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Executive Association Solent Intro to Crowd Funding 14 Feb 2014
This document provides an overview of UK crowdfunding, highlighting its importance for startups facing challenges in securing traditional financing. It discusses various crowdfunding models, successful platforms like Kickstarter and Funding Circle, and emphasizes the potential for widespread investment from ordinary people. Additionally, it addresses regulatory challenges and the need for investor protection and transparency in the crowdfunding ecosystem.
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Executive Association Solent Intro to Crowd Funding 14 Feb 2014
- 1. An overview ofUK Crowdfunding Alan Scrase 21st March 2013 1
- 2. Context • SETsquared Partnership- the Enterprise collaboration of the Universities of Bath, Bristol, Exeter, Southampton and Surrey • Collectively supports the growth and success of new business opportunities through spin-outs (20%), spin-ins (80%), licensing, acceleration and incubation • Running 10 years • Raised over £1bn investment • 1,000 companies created with 90% survival rate
- 3. UK has awealth of entrepreneurial talent • UK has lots of great ideas • Need to cultivate ideas into the next Google/Twitter/GroupOn • Often stifled by access to Money Google says searches for "business plan UK" have increased by 60% over the past year and searches for "small business loan" are up by 34%
- 4. The way itis… • Grants complicated and time consuming • Debt finance hard to come by • What if a large number of people lent a smaller amount? • Venture capital difficult to find for smaller requirements • Business angels – limited investments • Typically a syndicate each investing £10k - £100k • Is there a way to have 5000 angels each investing £10? • What if anyone could become involved?
- 5. Crowdfunding • Crowdfunding isan approach to raising the capital required for a new project or enterprise by appealing to large numbers of ordinary people for small amounts • Possible via the web and driven through Social Media • Crowdfunding examples • Funding Circle.com – 68k UK based lenders, > £220m lent, <1.4% bad debt • Kickstarter.com – >132,000 launched projects, > $977m pledged to-date, 44% success rate
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- 13. The stages ofequity crowdfunding
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- 18. Crowdcube to date Successso far… Deals successfully funded £18 million £2,400 av. investment £187,000 >59.7k Average amount raised funded so far… 95 members FCA Authorised £1.9 million biggest deal
- 19. Some challenges • Regulation •Process challenges • Post-investment • Getting the best participants • Potential returns
- 20. Regulation • Important toensure investors are protected • JOBs Act is one option but not necessarily the best one • EU looking at options • UK FCA have started approving already • Need for more transparency and consistency across Europe
- 21. Post-Investment • Managing inputfrom many investors • Incentivising investors with small stakes • Protecting investors post-investment • Voting rights • Exploring liquidity for investors • Ensuring businesses remain attractive to follow-on funders
- 22. UK Crowdfunders Donation crowdfunding www.banktothefuture.com www.buzzbnk.com www.crowdbnk.com www.peoplefund.it www.gambitious.com Debtcrowdfunding www.abundancegeneration.com www.banktothefuture.com www.buzzbnk.com www.trillionfund.com www.fundingcircle.com Equity crowdfunding www.banktothefuture.com www.crowdbnk.com www.crowdcube.com www.gambitious.com www.microgenius.org.uk www.crowdmission.com www.seedrs.com
- 23. Alan Scrase SETsquared atthe University of Southampton Incubation Centre Manager [email protected] 07825 761 652