One of the important innovations in terms of the development of the innovation and entrepreneurship ecosystem in Azerbaijan is the adoption of the Law of the Republic of Azerbaijan "On Crowdfunding". The Law envisions the creation of opportunities for access to alternative financing channels for startups, micro, small, and medium entrepreneurship entities, while simultaneously predicting the protection of the rights of persons participating in the investment process. Along with this, the document determines the legal, organizational, and economic bases of equity and debt-based crowdfunding.

Isa Gasimov, head of the "Enterprise Azerbaijan" portal of the Center for Analysis of Economic Reforms and Communication, stated that this innovation can be evaluated not only as the emergence of a new financial instrument, but also as a new stage in the direction of expanding access to capital in the Azerbaijani innovation ecosystem. In the development of startups, access to financial resources carries as important a significance as the formulation of the idea, the preparation of the product, and its bringing to the market. Especially for innovative businesses that are at an early stage, traditional financing sources are not always accessible. From this point of view, crowdfunding can create the opportunity for startups to mobilize the relatively small-volume funds of numerous investors around one project. The importance of crowdfunding is not limited only to raising finance. With the organization of successful campaigns, it can also be significant in terms of testing market interest for the startup, forming a community of potential customers and supporters, establishing initial contacts with investors, and preparing the project for future investment stages.

The creation of this new mechanism directly aligns also with the goal and mission of the "Enterprise Azerbaijan" portal. The main goal of the portal is to raise the investment attractiveness of the country and increase the opportunities to use alternative financing sources for the development of the economy. Its mission serves the creation of a favorable platform for the presentation of local investment projects to foreign and local investors and their financing. From this point of view, one of the perspectives for "Enterprise Azerbaijan" in the coming period can be the preparation of startups for the use of crowdfunding mechanisms. Here the goal is not only bringing projects out to financing platforms, but bringing them into a more prepared state in terms of investment.

In this direction, the formation of a "Crowdfunding Readiness" approach in the future looks prospective. This is bringing startups into a state ready to attract finance through crowdfunding, that is, the systematic improvement of the business model, financial indicators, investment offer, and investor presentation. Within the framework of such a mechanism, startups' business models, market potential, financial indicators, investment offer, and presentation capabilities can be improved, and support can be shown for their coming out in a more prepared manner before the investor.

Programs implemented by "Enterprise Azerbaijan" such as "Startup School" can be naturally linked with the crowdfunding mechanism. 233 startups attracted from 15 different countries to the currently continuing "Startup School 4: Five continents – 500 Startups" program (including 164 projects from Azerbaijan, the rest from other countries) are directed at the development of startups' innovation and entrepreneurship skills, product development, investment attraction, and increasing access to international markets. Thus, opportunities increase in Azerbaijan for forming a more sequential financing and development chain such as idea $\rightarrow$ startup $\rightarrow$ development and readiness $\rightarrow$ crowdfunding $\rightarrow$ angel/VC investment $\rightarrow$ access to the international market.

Crowdfunding can contribute also to the development of investment culture in Azerbaijan. This mechanism creates opportunity for the participation of a broader investor audience in putting investments into innovative projects. As a result, new sources form for the financing of innovative projects. In addition to this, when a suitable legal and institutional environment is created, Azerbaijanis living abroad, international partners, and foreign investors can also more easily invest in local innovative projects.

Isa Gasimov noted that the adoption of the mentioned law in itself does not yet ensure the full formation of the crowdfunding market. For this, the formation of both free market conditions, a pipeline of high-quality and investment-ready projects, a reliable and informed (smart) investor base, as well as culture is important. Educating investors, raising the investment readiness of startups, and strengthening cooperation among various participants of the ecosystem can be considered among the main conditions of this stage. Especially in this process, keeping the improvement of the law in accordance with market demands and needs as relevant is also considered one of the important factors.

Crowdfunding is not only a new financing mechanism for Azerbaijan's innovation ecosystem. This is a new bridge for converting knowledge and intangible resources as a result of intellectual activity into tangible resources, in other words, converting ideas into capital, and capital into the development of innovative businesses. The main task ahead is preparing high-quality startups capable of passing across that bridge, attracting investors to the process, and ensuring the efficient integration of crowdfunding with existing innovation and investment infrastructure.