A new crowdfunding website that makes it possible for the general public to buy shares in start-up and growing businesses was launched today. Crowdcube is the first crowdfunding website in the world to offer people equity in exchange for their investment. It aims to make access to finance easier for entrepreneurs of newly formed and growing small businesses. Instead of competing for limited business angel or venture capital funding, start-ups can use Crowdcube as a platform to connect with a nation of ‘armchair dragons’ to find investment.
Entrepreneurs can showcase their business and investment potential to thousands of micro-investors, ordinary people rather than high net worth individuals, by uploading a ‘dragons’ den’ style video pitch, images and supporting documents. Spreading the word about a pitch is made easy via Facebook, LinkedIn and Twitter sharing links on their dedicated Crowdcube webpage. People can support an idea, person or business by investing small amounts of money – from as little as £10 – in exchanges for shares in the business.
Darren Westlake, co-founder and Managing Director of Crowdcube says, “The task of securing business investment is notoriously difficult. Banks adopt a no-risk approach to lending while business angels and VC funding are difficult to access. We are democratising an age-old model for raising business finance by empowering the ‘crowd’ to pool small amounts of investment money and give Britain’s start-ups a much needed boost. Crowdcube is the next generation of business investment.”
Research from Kantar Media’s GB TGI survey shows that 1 in 4 British people would like to set up their own business one day. Further, the Kantar Media Business Culture Index (BCI) survey highlights that 38 percent of small businesses set themselves aggressive growth targets. Crowdcube believes that it could make the difference to the success of the 5 million small businesses in Britain seeking to start or grow. Westlake continues, “Because Crowdcube gives people the chance to become ‘Armchair Dragons’ by investing modest sums of money in exciting business opportunities, small businesses have a better chance of securing funding for their businesses. We can crowdfund Britain’s economic recovery.”
Businesses registered to find finance through Crowdcube at launch include:
- Equus Solutions, a start-up that has received lottery funding to trial its business model and now requires £120,000 in order to build its equine-assisted psychotherapy business, which helps people with addictions, or behavioural issues and illnesses such as anxiety, autism, eating disorders and depression.
- Storyboard Jeans, a start up denim company that designs, makes and markets premium denim and non-denim jeans for the ordinary woman aims to raise £30,000 to start-up its business.
- U-Recommend.co.uk, is a text marketing business for service sector SMEs. It wants to raise £30,000 to enable it to achieve its aim of leveraging the mobile marketing phenomenon for the benefit of small and medium sized businesses.
- Borders Counselling and Coaching is seeking £30,000 of funding to start its online counselling, life coaching and business mentoring service.
- Aberdeen based White Van Ads wants to speed up growth of its outdoor advertising business that pays white van owners around the UK and parts of the USA to carry vinyl wrap advertising for other businesses. It wants to raise £50,000.
Dave Robinson, Director of White Van Ads Ltd, says, “We self funded the initial set up of White Van Ads, but to speed up growth we need to find more money. After looking at all of the finance options available to a small business, Crowdcube stuck out like a shining beacon in a sea of mediocrity. Being part of a ‘new way of doing things’ is a major attraction.”
There is no cost for entrepreneurs to sign up to Crowdcube. Crowdcube receives a five percent success fee. If the target funds are not met, investors get their money back and no success fee is charged to the entrepreneur. Start-up ventures can register their business idea or company at www.crowdcube.com.