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Equity Crowdfunding: Next Big Thing
The document discusses new financing models for startups and entrepreneurs, specifically crowdfunding. It notes that while there is abundant entrepreneurial talent, finding startup capital from traditional sources like venture capital can be difficult. Crowdfunding is presented as an alternative that allows entrepreneurs to appeal to many small individual investors for funding. The document then focuses on Crowdcube, a crowdfunding platform in the UK that connects entrepreneurs with smaller investors and has successfully funded over £9 million for businesses through deals with over 36,000 members.
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Equity Crowdfunding: Next Big Thing
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- 2. • World economyis in turmoil • It has never been easier or cheaper to start a business • Internet, social media, SaaS, crowdsourcing • We have great entrepreneurs with amazing ideas • BUT, It has never been more difficult for entrepreneurs to find startup and early stage capital The Problem Wealth of entrepreneurial talent but no money
- 3. • Venture capitaldifficult to find for smaller requirements • Debt finance hard to come by • Business angels – limited investments • Typically a syndicate each investing $10k - $100k • What if there was a way to have say 5000 angels each investing $10? • What if anyone could become a business angel? The Status Quo The Status Quo
- 4. • As entrepreneurswe can’t rely on institutions to help us fund our businesses • Disrupt and disintermediate – find new models • It makes sense to rely on each other – People Power • The power of the crowd New finance models New finance models
- 5. Crowdfunding 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 donations • Social Media
- 6. Crowdcube and Crowdfunding •Crowdcube provides a web-based central hub for entrepreneurs to meet micro-investors. It uses the power of Crowdfunding to provide a unique service to two types of people: • for entrepreneurs to source funding more accessibly than conventional routes • for smaller investors to have the opportunity to invest in exciting high- potential businesses What is Crowdcube? “$100 invested in Microsoft at their IPO would now be worth approximately $35k.”
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- 11. Success so far… £9millionfunded so far… £250,000 largest single investment >36,000 members Deals successfully funded >50 £1.5 million biggest deal Business model £2,547 av. investment FCA Authorised
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