New equity ratings agency becomes ‘investors’ champion’ to ‘generation crowd’
A new equity ratings agency is being launched today that will empower crowdfunding fans to make smarter investments. Crowdrating.co.uk will provide free, easy to understand ratings about issuers so that ‘generation crowd’ (everyday people interested in crowdfunding) can make more informed decisions about where they invest their money.
The brainchild of former CEO of Interactive Investor, Alex Heath, and founder of AngelNews Modwenna Rees-Mogg, this new tool taps into the massive growth of interest in crowdfunding in the UK, which grew last year by a staggering 420 per cent
. Growth is expected to continue this year with industry estimates of more than £200m in funds raised. Crowdrating.co.uk is set apart from other services in this market by its objectivity, the value of the information it uses to calculate a rating, and the fact that it is offered freely – ratings are accessible to all.
Importantly, it is regulated
. This ensures that the highest standards are applied to researching and preparing each rating. Investors can therefore rely on ratings that are both are credible and trustworthy. “As the only regulated crowdfunding ratings agency in the UK we are able to give advice to investors and to issuing companies, and can be very direct in what we say,” explains Modwenna Rees-Mogg.
“We know that the FCA is concerned generally about the research bank for equity in the UK, both for private and institutional investors. The problem is particularly acute in the crowdfunding world, not least because it is such a new market”, explains Alex Heath.
“Starting a ratings agency very early on in the life of the industry means that we can all grow the market in an aligned fashion. We estimate that there are as many as 250,000 early stage investors in the UK with more than 200,000 registered on equity crowdfunding platforms alone, but until now they have largely been reliant on comments on campaigns from a few independent bloggers, social media and the questions asked by other investors on the bulletin boards attached to each campaign.”
“As it stands, investors are reliant on the information provided by the issuing company typically via the crowdfunding platform. There is no independent validation, let alone regulated comment by experienced analysts available to investors. We know that the platforms themselves recognise that properly independent research is necessary for the market to mature successfully”, says Modwenna Rees-Mogg.
“Not only can this platform be utilised by the general public with an interest in crowdfunding, it will also benefit all types of private investors ranging from crowdfunding novices to angel investors, and the VCs that are increasingly active in the crowdfunding arena. “We are already being approached by angels and VC’s who would like to obtain a rating as part of their due diligence on fundraising companies outside the Crowd.”
“We hope that for investors who use Crowdrating.co.uk, we will become the ‘investor’s champion’ helping investors navigate their way around this noisy space to find sound investment opportunities.
”In order to calculate a rating, the company applies a four-step assessment process: rapid semi-automated data compilation, systematic scoring using our checklist driven ratings engine, a thorough review by an experienced, authorised Director with additional input from relevant investors or sector specialists on our Advisory Panel, prior to a final review by our Compliance officer. The results are summarised and presented in a one-page factsheet that is friendly and easy to understand. With a rapid turnaround, the process is highly efficient and effective, enabling investors to make informed decisions.
Notes to editors
- Crowdrating.co.uk is rating all campaigns AT NO CHARGE on Crowdcube, Seedrs and Syndicate Room.
- The ratings will be available to all people who register at www.crowdrating.co.uk. Issuers will be granted a licence by crowdrating.co.uk to point investors to their ratings during a campaign.
- Crowdrating.co.uk is also offering a premium service for issuers, where they can request a “Campaign Healthcheck” ahead of their campaign launch, or participate in a more in-depth rating for other third parties if required.
- For an issuer, the benefit of sharing information and taking part in the rating process is that it can feed in more detail on its team experience, product development, business strategy and financial projections. A “Campaign Healthcheck” will result in a rating that is based on this deeper level of information than a standard rating of a public campaign. A “Campaign Healthcheck” can be booked at any time before a campaign goes live, and will incur a modest fee.
Wheatfromchaff Ltd is an Appointed Representative of Sturgeon Ventures LLP, which is authorised and regulated by the Financial Conduct Authority.
About CrowdRating.co.uk
CrowdRating.co.uk is the trading arm of Wheatfromchaff Limited. It is the ratings agency for equity crowdfunding. Registered users of its website can view at no charge one-page ratings on live campaigns listed on leading crowdfunding platforms. CrowdRating.co.uk is currently rating campaigns on Crowdcube, Seedrs and Syndicate Room. The firm is an appointed representative of Sturgeon Ventures LLP, which is authorised and regulated by the Financial Services Authority.
The ratings process incorporates the use of a data-driven ratings engine, using information sourced from the fundraising campaign, from information provided upon request by the company and from reliable third-party sources. Each rating also includes explanatory value-added comments and a conclusion.
Wheatfromchaff Limited is backed by a number of private investors. www.CrowdRating.co.uk
Alex Heath
Trained as a Credit Analyst at Citibank prior to completing an MBA at Harvard Business School in 1993. He helped pioneer online financial services as CEO of interactive investor (iii.co.uk), prior to its £250m IPO in 2000. Alex is currently non-executive Chairman of Artfinder, the UK’s leading online marketplace for affordable art. He is an active angel investor and director of early stage companies, with his most recent exit the £100m sale of OB10 electronic invoicing network to Tungsten PLC in 2014.
Modwenna Rees-Mogg
Trained in Corporate Finance at Kleinwort Benson prior to setting up Angel News in 2003, which is now the leading commentator on angel investment in the UK and runs conferences such as the Great British Private Investors Summit. She is a Non Executive Director of Albion Technology and General VCT PLC, which is listed on the London Stock Exchange, as well as of Asset Match, the online marketplace to buy and sell shares in UK private companies. Her most recent publication is ‘Crowdfunding: How to raise money and make money in the crowd’.
