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July 2016 

Crowdfunding is fast losing its label as an ‘alternative finance solution’. Whilst access to finance is an obvious benefit of turning to crowdfunding, startups and SME owners are also realising that successful crowdfunding can be a clever move for other reasons. Positive PR, accelerated growth and multiple brand ambassadors who can become an integral part of a companies’ future are just a few additional benefits.

The recently funded Friction Free Shaving, a Women’s Razor Subscription service boasts gaining industry advisors, access to great talent and boosts in sales off the back of their very successful crowdfunding raise on Seedrs in March. Their latest quarterly update reports exceeding member sign ups by over 100% since the raise.

With careful planning, thought and consideration, mixing key professional investors with the crowd can be a smart move for entrepreneurs and, as startups wise up to the benefits of Crowdfunding, investors too are more and more ‘joining the crowd’. 

As companies that have successfully funded mature and we begin to see some success stories from the industry (and failures), so too have the platforms matured, providing deeper insight into investment portfolios, increased responsibility for company updates, and improvements to due diligence processes. Competition is increasing, quality of deal flow is improving. It’s exciting to see how the industry continues to evolve.

Minimum investment on leading equity crowdfunding platforms such as Seedrs and Crowdcube is often well under £50. Whilst you may think that investing such a small amount in a startup is a pointless endeavour, it is worth pointing out that an investment of any size via crowdfunding provides the investor (sophisticated or otherwise) with access to company updates and, on most platforms, access to future funding rounds, particularly if you invest in A class shares. If I could call myself a professional investor, which I hope to one day, I would most certainly invest small amounts of my capital across many promising young startups on popular crowdfunding platforms, just for the privilege of following their journeys and being there from the very start.

The UK boasts some of the world’s largest and most successful crowdfunding platforms such as Crowdcube, Seedrs and Syndicate Room who each have different and unique models for investment. However, despite these differences, each have a shared mission – to unite investors with entrepreneurs and to democratise access to investment in exciting growth businesses.

Crowdcube have over 290,000 members (including professional investors) who have now been behind 419 successful fundraises including FinTech startups GoHenry and Mondo this year. Syndicate room’s unique investor led model has recently joined with Gust, the largest global network of early-stage investors and founders. Seedrs boasts access to deal flow from 24 countries with more than 340 businesses campaigning for investment in 2015 alone.

 If you are yet to become part of the crowd, I would recommend any of the above three platforms as a good place to begin.