The UK’s “alternative finance” market has doubled in the last 12 months and hundreds of British entrepreneurs have embraced crowdfunding to launch and grow their businesses.
While the US has only just got round to legalising equity crowdfunding, the UK is leading the world. And from next month, hundreds of thousands of investors are expected to jump on the crowdfunding and peer-to-peer bandwagon when the returns from qualifying investments become eligible for tax-free ISA status.
As some one who originally raised £1.4m in funding from investors such as Seedcamp for my global film streaming platform We Are Colony, many people have asked me why I turned to crowdfunding on Seedrs for my latest round.
The largest equity crowdfunding platforms facilitated funding of more than £140m last year alone. But it’s not just about the money. The answer lies in the value of the crowd.
We have always prioritised value-add investors, with our current shareholders bringing deep expertise of scaling global tech businesses, hailing from the film industry, or bringing key marketing, data or customer loyalty expertise. And we see the crowd as nothing less: this fundraising model enables businesses like mine to harness an active fan-base and engage them as investors.
It gives fans and users a chance to directly become part of the company's journey, and have a vested interest in its success - giving them greater incentive to promote the company to their network and further our user base. So far, our diverse crowd of investors includes users, friends, family, employees, experienced founders with several exits under their belts, and a certain tennis ace.
These passionate crowd-equity backers are a powerful addition to our investor profile. Sector experts deepen the reserves of talent, experience and insight, giving myself and my senior team access to money-can’t-buy advice and expertise. And members-turned- investors present a passionate target audience for testing our products as we grow, and will become powerful ambassadors for our brand.
With a highly engaged membership from over 110 countries, we love the idea that some of our users are becoming shareholders, or that an as yet unknown everyday investor may become critical to our growth journey. I believe passionately that the foundation of any business is its people. I am proud to be leading a world-class team building a globally ambitious business. Beyond the financial support, we are excited by the potential of our crowd to help propel us to this next phase of growth.