizen Investorship. SSRN working paper. doi.org
- Luhmann, N. (1968): Vertrauen. Ein Mechanismus der Reduktion sozialer Komplexität. Stuttgart: Enke.
- Chan, C. S. R. & Parhankangas, A. (2017): Crowdfunding Innovative Ideas: How Incremental and Radical Innovativeness Influence Funding Outcomes. Entrepreneurship Theory and Practice, 41(2), 237–263.
- Mollick, E. & Nanda, R. (2016): Wisdom or Madness? Comparing Crowds with Expert Evaluation in Funding the Arts. Management Science, 62(6), 1533–1553.
- European Commission (2025): Savings and Investments Union, strategy of 19 March 2025. finance.ec.europa.eu
- Regulation (EU) 2020/1503 on European crowdfunding service providers; ESMA Q&A 2437. esma.europa.eu
The full derivation is in the working paper.Go to the working paper