The Latest Crowdfunding News
Hi guys and welcome to our first crowdfunding news edition for August. As usual we will be taking a look at the latest goings-on in the world of crowdfunding and today we start our round-up by focusing on London’s most exciting crowdfunding campaigns of the summer to looking at why equity crowdfunding matters to small business. Missed our last crowdfunding round-up? If so, catch up here.
London’s Most Exciting Crowdfunding Campaigns This Summer
Turning to the crowd to fund the latest expansion plans or business venture as we know is becoming an increasingly popular option for businesses of all shapes and sizes, and last year crowdfunding in the UK reached £245m.
So what campaigns have excited those in the capital? Starting with Revolut, the London fintech launched a crowdfunding campaign last month in order to top up its oversubscribed £7m Series A funding round.
The fintech startup, which allows users to spend cash abroad on a fee-free Mastercard in conjunction with its app, experienced overwhelming demand with a record £12m pledged by interested parties within 10 hours of its launch according to Business site Bdaily.
We briefly mentioned about Crowdcube being a main player when it came to alternative investment, they too got in on the act and aimed at reaching a 5m raise which they exceeded. Crowdcube attracted £6.2 million of investment on its own platform, 124% more than it originally targeted.
Another exciting campaign that we have stumbled across is from Hire Space.
The London startup that has had big client names such as Facebook and Red Bull, closed its 500k crowdfunding campaign back in June. Their funding came from over 200 venues, event professionals and private investors respectively.
According to Bdaily : “Co-founder Edward Poland has some ambitious plans for the firm following the investment drive, with plans to ‘revolutionise the events industry’ both in the UK and abroad as Hire Space entrenches its position at the forefront of the market.”
We will definitely be watching this space (no pun intended!) for more future crowdfunding campaigns in the capital, here are two more from the Bdaily article that might be of interest, view here.
Crowdfunding App Tilt Adds P2P features
We would normally add a P2P based story in our P2P news round-ups (if you missed our last one a fortnight ago you can catch up here), however, we previously mentioned Tilt in a December post and thought we would keep you updated about the app.
For those of you who have never heard of Tilt, in a nutshell the app is for groups of friends to pool money together for a group goals such as fundraising or funding a trip for example.
Tilt is now focusing on P2P features, the platform’s owners have opted to launch a formal P2P transfer function through the addition of “pay” and “request” buttons according to Business Insider.
Their 18-24 user base falls directly into the audience most attuned to digital P2P payments. Mainly because of the social nature of the app itself and many users know each other. This could definitely help the application thrive, because P2P applications benefit from engaged users bringing new users into the mix, who continue to refer additional customers and help expand Tilt’s network.
Image source : Tilt Twitter
Brexit Blamed for Fall in Crowdfunding Deals
According to research by Beauhurst, they found out that crowdfunding platforms raised £87.4m in the first half of 2016, a drop of just over 4 per cent from the £91.3m raised in the previous six months. (FT.com, August, 2016)
In addition, their findings concluded that the uncertainty around the vote to leave the EU and the nature of the UK’s relationship with Europe has contributed to having deals being delayed or even abandoned.
UK Crowdfunding Association (UKCFA) spokesman Bruce Davis mentioned in the FT that the dip in deals is just a pause. In addition he stresses that the market has slowed down due to recent events, however, the UK is still taking a large share of the market.
Mr. Davis said that The UKCFA are confident that the number of deals will grow again, he stated in the FT : “The key to that will be strong signals from the government on strategy to see where it wants to see growth and investment.”
Dave Goes to Rio Thanks to Crowdfunding
This one is for all you Olympics fans out that there! Dave Leach, a coach at Lewes AC has had a string of successful athletes at the Sussex based athletics club, including Rob Mullett who was selected to Represent Team GB at the Rio Olympics for the Men’s 3000m steeplechase.
Dave’s dream was to travel to Rio with Rob (who he has coached Rob since he was 12 years old), thanks to crowdfunding, Dave’s dream came true!
Club members, friends and colleagues used crowdfunding to raise the money to send Dave to the Brazilian host city; sponsors have kitted Dave and Rob from head to toe in Olympic fashion to be ready for all weather conditions there. In fact the funding was so successful, the target was reached and beaten (the initial target was 3k, however, 5k was raised for Dave).
For a coach who hasn’t been paid for 25 years and has never been on a plane before, this is another example of how crowdfunding has saved the day once again!
Image source : The Telegraph
Why Equity Crowdfunding Matters to Small Business – A View from The U.S.
For those of you who follow our various blog round-ups know that we look at quite a few viewpoints and stories from all over the world, this time we turn our attention to across the pond.
A series of recent laws and regulations have opened the door to three new vehicles for raising investment dollars for small businesses through equity crowdfunding. These new forms of investment crowdfunding may well transform the nature of small business capital raising in the United States, by enabling individual investors to take equity stakes in new companies as Entrepreneur and Yahoo Finance both explain.
Last September, Title IV on the JOBS Act went into effect modifying regulation A of the Securities Act. In layman’s terms this piece of legislation has a very important meaning – growing companies in The States can now go public in a small offering and raise up to $50,000,000 dollars through a streamlined, low-cost alternative to a full public offering.
Companies can now test the water so to speak, meaning that small companies can let the public know that they are thinking of raising investment dollars. In America this form of announcement has been illegal since the 30’s, however, due to transparency levels and openness that these array of online platforms provide, it has now been made legal.
As a result of the legislation, many small business in America have learned to leverage small early stage investments via crowdfunding to increase their bargaining power and get more money from venture capitalists later as Richard Swart mentions in his article and these new rules give multiple financing options available to small businesses across the country.
What Are Your Thoughts?
Which of our chosen crowdfunding stories has interested you the most? We would love to hear from you, feel free to leave us a comment on our Facebook and Google Plus pages. If you prefer to tweet us, tweet @TheHouseCrowd.
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