Executive Association Solent Intro to Crowd Funding 14 Feb 2014
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An overview of UK Crowdfunding 1 Alan Scrase 21 st March 2013
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A short after dinner Introduction to the three main types of Crowd Funding in the UK given by Alan Scrase Incubation Centre Manager, SETsquared at University of Southampton
Transcript of Executive Association Solent Intro to Crowd Funding 14 Feb 2014
An overview of UK Crowdfunding
1
Alan Scrase 21st March 2013
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
• UK has lots of great ideas
• Need to cultivate ideas into the next Google/Twitter/GroupOn
• Often stifled by access to
UK has a wealth of entrepreneurial
talent
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%
Money
• 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?
The way it is…
Crowdfunding
• Crowdfunding is an 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
Crowdfunding Types
Kickstarter Project Crowdfunding
Kickstarter Project Crowdfunding
Kickstarter Project Crowdfunding
FundingCircle Loan Crowdfunding
FundingCircle Loan Crowdfunding
FundingCircle Loan Crowdfunding
http://www.crowdcube.com/pg/how-it-works-4
The stages of equity crowdfunding
Crowdcube Equity Crowdfunding
Crowdcube Equity Crowdfunding
Crowdcube Equity Crowdfunding
https://www.fundingcircle.com/how-it-works#how-it-works-video
Equity crowdfunding benefits
Success so far…
£18 million funded so far…
£187,000 Average amount raised
>59.7k members
Deals successfully funded
95 £1.9 million
biggest deal
Crowdcube to date
£2,400 av. investment FCA Authorised
Some challenges
• Regulation
• Process challenges
• Post-investment
• Getting the best participants
• Potential returns
Regulation
• Important to ensure 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
Post-Investment
• Managing input from 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
Donation crowdfunding
www.banktothefuture.com
www.buzzbnk.com
www.crowdbnk.com
www.peoplefund.it
www.gambitious.com
Debt crowdfunding
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
UK Crowdfunders
Alan Scrase
SETsquared at the University of Southampton
Incubation Centre Manager
07825 761 652
