A crowdfunding platform has announced plans to pioneer a secondary market, with the aim of unlocking more liquidity for investors.
Crowdcube made the announcement today as it seeks to raise £5m in its latest funding round, enabling the public to invest alongside venture capital backer Balderton Capital.
The Exeter-headquartered company plans to create an environment in which shareholders of private UK companies can sell their stakes, if demand exists.
This, Crowdcube said, means potential returns are not limited to major exit events like trade sales or initial public offerings (IPOs).
“Many early-stage investors are locked into equity investments of this nature,” co-founder Luke Lang told City A.M.
“And you’re reliant on key exit events in the future, which is typically a trade sale or an IPO or something along those lines. We want to pioneer and give people the opportunity to get secondary liquidity, if demand exists.”
He believes this will help improve the “attractiveness” of the crowdfunding market.
“From an investor point of view, unlocking that liquidity is often seen as barrier for people investing in early stage businesses,” he said.