In July, when I sourced the first successful “crowdfund” raising on Crowdcube, I was hesitant to cover it.
Basically, I’ve always been a traditionalist and at that time I didn’t want to challenge the classic scheme: a recipient, a round leader, and other investors as participants. In that case, I had an entrepreneur, and a lot of (or a crowd of) indivuduals, each investing a small amount of money, instead.
Then, I started thinking about the main concept behind FinSMEs. Overall, it was the “NewsBlog about financing for Small and Medium sized Enterprises”. Still uncertain, I decided to cover it: Bubble & Balm, a Leamington Spa, UK-based Fairtrade bodycare company, had raised £75k in growth capital from twenty-two investors in return for a 15% stake in the business (read here the news).
Then August, September but no news. I sometimes visited Crowdcube’s web site to see if another company had succeeded to reach its final funding target.
In October, it was a London-based business, Personal Development Bureau, that helped police, fire service and other forces personnel cope with unemployment, to raise £25K (read here). In that case, sixty-eight investors participated (injecting between £10 and £3,300) in the funding in return for a 15% stake in the company.
Seen the large amount of investors involved, I started having a serious look at the platform to try to understand how it worked. I thought: “Ok, it is interesting, I also appreciate its equity structure. It can be useful, especially for entrepreneurs who want to raise very small sums of money!”.
But I was making another mistake.
In October, Kammerling’s raised £ 180k, followed in November by Civilised People, which raised £ 100k (read here), and by The Rushmore Group, which raised £1m (read here). In the last few days, BigBarn raised £12k (read here), Personal Development Bureau completed its £25k second round (read here), and Edge Forecast Software (read here).
As you can notice through the links above, FinSMEs covered all of these rounds!
“Ok”, I thought. “Have a look at the platform and how it works”.
Crowdcube is an equity-based crowdfunding service that allows entrepreneurs to seek and raise money for their business venture by offering real equity in exchange for investment from a community of investors.
Co-founded in 2010 by CEO Darren Westlake and Marketing Director Luke Lang, the platform provides entrepreneurs with a dedicated online space where they can present (‘pitch’) their business, explain to prospective investors the reasons behind the fundraising and how they intend to use the capital. On their page, they can also upload a video pitch, images and supporting documents.
Once a pitch reaches its funding target, the company receives the capital and – in return – each of the investors get their own share of equity in the business.
People can invest as little as £10 into a business and there are no requirements to self-certify that they are high net worth individuals or sophisticated investors.
Crowdcube raised money (£300k) on its own platform, as well (read here).
Ermanno Cece/FinSMEs
21/12/2011